How energy giant tried to cut a deal / Duke Inc. offered to reduce bill if state halted probes

Christian Berthelsen, Chronicle Staff Writers

Published 4:00 am, Thursday, May 3, 2001

A major electricity generator sought to end state investigations and lawsuits into price gouging last month, offering in exchange to take less money than it was owed, according to documents made public yesterday.Duke Energy Inc. of Charlotte, N.C., offered in April to stop imposing premiums on electricity prices and said it would accept less than the full amount it was owed for power sales. But in exchange, the state would have to drop all investigations and curtail litigation surrounding the pricing of electricity.
The proposal, which the company made public yesterday, also sought to restrict the governor's comments on the crisis and bar him from blaming the state's energy problems on an unregulated energy system."Governor will continue to indicate that the California crisis is an aberration due to flawed legislation of Gov. Wilson, not a necessary consequence of deregulation, and will not advocate scrapping deregulation in wholesale power markets," the proposal said.
Officials said yesterday that the request never made its way to Davis himself. Instead it was passed on to the office of California Attorney General Bill Lockyer.
"(Duke) called us, and we referred it to the AG," said Steve Maviglio, a spokesman for Davis. "They came to us. We had a couple of meetings. There was no negotiation about any of the points. We don't have the power to call off any of the investigations, nor would the governor under any condition do that. This is their wish list."
A Lockyer spokeswoman, Sandra Michioku, would only say that the attorney general's investigation into power generators is continuing.
Federal energy regulators have ordered Duke to return $20 million in what it described as overcharges in the California power market in January and February.