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Enron Mail |
Class Action Lawsuits Alleging Restraint of Trade and Unfair Business
Practices Filed Against SoCal Gas, San Diego Gas & Electric, And El Paso Natural Gas LOS ANGELES, Dec. 18 /PRNewswire/ via NewsEdge Corporation - Two related class action lawsuits have been filed in the California Superior Court in Los Angeles, against Southern California Gas Company, San Diego Gas & Electric Company, Sempra Energy (parent of the two utilities), El Paso Natural Gas Co., and other companies related to El Paso Natural Gas. The two lawsuits allege a conspiracy resulting in restraint of trade and unfair competition and unlawful business practices. The complaints summarize the issue as follows: This action involves a massive conspiracy to eliminate competition in the newly deregulated energy industry that has resulted in endangering California's electrical system and threatening California's economy. It is perhaps the largest gouging of energy consumers in American history. Southern California's current "energy crisis" is not simply the result of ever-increasing demand by a growing population for energy. Rather, it is the direct result of a conspiracy among the natural gas industry's most powerful Southern California players to preserve and maintain the market dominance that they enjoyed for many years as monopolies subject to regulation. When the artificial monopoly created by regulation was disassembled, those dominant companies took prompt and illegal action to ensure that they would not lose the benefits of their market power. Their unlawful collusion has contributed significantly to the recent astronomical increases in the price of natural gas and electricity. As a result, Southern California customers have had to pay billions of dollars extra for their natural gas and electric needs. This lawsuit seeks to recover those damages. (Para. 1 and 2 of complaint.) "In September of 1996, top executives of Southern California Gas Company ("SoCal Gas"), San Diego Gas & Electric ("SDG&E") and El Paso Natural Gas Corporation ("EPNG") met at the Embassy Suites Hotel, near Sky Harbor Airport in Phoenix, Arizona. Fearing a new era of open competition and lower prices, these latter day captains of industry gathered secretly to hatch a conspiracy to dominate the unregulated aspects of the natural gas and electricity markets. At the meeting, these three companies, who together dominate the Southern California natural gas market, illegally agreed not to compete against each other in the Southern California and Baja California natural gas delivery markets. They also conspired to prevent other pipelines from being built that would have competed against them and lowered natural gas prices in these markets. The conspirators sought to eliminate competition, take advantage of electric deregulation, drive up the price of natural gas, and profit from the increased prices." (Para 4 of complaint.) One of the two lawsuits addresses the effects of the conspiracy on natural gas prices; the other deals with the effects on electricity prices. (The price of gas-fired generation establishes the price for most of the electricity used in Southern California.) Copies of the two lawsuits filed this morning are available as Adobe Acrobat (PDF) files on the web site of the law firm of O'Donnell and Shaeffer at http://oslaw.com/osnews. Attorneys representing the plaintiffs are available for interviews, and can also provide additional materials, including copies of the agenda prepared for the secret meeting, as well as graphics illustrating the location of natural gas pipelines that were planned, but then terminated by the defendants following the secret meeting in Phoenix. For more information contact: Pierce O'Donnell or Carole E. Handler, O'Donnell & Shaeffer LLP, (213) 532-2000 SOURCE O'Donnell & Shaeffer LLP CONTACT: Pierce O'Donnell or Carole E. Handler of O'Donnell & Shaeffer LLP, 213-532-2000 Web site: http://oslaw.com/osnews E SOURCE Study: Customer-Side Electricity Demand Reduction Could Stem Rising Power Prices BOULDER, Colo., Dec. 18 /PRNewswire/ via NewsEdge Corporation - With electricity prices rising like floodwaters in California and other states, limited generation capacity has garnered the most attention as the culprit. Many see constructing new power plants as the sole solution for bringing prices down. However, E SOURCE research just out of the field indicates that convincing customers to reduce their electricity demand in exchange for cash could provide tremendous price relief in open power markets. "Our study shows that commercial and industrial customers are very willing to reduce demand if the price is right, if mechanisms are in place for communicating those prices, and if they have a means of controlling their electric loads. We found that larger customers could offer almost 20 percent of their load as negawatts -- temporary reductions in electricity demand," says E SOURCE Vice President Bill LeBlanc. Because most electricity use is considered essential and rising wholesale prices don't immediately affect end users, prices can go sky high when power supplies get tight. But if demand dropped in response to high prices, LeBlanc contends that overall power costs would be much lower. He explains, "Although there's a disconnect between price and demand in the marketplace today, we've uncovered a significant subset of customers who seem ready to participate in a dynamic pricing market. Unfortunately, most of them don't yet have the communication and control tools that would make load management possible. They also haven't been offered a pricing product they like." The E SOURCE research study confirms that customers want flexibility in deciding whether to participate in load reductions on a daily or even hourly basis, as just one example. So how many negawatts are available? According to the E SOURCE national market survey, medium-to-large commercial and industrial customers could potentially reduce their demand by 18 percent if offered a market price of $1 per kWh (one of the tested price points) for reduced electricity usage. At this price -- which, incidentally, is what Edison International CEO and President John Bryson reported that his company paid for electricity on December 12 in wholesale power markets -- about 55,000 MW could be made available across the U.S., and about 4,800 MW in California. LeBlanc adds, "We can't expect to capture all of this potential. But with the right product, pricing scheme, and marketing, it would be possible to help relieve price pressure on the whole system." The E SOURCE study, "Energy Pricing and Load Management: What Do End-Users Want?" can help energy service providers design appropriate products and identify the customer groups most likely to participate in such programs. It's based on an extensive research with over 700 energy decision-makers across the U.S. and Canada. For further information about "Energy Pricing and Load Management," please call Bill LeBlanc at 720-548-5476 or Tia Hensler, market research director, at 720-548-5614. SOURCE E SOURCE CONTACT: Bill LeBlanc, 720-548-5476, or Tia Hensler, market research director, 720-548-5614, both for E SOURCE Web site: http://www.esource.com
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