, designer of computer systems for California's deregulated power exchanges, has become the newest target in a meltdown that's engulfed the energy-trading sector for weeks.
Allegations from a California state senator, charging Perot Systems with teaching power companies to exploit loopholes in state's flawed electricity exchange, sent shares of the company tumbling 19% Wednesday to $14.55. The company, founded in Plano, Texas, by former presidential candidate H. Ross Perot, issued a statement denying any wrongdoing and priding itself on an "unquestioned record of integrity."
Perot Services said it provided no services to any of the energy traders participating in California's deregulated energy market.
But state Sen. Joe Dunn said a Perot Systems presentation, apparently made to
and other power traders in 1999, specifically outlined strategies later used by
to artificially inflate prices in California's flawed electricity market. The presentation was discovered amid thousands of documents subpoenaed last year.
Dunn's accusations came one day after the Federal Energy Regulatory Commission threatened to revoke rate-setting freedoms from four major electricity traders. FERC has given the companies ?
El Paso Electric
Portland General Electric
and the trading arm of
-- 10 days to supply information showing they didn't improperly drive up prices in the Western electricity market.
All four companies have expressed a willingness to comply with FERC's orders, which could stave off the agency's first revocation ever of a power company's market-based rate authority.
Even so, the companies weathered a massive selloff Wednesday. Shares of Avista plunged 13.4% to $12.26. El Paso Electric lost 7.9% to close at $13.31. And Williams plummeted 17.2% to finish at $9.12, its lowest close since 1993.
The fourth company, Portland General Electric, is owned by bankrupt energy giant Enron Corp. and no longer trades on an exchange.