HomeMy WebLinkAboutMINUTES - 05152001 - SD.4 8D. 4
TO: BOARD OF SUPERVISORS
Contra
FROM: Supervisor Mark DeSaulnierr,.%
p
Supervisor John Gioia o _ ,'s Costa
DATE: May 15, 2001 County
'9 CUiJN's
SUBJECT: Energy Related Litigation
SPSPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS
1. DIRECT the County Counsel to investigate the possibility of the County joining as a
plaintiff in a civil lawsuit by Lt. Governor Cruz Bustamente against five out-of-state
power generators, alleging a conspiracy to engage in systematic price-fixing of
California's energy market.
2. DIRECT the County Counsel to investigate the County's possible role in a federal
lawsuit initiated by the California State Legislature against the FERC (Federal Energy
Regulatory Commission.) as well as any other suits that may serve the interests of the
people of California.
BACKGROUND
Lt. Governor Bustamente and Assemblywoman Barbara Matthews (D-Tracy) (as private citizens
on behalf of the taxpayers of California) have filed a civil lawsuit against a cartel of five out-of-
state power generators alleging they have systematically engaged in a price-fixing conspiracy to
manipulate California's electricity market to "extract"unlawful profits that are depleting the
.state's treasury. Named as co-defendants are Dynegy, Inc., Duke Energy, Mirant, Inc., Reliant
Energy, Inc. and Williams Energy Services. Also named individually are the chief executive
officers of each company.
The central thrust of the lawsuit is that these five power generators gained strategic control over
19 gas-fired power plants in California and engaged in unlawful trading practices to manipulate
the market and gain unrestrained monopoly power to set prices in California. The suit seeks to
recover billions of dollars in overcharges imposed on the California Department of Water
Resources, which was forced to buy electricity from the defendants. The State of California's
budget surplus has been drained by payments to these defendant out-of-state power generators,
which, in turn has reduced the revenues to Contra Costa County and other local governments.
CONTINUED ON ATTACHMENT: YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATURE(S):
ACTION OF BOARD ON May 1 5 , 2 001 APPROVED AS RECOMMENDED_= OTHER
VOTE OF SUPERVISORS
1 HEREBY CERTIFY THAT THIS IS A TRUE
_XgUNANIMOUS(ABSENT _ _ _ _ ) AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN.
ATTESTED May 15 , 2001
JOHN SWEETEN,CLERK OF THE BOARD OF
SUPERVISORS AN COUNTY ADMINISTRATOR
Contact:
cc: County Counsel
BY ,DEPUTY
Senate President pro Temp John Burton and Assembly Speaker Robert Hertzberg announced that
the California State Legislature will file a lawsuit against FERC for refusing to prevent price-
gouging by power generators.
The suit, which will be brought jointly by the Assembly and Senate, will allege that FERC has
abdicated its responsibility to assure that power generators charge just and reasonable rates for
electricity as required under the Federal Power Act. The lawsuit will also seek to require FERC
to prospectively limit the prices charged by generators and will seek to establish a refund
program to recover excess profits that generators have received due to FERC's inaction.
It is anticipated that the County Counsel will report back to the Board of Supervisors in a closed
session as soon as its research and investigation is complete.