<PAGE>

                                                                    EXHIBIT 99.3

                                                     [DEPARTMENT OF ENERGY LOGO]

                                 Final Report on
                               Price Manipulation
                               in Western Markets

                             Docket No. PA02-02-000
                                Donald J. Gelinas
                            Associate Director - OMTR
                      Federal Energy Regulatory Commission
                                 March 26, 2003

<PAGE>

                                                     [DEPARTMENT OF ENERGY LOGO]

                                  Introduction

o    On February 13, 2002 the Commission ordered a Staff investigation into the
     potential manipulation of electricity and natural gas prices.

o    Staff found evidence of manipulation of both electricity and natural gas
     markets.

o    Staff proposes a series of generic and company-specific remedies for the
     market flaws and abuse found in the Investigation.

                                                                               2

<PAGE>

                                                     [DEPARTMENT OF ENERGY LOGO]


                                      GAS

o    Spot gas prices at the California border reflected extraordinary basis
     differentials that far exceeded the cost of transportation

o    Dysfunctions in the natural gas market fed off misconduct, including gas
     transaction misreporting and wash trading

o    There was a misperception that the Topock delivery point was a liquid
     market

o    In fact, a single trader at Topock/1/ engaged in rapid-fire trading for
     volumes many times the company's needs

o    That single trader's actions led to an increase in the daily average price
     of gas of $8.54/MMBtu in December 2000

--------------------
1.   This reference is to an employee of a subsidiary of Reliant Resources, Inc.

                                                                               3

<PAGE>

                                                     [DEPARTMENT OF ENERGY LOGO]


GAS

o    Market participants attempted to manipulate published price indices through
     epidemic false reporting

o    Spot gas prices were not the product of a well-functioning competitive
     market

o    Spot gas prices for the California Refund Proceeding therefore should be
     replaced. Staff recommends producing-area prices plus transportation for
     setting the clearing price, thereby reducing gas costs by $7.03 in southern
     California and $4.18 in northern California, or about $5.60 on average over
     the 9 month refund period

o    Generators should be able to recover their costs on a dollar-for-dollar
     basis, but the California gas indices should not be use to set the
     market-clearing price.

                                                                               4

<PAGE>

                                                     [DEPARTMENT OF ENERGY LOGO]


ELECTRIC

o    The Cal ISO's and Cal PX's filed tariffs have contained anti-gaming
     provisions since the Cal ISO's Operations Date

o    These provisions identify various abuses and misconduct, such as taking
     unfair advantage of market rules, excessive pricing or bidding, and
     behavior that is not consistent with competitive markets and provide for
     the imposition of sanctions and penalties

o    The Enron trading strategies, economic withholding, and inflated bidding
     all violate the Cal ISO and Cal PX tariffs' anti-gaming provisions

o    Staff recommends the issuance of a number of show cause orders to determine
     the appropriate remedies for such violations

                                                                               5

<PAGE>

                                                     [DEPARTMENT OF ENERGY LOGO]


ELECTRIC

o    Staff recommends that over 30 entities be directed to show cause why their
     behavior did not constitute gaming or other anomalous market behavior in
     violation of the Cal ISO and/or Cal PX tariffs and why they should not
     disgorge any unjust enrichment related to their misconduct

o    These companies include AEP, Aquila, Avista, BPA, Coral Power, Duke,
     Dynegy, Enron, Idaho Power, LADWP, Mirant, PG&E, PacifiCorp, Portland
     General, Powerex, Reliant, Sempra, Sierra Pacific, Southern California
     Edison, and Williams

                                                                               6

<PAGE>

                                                     [DEPARTMENT OF ENERGY LOGO]


ELECTRIC

o    Staff recommends that Reliant Energy Services and BP Energy be directed to
     show cause why their market-based rate authority should not be revoked in
     light of their apparent manipulation of electricity prices at the Palo
     Verde trading hub

o    Staff recommends that Enron be directed to show cause why its power
     marketers' market-based rate authority and its gas marketers' blanket
     marketing certificate should not be revoked in light of Enron's numerous
     apparent instances of gaming, manipulation of gas prices, and failure to
     disclose changes in market share

