An energy company accused of artificially inflating the cost of electricity, leading to California's power crisis a decade ago, agreed to pay a $120 million settlement that will fund 10,000 electric car charging stations across the state, Gov. Jerry Brown announced Friday.
The money from NRG Energy Inc. will help California try to turn a black mark on its past power management into an attempt at future energy efficiency.
"This is a truly creative deal that offers tremendous value for California utility customers," said Mike Florio, a commissioner with the California Public Utilities Commission, which negotiated the settlement. "In one stroke, it closes out an unfortunate chapter in our history and propels us down the road to a clean transportation future."
Brown also signed an executive order setting goals to have 1.5 million vehicles with no tailpipe emissions on California's roads by 2025, and aiming for virtually every vehicle on the road to be emission-free by 2050.
The $120 million settlement, to be paid over four years, stems from decade-old claims against NRG and Dynegy Inc., which co-owned plants that generated California power at the time. NRG assumed full responsibility in 2006 when it bought Dynegy's half of the assets, and the settlement resolves the litigation, NRG said in a statement.
California officials claimed that during 2000 and 2001, the state overpaid nearly $9 billion to companies that artificially raised prices by withholding energy supplies, driving up rates and causing the notorious rolling blackouts that left power customers sporadically in the dark.
Other companies involved in the crisis included Enron Corp., Williams Companies Inc., Duke Energy Corp. and Mirant Corp. Most reached settlements with the state several years ago.
Simon Mui, a scientist who works on electric vehicle issues for the National Resources Defense Council, called the plan "great news, particularly given where the funds came from."
"What better way to spend it?" Mui said in a phone interview. "This came from the electricity price shocks, and now we're using it to help the gasoline price shocks."
Some $100 million of the money from NRG will fund at least 200 public fast-charging stations, and another 10,000 plug-in units at 1,000 locations in the San Francisco Bay Area, the San Joaquin Valley, the Los Angeles basin and San Diego County, the governor said.
"With this agreement, the people of California will gain a charging infrastructure ready to support their current and future fleet of electric vehicles," David Crane, CEO of Princeton, N.J.-based NRG, said in a written statement, "and we will be helping the state meet its clean car goals."
The other $20 million will go toward reducing rates for utility customers, Brown said.