NEW YORK (CNN/Money) -
Federal investigators have found that energy trader Williams Cos. conspired with AES Corp. in April 2000 to drive up electric prices during the California energy crisis, according to a published report Friday.
The Wall Street Journal said it obtained a Federal Energy Regulatory Commission report through an open records act lawsuit. It said the report revealed that taped phone conversations show that a former Williams executive encouraged AES, which was running two power plants in the Los Angeles area whose output was exclusively marketed by Williams, to keep one of the plants off line in order to drive up prices.
The paper said the shutdowns enabled Williams to collect $750 per megawatt hour for electricity it supplied to the state, rather than the previously agreed on $63 an hour, producing a $10 million windfall over 15 days.
The Journal reported that people familiar with the proceedings said a federal grand jury has issued subpoenas during the past week to a slew of power companies with the aim of determining whether they worked together to rig the market. Williams and AES both received subpoenas, the paper said.
Executives of the two companies had limited comment on the report to the Journal. A Williams official said the company provided information to FERC under the understanding it would be kept confidential. " "It doesn't add anything to the dialogue to release this document now," Bill Hobbs, president of Williams Energy Marketing & Trading, said.
AES spokeswoman Sandra Ross told the paper the company regards the case as "ancient history. We have nothing further to add."
Shares of Williams (WMB: Research, Estimates) gained 36 cents, or 14 percent, to close Thursday at $2.79 despite reporting a 40 cent a share loss for the third quarter rather than the 1 cent a share profit forecast by analysts. AES gained 1 cent to $1.54.
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