Duke Energy to pay $207.5 million to settle Calif. energy claims

Tuesday, July 13th 2004, 9:35 am
By: News On 6

CHARLOTTE, N.C. (AP) _ Duke Energy Corp. will pay $207.5 million in cash and credits to settle claims that it overcharged for wholesale electricity during the California energy crisis of 2000-01, the company said Tuesday.

To cover the settlement, the Charlotte-based energy company will take a $104.9 million pretax charge to its second-quarter results. The balance of the settlement will come from $102.6 million in previously announced reserve and associated offsets, Duke said.

Duke is scheduled to release its second-quarter earnings July 29.

Shares of Duke Energy fell 8 cents to $20.39 in early trading Tuesday on the New York Stock Exchange.

The settlement involved federal regulators, the states of Washington and Oregon and California's three largest investor-owned utilities, Duke said in a statement.

``Today's announcement brings welcome closure to these protracted proceedings, removing the associated risks and burdens of regulatory and legal uncertainty,'' said Fred Fowler, Duke Energy president and chief operating officer. ``It also eliminates the time and costs necessary to litigate these issues.''

California Attorney General Bill Lockyer said about $172 million of the settlement will go to California ratepayers, resolving claims that Duke overcharged for wholesale electricity.

``This is a good settlement for residential and business ratepayers, who were stuck with a multibillion dollar tab after energy companies ran amok in an unprecedented gouging spree,'' he said.

The settlement must be approved by the California Public Utilities Commission and the Federal Energy Regulatory Commission. Under terms of the settlement, Lockyer is to end civil enforcement actions against Duke, the attorney general said.