
Reliant derivatives probe may hit core business
In April 2004, the US Department of Justice (DoJ) obtained an indictment of Reliant for price-gouging California consumers during the energy crisis in 2000-2001. The company is accused of shutting down power plants to increase energy prices before the alleged 'electricity shortages' began. It is also accused of using so-called derivatives 'wash trades' to inflate the size of its trading book.
In addition to the criminal indictment, Reliant has agreed to pay $125 million thus far to government regulators to settle allegations that the company manipulated energy markets.
And, as Public Citizen notes, according to the Code of Federal Regulations, 48 CFR 9.406, government agencies "shall solicit offers from, award contracts to, and consent to subcontracts with responsible contractors only... Indictment ... constitutes adequate evidence for suspension [of any government contract]."
"Reliant Energy is neither a responsible nor ethical company," said Wenonah Hauter, director of Public Citizen's energy programme. "Federal tax dollars should not be awarded to companies that are under criminal indictment. It's particularly egregious that one government agency would award Reliant with a contract when just last month it was indicted by another government agency."
Precedent has been set for banning or suspending companies from new contracts when they are either under investigation or have been convicted of a federal crime, Public Citizen noted. Both Enron and Arthur Andersen were barred from federal contracts when they were indicted.
But Reliant said the Department of Defense contract will save taxpayers $11.7 million when compared with the regulated standard offer service. It adds that the entity that was awarded the contract was not in existence let alone implicated when the DoJ began investigating Reliant for allegations of market abuse.
Reliant Energy Solutions East was the entity awarded the DoD contract, but Reliant Energy Services was the business implicated in the investigations. "We intend to vigorously contest the [DoJ] allegations and an indictment is not tantamount to guilt," said Reliant spokeswoman Pat Hammond.
Reliant also this month won a Baltimore Metropolitan Council contract to supply 134 megawatts of electricity to 23 Maryland government entities including the city of Baltimore.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Exchanges
Asia’s ETF assets on the rise – HKEX presents the results of Asia ETF survey 2019
Asia’s total ETF assets surged by 23.9% in the first half of 2019 thanks to an increasing adoption of ETFs into investment portfolios. According to a survey conducted by Hong Kong Exchanges and Clearing (HKEX), asset expansion in Asia’s ETF market is set…
NYSE Offers Exchange-Calculated Bitcoin Index, with More to Come
NYXBT will initially be based off data from Coinbase Exchange.
Deutsche Börse to set up Europe's first multi-asset RMB platform
German exchange group signs joint venture deal with CFFEX and Shanghai Stock Exchange
Exchange Revenue Figures Rise, Fall; Data Revenues Continue Steady Increase
A mostly positive mix of Q1 results also yield big increases in data revenues for some exchanges.
Lift-off for ASX Aussie dollar swap clearing business
Volumes jump following revamp of Sydney bourse's clearing incentive scheme
Exchange Data Revenues Make Positive Start to 2015
Acquisitions made up for some shortfalls in exchange revenues
CME looks to local banks for FX liquidity in emerging markets
Chicago-based exchange targets China, India and LatAm growth