Lockyer announdes that Mirant has settled for $750 million; settlements now total $3.4 billion.
nytimes.com
Electricity Producer Settles With California Utilities
By JAD MOUAWAD
Published: January 15, 2005
The Mirant Corporation, an Atlanta-based power producer, agreed yesterday to pay as much as $750 million to settle claims by California's attorney general that it manipulated prices during the state's energy crisis in 2000 and 2001.
California has accused Mirant and other electricity producers of gouging consumers by inflating fees and lying about congestion on their power lines. The crisis led to skyrocketing electricity prices and rolling blackouts.
The proposed settlement was announced by Bill Lockyer, California's attorney general, whose office has recovered $3.4 billion from power producers so far.
The settlement allows Mirant, which is in bankruptcy protection, to file for a reorganization plan with the Federaal Bankruptcy Court for the Northern District of Texas later this month. The company hopes to emerge from Chapter 11 by the middle of the year, said Curtis A. Morgan, Mirant's executive vice president and chief operating officer.
"The settlement puts clarity around sizable claims" faced by Mirant, Mr. Morgan said. The company sought protection from creditors in July 2003 after wholesale power prices plummeted.
The agreement with California was approved Thursday by the California Public Utilities Commission. It must still be approved by the Federal Energy Regulatory Commission, two courts overseeing Mirant's bankruptcy proceedings and the Pacific Gas and Electric Company, one of the utilities involved in the settlement, Mirant said in a statement.
"This is quite low considering the damages done," said Robert McCullough, a consultant on electricity issues in Portland, Ore., and an expert witness on behalf of utilities in Washington and Oregon that were overcharged by Mirant.
Under the proposed settlement, Mirant would pay $320 million to utilities it overcharged. The parties to the settlement - Pacific Gas and Electric, a unit of PG&E; the Southern California Edison Company, a unit of Edison International; the San Diego Gas and Electric Company, a unit of Sempra Energy; the California attorney general; the state utilities commission; the California Department of Water Resources; and the California Electricity Oversight Board - would also be allowed to claim up to $175 million from Mirant's bankruptcy proceedings.
Pacific Gas and Electric would receive assets from Mirant worth about $250 million to resolve accusations that its customers were overcharged during emergencies, Mr. Lockyer's office said. |
