Reliant, 4 officers indicted in Calif. energy crisis

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SAN FRANCISCO — A federal grand jury Thursday indicted a Reliant Resources subsidiary and four officers, including two who have left the firm, on charges of conspiring to defraud California during its electricity crisis in 2000 and 2001.

The charges are the first brought against a company implicated in the California energy crisis, which resulted in soaring prices and rolling blackouts. The indictment says state electricity consumers overpaid by as much as $ 32 million due to manipulations by Reliant Energy Services and former vice president Jackie Thomas, 49; former vice president Reggie Howard, 37; trader Lisa Flowers, 37; and manager Kevin Frankeny, 42.

The indictment says the defendants shut power plants to create the false appearance of an electricity shortage and drive up prices.

Reliant general counsel Mike Jines said the Houston company will contest the charges. “We believe the actions that are the subject of the indictment were not in violation of laws, tariffs or regulations in effect at the time,” he said.

Consumer advocate Douglas Heller of the Foundation for Taxpayer & Consumer Rights hailed the indictment, saying, “Reliant was among a group of large energy companies that robbed California blind during deregulation.”

Reliant, Enron and other firms moved aggressively to take advantage of weaknesses in the state’s deregulated power market.

Two Enron executives previously were indicted on similar charges, resulting in a guilty plea by former Enron trader Jeffrey Richter in January 2003 and a trial scheduled for later this year for former Enron power executive John Forney. Also in January 2003, Reliant agreed to pay the state $13.8 million for withholding power supplies.

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