Addressing the 2000–2001 Western Energy Crisis: Settlements
Fact Sheet on Reliant Energy
August 15, 2005
The Federal Energy Regulatory Commission (FERC) enforcement staff,
California Parties, Attorneys General of Washington and Oregon,
(the plaintiffs) and Reliant reached an agreement today to settle
several FERC and court proceedings involving Reliant's activities
during the Western energy crisis of 2000-2001. The general terms
of the agreement are outlined in a Memorandum of Understanding
(MOU).
Although the MOU is a non-public document, its general terms are
public. A definitive agreement is scheduled to be finalized within
45 days after the execution of the MOU and will be a public document.
The FERC must approve the definitive agreement(s) before they
have the effect of law.
The terms of today's MOU are as follows:
- Reliant must pay $460 million in cash, which is in addition
to $65 million in prior FERC settlements;
- Reliant must allow an independent audit of outages for 12
months following FERC approval of the definite agreement;
and continue its "must-offer" obligations under the 2003 FERC
settlement for an additional two years;
- All obligations under Refund Proceedings are deemed settled
and all claims released relating to claims before FERC from
Jan. 1, 2000, to Dec. 31, 2001;
- The class actions against Reliant for its Western Energy
Crisis activities are settled;
- All other market participants may opt in to the settlement
and its benefits, but if they do not opt in, their rights
to pursue claims against Reliant are not affected.
If this settlement is approved by the FERC Commissioners, the
total settlements from the 2000-2001 Western energy crisis that
the Commission has accepted or helped realize nearly $6.3 billion
so far. This settlement comes one month after a settlement of
more than $1.5 billion with Enron for its role in the Western
Energy Crisis. This settlement agreement does not resolve the
criminal matters pending before the federal court in California.
For additional information regarding the Western Energy Crisis
2000-2001, see http://www.ferc.gov/industries/electric/indus-act/wec.asp.
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Important Items
Final Report on Price Manipulation In Western Markets (March 2003)
Enron Trading Memos
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(August 2001)
