Sempra Appeals Ruling in Gas Price-Gouging Suit

San Diego Gas & Electric and Southern California Gas have appealed a court ruling allowing a case that alleges the utilities conspired to raise natural gas prices during the energy crisis to proceed. The October 15 appeal came after San Diego Superior Court judge Richard Haden denied the utilities? request for summary judgment on claims seeking up to $27 billion, thus setting the matter for trial. ?After four years of the Sempra defendants desperately trying to avoid the day of reckoning, we are eager to have a jury,? said Thomas Girardi, plaintiffs? attorney with Girardi & Keese. Plaintiffs in the case, Continental Forge v. SoCal Gas, include California, the city and county of Los Angeles, and San Bernardino County, among others. Girardi called the Sempra utilities? alleged behavior ?greedy.? ?The filings in this case make it clear that there is no factual basis for the plaintiffs? claims,? stated Javade Chaudhri, Sempra executive vice president and general counsel. The saga began September 25, 1996, in an ordinary airport motel near the Sky Harbor Airport in Phoenix, Arizona. There, El Paso and Sempra management?supposedly including the then-president and chief executive officer of SoCal Gas?allegedly schemed to prevent construction or expansion of competitive pipelines, restricting the availability of capacity on the El Paso pipeline. The lack of competition, termed a ?conspiracy? in court briefs, is blamed for ?extreme? gas prices during the energy crisis. (El Paso settled these claims as part of its $1.5 billion deal with the state and the Federal Energy Regulatory Commission in June 2003.) The Phoenix meeting allegedly set up cooperation between El Paso and SoCal Gas that would benefit both corporations while shielding them from competing with each other. SoCal?s merger with San Diego Gas & Electric, creating the parent company Sempra, was executed in the same time period in which El Paso acquired Tenneco. Leading up to electricity deregulation in 1998, the California Public Utilities Commission had opened the gates to wholesale gas competition. Pipelines were brought in and laterals proposed. Tenneco built the Kern River line in 1992, running from Wyoming to Kern County. The company had more plans for pipes in Southern California and service to Mexico; another Tenneco pipeline was envisioned to extend into Canada. But after the merger with El Paso, Tenneco?s competitive projects were no longer considered, according to court documents. Though most of the general allegations of price manipulation and conspiracy have been laid to rest through either attrition or settlement, the case remains active. The Sempra utilities expect a ruling on their appeal within the next two months. If it fails, trial proceedings are expected to begin early next year. Case No. JCCP 4221 et al.

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Sempra Appeals Ruling in Gas Price-Gouging Suit

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