SAN JOSE, CALIFORNIA - Bankrupt power producer Mirant agreed to pay $750 million to settle California authorities' claims that the company overcharged utilities and consumers through fraudulent schemes during the state's energy crisis four years ago.

"Given Mirant's bankruptcy, this is an excellent settlement for Californians," said state Attorney General Bill Lockyer. "I hope the reorganized company's new management will work constructively with California to make sure history does not repeat itself." Lockyer had alleged in a lawsuit that Mirant drove up prices by withholding electricity from the state by faking power-plant outages. The suit alleged it also manipulated energy markets with schemes like the ones Enron had dubbed "Death Star" and "Get Shorty." The proposed settlement calls for the Atlanta-based company to write off $320 million in unpaid wholesale electricity bills that California had owed it from the energy crisis in 2000 and 2001. It also allows Californians to claim $175 million from Mirant's bankruptcy proceeding. PG&E would get electricity, a power plant and other compensation worth $250 million. Mirant also would pay $4.75 million to cover legal fees. Mirant denied wrongdoing and company officials said they agreed to settle to avoid the cost and uncertainty of continued litigation. "Mirant does not believe it broke any laws," said Anne Cleary, Mirant's western vice president. "Prices were high and there was a market structure that was poorly designed. You can litigate or you can move on in life, and Mirant chose to basically put the past behind us and remove what could have been a very large stumbling block in our bankruptcy." The Federal Energy Regulatory Commission and the bankruptcy court overseeing Mirant's case must approve the settlement. Lockyer's office sued Mirant in August alleging the company "unjustly profited from rampant lying and fraud." The suit sought unspecified damages that Lockyer had said could total hundreds of millions of dollars. From the settlement, the biggest chunk would go to Pacific Gas & Electric and its ratepayers. Southern California Edison and San Diego Gas & Electric also would get a portion. PG&E also would get permits to a 530-megawatt unfinished power plant and a six-year electricity contract. Mirant is expected to file a reorganization plan with a federal court in Texas this month and to emerge from bankruptcy later this year. The settlement is the ninth to come out of California's 2000- 2001 energy crisis, produced by Lockyer's office with other state agencies and utilities, for a total value of $3.38 billion. Of that amount, $2.57 billion is in ratepayer relief.

Lockyer had alleged in a lawsuit that Mirant drove up prices by withholding electricity from the state by faking power-plant outages. The suit alleged it also manipulated energy markets with schemes like the ones Enron had dubbed "Death Star" and "Get Shorty."

The proposed settlement calls for the Atlanta-based company to write off $320 million in unpaid wholesale electricity bills that California had owed it from the energy crisis in 2000 and 2001. It also allows Californians to claim $175 million from Mirant's bankruptcy proceeding. PG&E would get electricity, a power plant and other compensation worth $250 million. Mirant also would pay $4.75 million to cover legal fees.

Mirant denied wrongdoing and company officials said they agreed to settle to avoid the cost and uncertainty of continued litigation.

"Mirant does not believe it broke any laws," said Anne Cleary, Mirant's western vice president. "Prices were high and there was a market structure that was poorly designed. You can litigate or you can move on in life, and Mirant chose to basically put the past behind us and remove what could have been a very large stumbling block in our bankruptcy."

The Federal Energy Regulatory Commission and the bankruptcy court overseeing Mirant's case must approve the settlement.

Lockyer's office sued Mirant in August alleging the company "unjustly profited from rampant lying and fraud." The suit sought unspecified damages that Lockyer had said could total hundreds of millions of dollars.

From the settlement, the biggest chunk would go to Pacific Gas & Electric and its ratepayers. Southern California Edison and San Diego Gas & Electric also would get a portion. PG&E also would get permits to a 530-megawatt unfinished power plant and a six-year electricity contract.

Mirant is expected to file a reorganization plan with a federal court in Texas this month and to emerge from bankruptcy later this year. The settlement is the ninth to come out of California's 2000- 2001 energy crisis, produced by Lockyer's office with other state agencies and utilities, for a total value of $3.38 billion. Of that amount, $2.57 billion is in ratepayer relief.