Public Citizen Urges Maryland Officials to Revoke Electricity Contract With Reliant Due to Company’s Role in California Energy Crisis

June 2, 2004

Public Citizen Urges Maryland Officials to Revoke Electricity Contract With Reliant Due to Company’s Role in California Energy Crisis

Reliant Is Under Federal Indictment, Does Not Deserve Taxpayer-Funded Contract, Group Says

WASHINGTON, D.C. – Reliant Energy does not deserve a taxpayer-funded contract to provide electricity to Maryland public schools and local government entities because it is under federal criminal indictment for its role in the California energy crisis, said Public Citizen today. 

In a letter to Maryland officials responsible for awarding the contract to Reliant, the consumer advocacy organization asked them to re-evaluate the fitness of Reliant to receive such a lucrative deal and, if possible, revoke the contract.

On May 12, the Baltimore City Board of Estimates and the Baltimore Metropolitan Council awarded a multimillion-dollar, 23-month contract to Houston-based Reliant Energy.   The contract calls   for Reliant to supply electricity to   more than 20 Maryland government entities, including the Baltimore city government, the Baltimore Museum of Art and the Baltimore City Public School System.

The contract was awarded despite the fact that on April 8, the U.S. Department of Justice obtained a criminal indictment against the company, charging that Reliant conspired to commit wire fraud and manipulated the price of electricity during the California energy crisis of 2000-2001. In addition to the criminal indictment, Reliant Energy has agreed to pay $125 million to government authorities in fines, settlements and refunds related to the company’s role in California’s energy crisis.

“Why should Reliant profit from Maryland taxpayers after what it allegedly did to California consumers?” said Wenonah Hauter, director of Public Citizen’s Critical Mass Energy and Environment Program.  “It is inappropriate for Reliant to be rewarded with a new lucrative contract when it is under criminal indictment for cheating California residents out of lots of money – all of which went into the company’s record-setting profits.”

Hauter noted that the federal government can prohibit companies that have been indicted from receiving federal contracts. To read the Public Citizen’s letter, click here.

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