Reliant Energy has reached a $445 million settlement with the states of California, Oregon and Washington and California's three largest investor-owned utilities to resolve litiagtion which alleged that the company overcharged for power during the California energy crisis of 2000 and 2001.
The company said the settlement resolves all of the civil litigation and claims against it issued by the states of California, Oregon and Washington, the three Californian utilities, Pacific Gas & Electric Co., Southern California Edison and San Diego Gas & Electric unit, and other parties.
The total value of the settlement is $445 million, which includes a cash payment of $150 million. As part of the settlement, Reliant will waive claims to its receivables for power deliveries from January 1, 2000 to June 21, 2001 as well as the interest owed on those receivables. Reliant will record an estimated $350 million pre-tax charge in the third quarter of 2005 to reflect the agreement.
The settlement is subject to the finalization of a definitive settlement agreement and the approval by FERC, the California Public Utilities Commission and the courts where the class action cases are pending. Approvals are expected by the end of the year.