Mirant

[Joe Stocks]

UPDATE 1-Mirant settles Calif price manipulation case
Wed Apr 13, 2005 11:53 AM ET
(adds quote, background)
WASHINGTON, April 13 (Reuters) - The Federal Energy Regulatory Commission on Wednesday approved a Mirant Corp. (MIRKQ.PK: Quote, Profile, Research) settlement, valued at nearly $500 million, to resolve allegations that the bankrupt energy firm manipulated prices during the 2000-01 California energy crisis.

The agreement requires Mirant to sign over to California's attorney general, state energy boards and the state's three investor-owned utilities about $283 million that Mirant is owed in unpaid power bills from the crisis. The company must also turn over about $37 million for sales to the state's now-defunct Power Exchange, FERC said.

The so-called global settlement also means that Mirant will support California parties' unsecured claim of $175 million in bankruptcy proceedings, which will be overseen by a judge, the agency said.

Atlanta-based Mirant filed for bankruptcy protection in July 2003 during an industry downturn sparked by the collapse of Enron Corp. in late 2001.

"This settlement will benefit customers and end the lingering uncertainty in Western energy markets," said FERC Chairman Pat Wood.

A spokesman for Mirant was not immediately available for comment.

FERC staff found "massive manipulation" by dozens of energy companies, including now-bankrupt Enron Corp, that spurred blackouts and bankruptcy of California's biggest utility during the energy crisis. A FERC administrative law judge has recommended that energy companies refund about $3 billion to California, an amount far less than the state's demand for $8.9 billion.

FERC commissioners have yet to approve the agency judge's recommendation.