Election Section

Perot denies company hyped ‘loopholes’

Friday July 12, 2002

SACRAMENTO — Former presidential candidate H. Ross Perot denied Thursday that his consulting company showed power suppliers how to manipulate California’s energy market to drive up wholesale prices. 

“These allegations are unfounded,” Perot told a panel of state lawmakers. 

A California Senate committee is investigating the state’s energy crisis and any role played by Perot Systems as well as power suppliers. 

State Sen. Joe Dunn said Perot Systems outlined “flaws in the system to market participants” after providing computer help to the California Independent System Operator, the power grid manager, and the now-defunct Power Exchange as the state launched its deregulated energy market several years ago. 

Internal e-mails show Perot Systems tried to take advantage of what one Perot consultant described as “over a thousand loopholes in the California system,” committee attorney Larry Drivon said. 

Last year, a shortage of electricity led to the near-collapse of California’s three largest investor-owned utilities and a round of rolling blackouts. State officials have blamed many of the problems on market manipulation by out-of-state electric generating or trading companies, including the now-bankrupt Enron Corp. 

Perot said his company had no conflict of interest in its “unsuccessful attempt” to capitalize on its knowledge of California markets. He said the information presented to energy companies was publicly available. 

“The market rules were public knowledge. Everybody could have access to the market rules,” Perot testified.