Continental Forge v. Sempra Case Settled, Again

By Published On: October 20, 2006

A case that alleged that executives from Sempra utilities conspired to manipulate the price of natural gas during the energy crisis during a meeting in a Phoenix airport hotel room reached a settlement with state plaintiffs for $5.7 million. The October 13 settlement with the California attorney general and the California Public Utilities Commission appears to end litigation in which plaintiffs sought more than $20 billion. The deal also includes the option of buying a power plant with a value of more than $100 million. And it requires Sempra to provide more public information about affiliate interactions. Sempra and some of the original class-action plaintiffs agreed last April to a settlement for $377 million. Plaintiffs claimed that executives from SoCal Gas and El Paso conspired to raise the price of gas delivered to power plants in the state. In turn, that allegedly led to higher electricity prices. The attorney general objected to that settlement, fearing it would knock out the state’s pending claims. The state insisted on blocking the settlement until it was assured that its rights to pursue its own claims in the same vein were not infringed (Circuit, April 14, 2006). This settlement does not interfere with the April settlement, according to the court. Approved by San Diego Superior Court judge Ronald Prager, the settlement includes an option for SDG&E to acquire at book value the 480 MW El Dorado power plant in Boulder City, Nevada. The plant’s power flows into SP15 through Southern California Edison territory and to SDG&E via the high-voltage line connected to the San Onofre nuke, according to Art Larson, Sempra spokesperson. It is “in the best interests of ratepayers,” noted the judge. As part of the new settlement, in addition to the option to buy the Nevada power plant, Sempra will pay SDG&E $236,793 a month for two years to offset costs of that utility’s electricity procurement. – J.A. Savage

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