SACRAMENTO, Calif. — State officials outlined evidence that shows energy traders and some municipalities manipulated the electricity market during California's energy crisis, leaving customers "plundered, defrauded and ripped-off."
The evidence, which includes more than 1,000 pages of material, is part of the state's bid to get about $9 billion in energy refunds for 2000 and 2001, when power prices soared and the state faced energy shortages and rolling blackouts. The crisis cost the state billions of dollars and disrupted energy markets across the West.
Officials planned to file the evidence with the Federal Energy Regulatory Commission on Monday.
California Attorney General Bill Lockyer said the filing "should force FERC to recognize, at long last, how egregiously and extensively Californians were plundered, defrauded and ripped-off by the energy pirates."
The evidence, as outlined Sunday by the California officials and representatives of two utilities, will attempt to show that sellers withheld electricity, colluded by sharing nonpublic information, routed power to other states to avoid price caps and submitted false electricity schedules that gave the impression of congested transmission lines.
The schemes were so widespread that "essentially the whole market was co-opted against the consuming public," said Eric Saltmarsh, general counsel for the Electricity Oversight Board. "We are adamant that we have submitted very clear evidence that there was pervasive withholding in this market."
"We've finally turned over thousands of documents that make a very strong case," said Gov. Gray Davis. "The massive cover-up by the generators is unraveling."
Saltmarsh said a number of companies mimicked the strategy allegedly employed by Enron Corp. that created congestion on transmission lines, including Sempra Energy and Duke Energy.
Duke spokesman Pat Mullen said attorneys for the the company based in Charlotte, N.C. hadn't seen the filing yet. "We're looking forward to the opportunity to finally defend and resolve, in a proceeding that relies on facts, these types of allegations," he said.
The California agencies were joined in the filing by Pacific Gas and Electric Co. and Southern California Edison, the state's two largest utilities. The high wholesale costs in 2000 drove both deep into debt, and PG&E declared bankruptcy in April 2001. The state's third-largest utility, San Diego Gas and Electric, didn't cooperate.
Lynch named Sempra, the parent company of SDG&E, as one of the companies that engaged in "Enron-like games," such as scheduling false loads.
Doug Kline, a Sempra spokesman, said the state's allegations were "simply untrue."
"This appears to be more saber-rattling by California politicians," he said, adding that he believed the accusations were designed to pressure Sempra into settling a dispute over a long-term energy contract with the state.
Federal regulators ordered that the specific evidence remain confidential, but state officials summed up their conclusions Sunday.
As part of the filing, California authorities urged FERC to open the documents to the public, saying consumers and congressional leaders, who have also investigated the crisis, have a right to know the details.
The investigation also found that several municipal utilities participated in the schemes, Saltmarsh said, or had "inappropriate arrangements — profit sharing between municipal entities in California and traders."