California Energy Crisis A Sham

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State officials say California's energy crisis -- its blackouts and sky-high power prices that cost California billions -- was manufactured by key power companies that hoarded energy supplies to make more money, reports CBS News Correspondent Vince Gonzales.

Overall, the companies kept more than 30 percent to 50 percent of their power off the market. During some of the worst moments of the crisis, they held back even more -- anywhere from 55 to 76 percent of production -- all in an effort, whistleblowers told CBS News more than a year ago, to cut the power supply and drive up prices.

But the companies denied allegations of manipulation.

"It's preposterous. It never happened," said Duke Power Company's Tom Williams in June 2001.

And they're still denying it today.

But CBS News obtained records showing federal regulators have power plant control room audio tapes that prove traders from Williams Energy called plant operators and told them to turn off the juice. The government sealed the tapes in a secret settlement and still refuses to release them.

The new report found Williams held back more energy from California than any other company. It's vindication for state investigators upset that energy companies blame the crisis on everything from the weather to not enough power plants.

"This report shows that those excuses are simply untrue. There was enough capacity to avoid almost all of the blackouts," Gary Cohen, state investigator said.

Meanwhile, in San Francisco, a federal grand jury is now examining the role the power companies and energy traders played in the California market's meltdown and whether any laws were broken.