Friday, October 10, 2003

SURPRIZE! Schwarzenegger's First Move: Cut Loose the Energy Fraudsters

One of Schwarzenegger’s boldest moves, . . . will be to enter into quick settlements with about a dozen energy companies accused of manipulating the state’s electricity market during the height of the state’s energy crisis two years ago, aides to Schwarzenegger said Wednesday.

For three years, California has been engaged in a costly legal battle against dozens of energy companies it said ripped off the state by purposely withholding much-needed electricity from consumers, creating an artificial shortage while boosting the companies’ profits.

Federal regulators ordered electricity refunds for California totalling about $3.3 billion, but Davis said the state deserves at least $9 billion and “not a penny less.”

Richard Katz, an energy advisor to Davis, told the Sacramento Bee last month that he thinks the state will have to sue to recover significantly more money; the state already has refund cases pending before the 9th U.S. Circuit Court of Appeals.

"The governor has said he'll go to every court, every venue," Katz said. Litigation "is the only process we have for getting justice for ratepayers."

But Schwarzeneggeer aides said the lawsuits are deterring energy companies from building power plants in California, which could lead to another energy crisis in 2006, and the legal wrangling alone is costing the state millions of dollars.


Enron and Dynergy could not be reached for comment.


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