Calif. Senate Opens Power Probe

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Associated Press

In a move that could force out-of-state power suppliers to open their books and justify their profits, the state Senate is launching an investigation into whether they illegally manipulated California’s electricity market.

Senate leader John Burton announced the formation of the select special committee Wednesday. Burton said the committee will ask executives of energy wholesalers to testify, and subpoena them if necessary.

”Clearly, early evidence suggests that there has been market manipulation by the power generators, which led to rolling blackouts and then higher electric prices,” he said.

If the panel finds evidence of illegal activity, Burton said, the state attorney general should go to court to seek refunds.

Burton said he suspects wholesalers shut down power plants to create a shortage and drive up prices.

The power wholesalers have denied any wrongdoing and blamed the high prices on the poor planning of California lawmakers who voted to deregulate the state’s electricity market in 1996.

Tom Williams, spokesman for Duke Energy, expressed annoyance at the news of a Senate probe.

”It is wearing thin,” he said. ”There has been investigation, upon investigation, upon investigation, upon investigation, and there have never been findings of wrongdoing.”

Energy watchdogs hope that by subpoenaing records and compelling testimony, the committee will uncover evidence of price-gouging.

”If they are the crooks they appear to be, we need to get them to discuss their behavior in the public’s eye,” said Doug Heller, consumer advocate for the Foundation for Taxpayer and Consumer Rights.

Last week, federal regulators said that wholesalers overcharged California utilities at least $69 million in January. Separately, the keepers of California’s power grid said the suppliers imposed $555 million in unreasonable charges in December and January.

Much of the outrage has focused on a few out-of-state energy companies whose profits doubled and tripled last year as California’s wholesale electricity prices soared. They include: Houston-based Dynegy, Houston-based Reliant Energy, Charlotte, N.C.-based Duke, Atlanta-based Mirant, and Tulsa, Okla.-based Williams Energy.

Attorneys general in California, Washington and Oregon are pursuing similar investigations.

Consumer Watchdog
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