Perot's unquestioned record of integrity

[Sabri Oncu <soncu@xxxxxxxxxxx>]

Perot Systems Shares Down After Calif. Allegation
Wed Jun 5, 1:59 PM ET

LOS ANGELES (Reuters) - A California state senator has alleged
Perot Systems Corp. , which designed the computer systems for the
state's power exchanges, with showing power companies how to
exploit loopholes in those systems to inflate prices.

Shares of Perot Systems, founded in 1988 by former presidential
candidate H. Ross Perot, plunged in response to the allegation,
trading down more than 24 percent on Wednesday at $13.60 on the
New York Stock Exchange (news - web sites).

State Sen. Joseph Dunn, who chairs a committee investigating
price manipulation in California's energy markets, on Tuesday
released documents from a presentation that Plano, Texas-based
Perot allegedly made to Reliant Energy and other participants in
California's electricity markets.

That presentation, which mapped out a strategy for creating
congestion on the California electricity grid and driving up
prices, represented a clear conflict of interest and could open
Perot to civil and criminal liability, Dunn said, according to
the Los Angeles Times.

Perot Systems designed the computer systems for the now-defunct
California Power Exchange and the state's Independent System
Operator, which runs most of California's electric grid.

Perot Systems designs and maintains complex computer systems. H.
Ross Perot remains chairman of the board and his son, Ross Perot
Jr., is president and chief executive.

A staff member in Dunn's office confirmed the senator, a Democrat
who represents a district in Orange County south of Los Angeles,
had released the alleged presentation on Tuesday.

Copies of the documents were not immediately available. It was
not immediately clear when the alleged presentation had been made
or whether any of the companies that had seen it had acted on the
advice it contained.

A Perot Systems spokesman said: "While we have not had the
opportunity to review any documents, we are proud of the work we
have done for California consumers and even more proud of our
unquestioned record of integrity."

California opened its power markets to competition in 1998 and
two years later prices for electricity skyrocketed. The rise has
been attributed in part to a shortage linked to rising demand but
also drew allegations that power marketers were manipulating the
market.

Bankrupt energy giant Enron Corp. , in memos released by federal
regulators last month, outlined strategies with names such as
"Fat Boy" and "Death Star" through which they used California's
flawed deregulation model to reap huge profits.

The state's largest utility, Pacific Gas & Electric, a unit of
San Francisco-based PG&E Corp. , filed for Chapter 11 bankruptcy
protection in April 2001 after state regulators refused to allow
the company to fully pass on soaring power purchase costs to its
customers.

Full article:
http://story.news.yahoo.com/news?tmpl=story&u=/nm/20020605/tc_nm/
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