By Harry Gibbons
The Canadian-owned firm Powerex has agreed to the settlement with the state of California and power companies.
Frank Lindh is with the California Public Utilities Commission. He says Powerex was accused of engaging in energy market manipulation similar to that of Enron.
"The initial charges really boil down to overcharging for electricity. Charging way high prices for electricity that Powerex was able to obtain very cheaply from British Columbia. So they buy low and sell high, and we want the difference," said Lindh.
The company admits no wrongdoing, but faced a potential $3.2 billion liability if the case had gone to court.
Public utilities will receive most of the settlement money, with PG&E being awarded $300 million. The money will be passed on to ratepayers in the form of discounts.