Before he was officially replaced Tuesday by one of the three members from the state public utilities commission, Nevada’s lame duck Consumer Advocate Tim Hay fired a legal broadside against Reliant Energy and some of its affiliates, alleging they conspired with now bankrupt Enron Corp. to drive up wholesale power and natural gas costs in Nevada and California during the infamous 2000-2001 energy market meltdown.
The suit was filed last Thursday in a federal district court in Clark County (Las Vegas), NV. Hay was replaced as consumer advocate by Nevada PUC Commissioner Adrianna Escobar Chanos earlier last week (see Power Market Today, Dec. 30, 2004).
Hay three years ago filed a similar lawsuit against El Paso Corp. and Sempra Energy, claiming they manipulated wholesale natural gas prices at the California-Arizona border during the western energy crisis. That suit eventually resulted in a $1.6 billion settlement agreement last year between El Paso and various plaintiffs in Nevada and California.
The latest legal action named Reliant, Reliant Resources, CenterPoint Energy and Kathleen Zanaboni, a Reliant trader in the West.
Nevada’s consumer advocate, a position in the state Attorney General’s Office, alleged in the latest suit that between November 2000 and March 2001 Reliant and Enron manipulated natural gas supplies at the Arizona border hub of Topock through their trading and purchasing practices, using the scheme called “churning.” The maneuvers resulted in Reliant allegedly making excess profits from consumers in southern Nevada and Southern California who paid higher gas and electric prices, he charged.
While alleging that Reliant bought and sold natural gas supplies many times over its needs at the time, the lawsuit does not specify specific damage amounts, nor quantify the excess profits.
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