Industries Addressing the 2000-2001 Western Energy Crisis
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.