June 8, 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 the Maryland Stadium Authority (MSA) and two state universities 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, 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 March 30, the Maryland Department of General Services accepted a two-year, $21.2 million bid by Reliant Energy to deliver electricity to the MSA, the University of Maryland-Baltimore and Morgan State University. This comes on the heels of other lucrative deals secured at the expense of taxpayers in the Maryland-DC region. On May 12, the Baltimore City Board of Estimates and the Baltimore Metropolitan Council awarded Reliant Energy a $67.3 million contract to provide electricity to more than 20 local government entities. On May 19, the U.S. Department of Defense awarded a $35.9 million contract to the company to deliver electricity to several military installations in the Maryland-DC region.
These contracts were 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 for intentionally shutting down power plants to create blackouts that drove up profits during the California energy crisis.
“It’s outrageous that Reliant, a company under criminal indictment, has the audacity to try to profit from Maryland taxpayers while still benefiting from its record-setting profits allegedly stolen from California residents,” said Wenonah Hauter, director of Public Citizen’s Critical Mass Energy and Environment Program. 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.