Reliant to face new federal charges

Reliant Resources Inc. ((RRI.N)) on Monday said federal prosecutors in California told the power company they would seek a criminal indictment against current and former employees of its Reliant Energy Services unit.

The planned indictment will be based on allegations that the subsidiary engaged in price manipulation by curtailing Reliant's power generation in California on two days in June 2000, the company said.

The Houston-based company said it expected no material impact on its business operations from the expected indictment, but that it intends to contest any charges.

Reliant said it had entered into a settlement agreement with the Federal Energy Regulatory Commission in January 2003 concerning the charges behind the new possible indictment.

As part of that agreement, Reliant agreed to pay $13.8 million to resolve the agency's accusations that it deliberately idled power plants at the height of the California energy crisis in order to manipulate the market.

The company also agreed to pay up to $50 million in October to settle FERC charges related to its trading activities in California. The company may yet be forced to pay potential refunds in a case brought by the state of California for alleged overcharges.

In December, Duke Energy Corp. agreed to pay $2.5 million to settle outstanding charges related to the Western power crisis, including potentially manipulative bidding practices and physical withholding of supplies.