Shares of Dynegy Inc, Reliant Resources Inc and other electricity suppliers rose after a regulatory judge determined they are owed money by California's utilities for power sales made during the state's energy crisis.
Dynegy shares rose US$0.15, or 17 percent, to US$1.05 in New York Stock Exchange composite trading. Reliant rose US$0.50, or 22 percent, to US$2.75; Williams Cos rose US$0.48, or 21 percent, to US$2.82.
The ruling may signal reduced liability for the companies, which California had accused of manipulating power prices and overcharging utilities in the state by US$8.9 billion, investors said. While the judge ordered US$1.8 billion in refunds, he said the companies are still owed US$1.2 billion for unpaid bills.
Most of the energy suppliers had "expected a washout between what they're owed and what they'd have to refund," said Edward Paik, who manages US$450 million, including 2 million Reliant shares, in the Liberty Utilities Fund. "If they still have money due them, that's better than expected."
Shares of Williams and Reliant had plunged more than 80 percent this year, and Dynegy fell more than 95 percent, as regulators and prosecutors widened their probe of price manipulation during California's energy crisis in 2000-2001.
A US Federal Energy Regulatory Commission administrative law judge, Bruce Birchman, concluded after a review of contracts that dozens of electricity suppliers overcharged California utilities by about US$1.8 billion, yet had been owed US$3 billion.
The judge's ruling is subject to a 20-day public comment period and needs to be approved by the commission's three members before becoming final. Findings that California's electricity or natural-gas prices were manipulated may prompt the commission to increase the amount of the refunds, officials said.
The commission hopes to have final rulings in March, spokesman Kevin Cadden has said.
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