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		 Subject: Fwd: Reuters - Calif. bill would penalize energy price gougers


----- Message from "Tracey Bradley" <tbradley@bracepatt.com> on Tue, 24 Apr 
2001 10:19:24 -0500 -----
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
FYI

Calif. bill would penalize energy price gougers 

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     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. 

     


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Copyright , 2001 Reuters Limited.