Power Woes: An Inside Look

California Highway Patrol Officer Christopher Throgmorton stands next to a 1956 Ford Thunderbird on June 19, 2007, in Moorpark, Calif.. The car, reported stolen in Palo Alto, Calif. 31 years ago, was returned by a resident who recently purchased the car on eBay and later learned it had been stolen. AP / Redmond, Ventura County Star

Three former power plant workers, who spoke exclusively with CBS News, made their way to California's state capitol Friday — the first insiders to testify publicly about how they believe Duke Energy may have pushed up prices, reports CBS News Correspondent Vince Gonzales.

The men repeated the accusations they made to CBS News — that the supply of electricity was manipulated by plant officials who ordered units shut down for maintenance when the right spare parts were not on hand. They also allegedly ordered workers to throw out thousands of parts.

Market Manipulation?
In a CBS News exclusive, three former California power plant employees claim their company shut down equipment to manipulate prices during the state's power crunch.

Click here to read CBS News Correspondent Vince Gonzales' exclusive report.
"To take something down and not have parts to fix it doesn't make any sense to me," said former Duke Energy employee Glenn Johnson. When asked if this occurred, he replied, "Yes, sir."

Johnson says other units were taken offline when they didn't need maintenance and plant officials told him some units were offline for "economic reasons."

"In my opinion, I believe that the word economics was a way to explain limiting load, curtailing the load, to boost prices," he said.

The hearing did have its lighter moments.

Ed Edwards testified how Duke threw huge parties for workers and told them the facility "and they were just extremely impressed with the amount of money that this facility was making them."

"I find today's charges disturbing and frankly incredible," said Duke Energy's Bill Hall.

Duke admits throwing parties but denies every other allegation, saying maintenance schedules were not manipulated and the plant always had the needed spare parts.

"I come from a company that is known internationally for how it operates its units, both from a reliability standpoint and an efficiency standpoint. We brought that culture here to the plants we purchased in California," continued Hall.

And Duke says units that were offline for economic reasons just weren't needed.

"When they reference that they were off for economy that's simply the market wasn't calling for that additional capacity."

In January Duke charged a record of almos $3,900 a megawatt, earning the company $11 million. This week federal officials ruled those megawatts were worth only $275 apiece and demanded a refund for California consumers. Officials also noted that even with the lower prices, Duke will still make a profit.

The rate Duke charged earlier this year is double the amount recently cited by California Gov. Gray Davis as an "obscene" example of price gouging. Davis plans to meet with Johnson, Edwards and assistant control room operator Jimmy Olkjer on Monday to thank them for their testimony.


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  • CBSNews.com staff CBSNews.com staff

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