The highly-publicized lawsuits by California-based utilities against Houston-based Reliant Energy Inc. over allegations that Reliant pumped up trade volumes and revenues during the 2000-01 energy crisis in Western states died with a whimper yesterday as Reliant agreed to pay $150 million cash and waive another $300 million in claims to settle the utilities’ lawsuits.

The agreement ends investigations conducted by attorneys general in California, Washington and Oregon and all civil litigation filed by the California Attorney General’s Office, including a pending antitrust lawsuit. The agreement comes just weeks after Reliant agreed to settle all shareholder class-action lawsuits relating to the power crisis for about $68 million. Previous posts here and here report on criminal indictments relating to this civil litigation.
Reliant did not admit to any liability and there were no court findings of any violations of securities laws. The various lawsuits and investigations against Reliant focused on allegations that Reliant failed to disclose certain trading activities from 1999 to 2001 that took advantage of the Western power shortage at that time to pump up Reliant’s revenues. The various lawsuits claimed damages in the billions; the settlement amount that Reliant will pay is a fraction of the amount of those claims. Given the size of those claims and the highly-charged publicity surrounding them, the settlement is a clear victory for Reliant despite the self-serving statements of California politicians taking credit from protecting California residents.