Mirant Refutes California's Claims

In response to recent allegations made by the California Parties on March 3, Mirant (NYSE: MIR) today is submitting to the Federal Energy Regulatory Commission (FERC) its rebuttal affirming what the company has stated for the past two and-one-half years: Mirant acted ethically and within the bounds of the California market design during the California energy crisis.

"We are prepared to defend the reputation of our company and employees all the way to the U.S. Supreme Court if necessary," said Rick Pershing, executive vice president, Mirant. "We are completely confident that our conduct was proper and legal.

"All along, it has been up to the California Parties to prove their allegations. We've cooperated fully with their investigation and have provided over 3,500 hours of audio recordings of employee conversations, over 5,000 pages of e-mail, and over 70,000 pages of other documentation. They've failed in a desperate filing to reinterpret the facts. We've carefully reviewed their 3,000-page filing and found so many mischaracterizations about our conduct that we considered filing sanctions against the people responsible. But at this point we decided to let the facts speak for themselves.

"Our filings today with FERC provide the facts to refute these allegations.

"For example, the California Parties allege Mirant withheld power in 2000 and 2001. In truth, the California Parties fail to acknowledge approved maintenance down time, certain environmental restrictions, and the fact that, during many periods when Mirant was alleged to be withholding power, the decision to run our power plants was in the hands of the California Independent System Operator (CAISO) -- not Mirant. In our review, these are disturbing and blatant examples of picking and choosing information to make a desperate case.

"Also, the California Parties completely ignore that Mirant's units were generating more power during 2000-2001 than when they were operated by their previous owner."

Pershing added, "These allegations are a holdover from the general absurdity surrounding the energy crisis. As part of our efforts to supply power to California, we ran our units beyond their environmental restrictions as directly requested by the CAISO. We secured special permission from environmental agencies to do so. But, despite running our plants and preventing a blackout in the Bay Area, the City of San Francisco sued us for violating the environmental permit. Does that make sense?

"All of the California Parties' rhetoric has created lots of heat, but has done nothing to keep the lights on in California."