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Date: Tue, 24 Apr 2001 10:19:24 -0500 From: "Tracey Bradley" <tbradley@bracepatt.com< To: "Justin Long" <jlong@bracepatt.com<, "Paul Fox" <pfox@bracepatt.com< Cc: "Aryeh Fishman" <afishman@bracepatt.com<, "Andrea Settanni" <asettanni@bracepatt.com<, "Charles Shoneman" <cshoneman@bracepatt.com<, "Dan Watkiss" <dwatkiss@bracepatt.com<, "Kimberly Curry" <kcurry@bracepatt.com<, "Ronald Carroll" <rcarroll@bracepatt.com<, "Randall Rich" <rrich@bracepatt.com< Subject: Reuters - Calif. bill would penalize energy price gougers Mime-Version: 1.0 Content-Type: text/plain; charset=ISO-8859-1 Content-Disposition: inline FYI Calif. bill would penalize energy price gougers ------------------------------------------------------------------------------ -- SAN FRANCISCO, April 23 (Reuters) - California legislators could be handed a bill this week that, if approved, would make it a criminal offense for anyone caught price gouging in the state's volatile energy market, a legislative source told Reuters. "We are right now waiting on final language for a bill that would propose putting penalties on energy companies which have engaged in price gouging," the source said. He said the bill, likely to be introduced in the Assembly Wednesday, would seek stiff financial penalties for violators. It was not yet clear how long it would take for the bill to make its way to the Assembly floor for debate. The bill follows a call earlier this month by Lt. Gov. Cruz Bustamante for laws making it a felony for energy companies "to charge unreasonable and unjust energy rates". A spokesman for Bustamante confirmed the proposed legislation would address California's soaring natural gas prices, more than quadruple what they were a year ago and now the highest in the nation, but was unsure when the bill would go to the Assembly. High natural gas prices have played a key role in pushing up power prices because gas-fired turbines are the single biggest source of electricity in California, providing more than a third of the power used by the state's 34 million residents. California's power crisis stems from a 1996 deregulation plan that allowed wholesale prices to soar but capped retail rates. The result has been a string of rolling blackouts in January and March, rising rates, a spotty power supply and the bankruptcy of the state's biggest utility. But a number of state officials believe price gouging and illegal activity have been behind the sharp rise in power and gas prices in California. The California Independent System Operator, which operates most of the state power grid, filed two reports with federal regulators in late March alleging more than $6 billion in overcharges by wholesale power suppliers over a 10-month period. The Federal Energy Regulatory Commission, which regulates interstate electricity and gas sales and transmission, has also accused 13 western power generators of overcharging California utilities $124 million for wholesale power in January and February. FERC ordered $69 million in refunds on power bought in January and $55 million for purchases in February. Energy companies like Duke Energy , EL Paso Energy Corp. and Dynegy have repeatedly denied any wrongdoing in California's chaotic wholesale power market, arguing the prices they charge reflect the underlying cost of power generation, tight supplies throughout the region, and the high financial risk of doing business in the state. Last week, California Attorney General Bill Lockyer asked San Francisco Superior Court to force power generators Reliant Energy Inc. and Mirant Corp. to turn over documents subpoenaed in his probe of possible price gouging in the state after the two firms failed to produce the documents. Lockyer, who initiated this investigation last August, is also conducting a similar investigation into whether anti-competitive practices are behind the rise in gas prices. It is unknown when that investigation will be completed. ------------------------------------------------------------------------------ -- Copyright , 2001 Reuters Limited.
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