Reliant Resources Inc.’s power trading subsidiary, Reliant Energy Services Inc., and four individual traders pleaded not guilty Friday to charges that they artificially drove up power prices in California by keeping generation capacity off the market during a two-day period in June 2000 (see Daily GPI, April 12).
The Houston-based energy company and individuals entered their pleas one day after a federal grand jury in San Francisco, CA, indicted them on charges that they schemed to manipulate and defraud the California market, costing electricity buyers in the state as much as $32 million during the period.
According to the criminal indictment, Reliant Energy and the four individuals each were charged with conspiracy to commit wire fraud and commodities manipulation, wire fraud, and manipulation and attempted manipulation of the price of a commodity in interstate commerce. Reliant Energy is the first company to be indicted on criminal charges for its role in the California power crisis.
The individuals named were Jackie Thomas, 49, former vice president of Reliant’s Power Trading division; Reggie Howard, 37, former director of Reliant’s West Power Trading division; Lisa Flowers, 37, a term trader for the West Power Trading division; and Kevin Frankeny, 42, the company’s manager of western operations. All are residents of Texas.
Thomas and Howard have left the company, while Flowers and Frankeny have been put on administrative leave, according to a report in the Houston Chronicle.
The four appeared before a federal magistrate in San Francisco Friday. Reliant Energy was represented by San Francisco attorney, William Goodman. The individuals each were released on $250,000 bond secured by real property. Reliant Energy wasn’t required to put up bond.
The parties next court appearance is scheduled for May 6 before U.S. District Judge Jeffrey S. White in San Francisco.
If convicted, Reliant Energy would face millions of dollars in penalties. The individuals face the prospect of prison on top of hundreds of thousands of dollars in fines if a jury finds them guilty.
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