Reliant Resources unit indicted

Friday, April 9, 2004 | 10:38 a.m.

SUN STAFF AND WIRE REPORTS

SAN FRANCISCO -- A Reliant Resources Inc. power-trading unit and four employees were indicted Thursday in the first criminal case lodged against a company accused of manipulating power prices during California's energy crisis.

A federal grand jury indicted Reliant Energy Services Inc., its former vice president, a director, manager and trader in an alleged scheme to illegally increase electricity costs while creating a "false and misleading appearance of an electricity supply shortage." Reliant denied the charges.

The company is accused of shutting down four of its five generating stations, withholding power from the market and purchasing electricity instead of producing it to meet quotas.

Nevada Consumer Advocate Tim Hay said the alleged actions on the part of Reliant would have had an impact on the inflated power prices being paid by Nevada utilities, including Nevada Power Co. of Las Vegas.

"It's certainly relevant," he said, adding that the possible dollar impact of the energy supplier's actions on Nevada consumers was unknown at this time. "It definitely had an impact on Nevada."

The indictments, unsealed Thursday, said the company disseminated false and misleading rumors to brokers about the maintenance status of power plants and the availability of power for three summer months in 2000 at the time of rolling blackouts in California.