                                                                               7

<PAGE>

                                                     [DEPARTMENT OF ENERGY LOGO]


ELECTRIC

o    Staff recommends that certain sellers in the California spot markets be
     directed to show cause why their bidding behavior did not constitute
     economic withholding and inflated bidding in violation of the Cal PX's and
     Cal ISO's tariffs and why they should not disgorge any unjust enrichment
     related to their misconduct

o    These companies are Enron, BPA, Dynegy, Idaho Power, LADWP, Mirant,
     PowerEx, Reliant and Williams

                                                                               8

<PAGE>

                                                     [DEPARTMENT OF ENERGY LOGO]


ELECTRIC

Western Long-Term Contracts

o    Market Dysfunction in California short-term markets affected long-term
     contracts

o    Analysis shows that spot power prices correlate with long-term contract
     prices, especially 1-2 year contracts

o    Spot prices in the Northwest during January-June costs 2001 appear
     considerably out of line with input costs

o    Staff recommends using the analysis in the Report to inform ongoing
     long-term contract proceedings and other complaints that long-term
     contracts are not J&R.

                                                                               9

<PAGE>

                                                     [DEPARTMENT OF ENERGY LOGO]


Other Staff Recommendations

o    Amend Sections 284.284 and 284.402 of the regulations to provide explicit
     guidelines or prohibitions for trading natural gas under Commission blanket
     certificates.

o    Consider a generic proceeding to develop appropriate reporting and
     monitoring requirements for sellers of natural gas under the Commission's
     blanket certificates.

o    Condition all electric market-based rates and natural gas blanket marketing
     certificates on the companies providing complete, accurate, and honest
     information to any entity that publishes the price indices.

                                                                              10

<PAGE>

                                                     [DEPARTMENT OF ENERGY LOGO]

Other Staff Recommendations

Natural Gas and Electricity Price Indices:

o    Require that only actual trade data be used to construct the price indices.

o    Require that data sent to firms publishing price indices be provided by the
     risk management office of the company, not the trading desk or a trader,
     and be certified by the chief risk officer.

o    Encourage standard product definitions for published natural gas and
     electricity price indices and standard methodologies for calculating the
     price indices.

                                                                              11

<PAGE>

                                                     [DEPARTMENT OF ENERGY LOGO]

Other Staff Recommendations

o    Require Dynegy, Aquila, AEP, El Paso Merchant Energy, Williams, Reliant,
     Duke, Mirant, Coral, CMS, and Sempra Energy Trading to demonstrate that
     they have ceased selling natural gas at wholesale or that:

o    Those employees, including trading desk heads and managers, who
     participated in manipulations or attempted manipulations of the published
     price indices have been disciplined

o    The company has a clear code of conduct in place for reporting price
     information

o    All trade data reporting is done by an entity within the company that does
     not have a financial interest in the published index (preferably the chief
     risk officer)

o    The company is cooperating fully with any government agency investigating
     its past price reporting practices

                                                                              12

<PAGE>

                                                     [DEPARTMENT OF ENERGY LOGO]


Other Staff Recommendations

Wash Trading, Monitoring and Record Keeping

o    Establish specific rules banning any form of prearranged wash trading and
     prohibiting the reporting of any affiliate trading activities through
     industry indices.

o    Condition blanket gas marketing certificates, as well as electric
     market-based rates, to require that sellers who use trading platforms use
     only those trading platforms that agree to provide the Commission with full
     access to trade reporting and order book information for the trading
     systems and agree to adhere to appropriate monitoring requirements.

                                                                              13

<PAGE>

                                                     [DEPARTMENT OF ENERGY LOGO]


Team Members

Don Gelinas, Team Lead
John Delaware, Deputy Team Lead

        FERC Staff                              Outside Consultants
        ----------                              -------------------
        Rich Armstrong                          Matt Barmack
        Bill Booth                              Hank Bessembinder.
        Bob Flanders                            Edward Kahn
        David Hunger                            Robert Pindyck
        John Kroeger                            Michael Quinn
        Eugene Lee                              Chester Spatt
        Peter Simonyi                           Analysis Group/Economics
        Tim Smith                               Aspen Systems Corp
        Marlene Stein

                                                                              14