Former Lawmaker Fingers Federal Agencies and LADWP in Class-Action Suit on 
Price Gouging Sept 11 (California Energy Markets) 
Larry Stirling, a candidate for the California state Senate seat now occupied 
by Senator Dede Alpert (D-Coronado), has filed a federal lawsuit against 
nearly everyone under the sun, alleging that hydro-electricity from federal 
power agencies was illegally marked up and resold into California at illegal 
and excessive rates. Stirling, a former state legislator in both the Assembly 
and the Senate from 1980 to 1989, has been a judge at the Superior Court 
level since 1989. 
The suit, filed August 31 in Federal District Court for Southern California, 
names a variety of defendants--including Secretary of Energy Bill Richardson, 
the Western Area Power Administration, the Bonneville Power Administration, 
the Los Angeles Department of Water & Power, San Diego Gas & Electric, the 
California Power Exchange, the California Independent System Operator and a 
host of unidentified "John Doe" individuals deemed responsible for the 
situation [Stirling et al. v. Richardson et al.; CU1745-W-NLS]. However, the 
suit specifically alleges that LADWP engaged in price gouging by purchasing 
federal power and reselling it to the CalPX and Cal-ISO at higher prices. 
In particular, Stirling's complaint cites Federal Code 16 USC Section 825s, 
"which provides that Secretary of Energy shall transmit and dispose of excess 
power and energy in such manner as to encourage the most widespread use 
thereof at the lowest possible rates to consumers." 
The case was filed as a class action, putting the number of plaintiffs at 
more than one million--essentially all consumers of electricity in SDG&E 
territory--and seeks damages that might include a refund of power prices 
charged this past summer. 
Richard Wildman, a San Diego attorney who represents Stirling, told 
CALIFORNIA ENERGY MARKETS, "What we reasonably hope to accomplish is to have 
the parties agree that the purpose of the federal code section is that 
consumers receive this low-cost energy." He said that LADWP was specifically 
identified in the suit because it is "sending power through the grid and 
making substantial profit off this energy." 
While LADWP does not deny doing well in wholesale energy transactions this 
summer, it rejects allegations of wrongdoing. Stan Snyder, assistant Los 
Angeles city attorney, this week responded that the suit "frivolously" named 
LADWP as a defendant. "The department does not sell federal hydro," Snyder 
told CEM. 
Even if the department purchased energy from WAPA or BPA, it would not be 
selling the same energy at wholesale. "Hydro is reserved for consumers in Los 
Angeles. The department sells excess coal and gas power. We always keep 
cheaper power in the basin to sell excess power," Snyder said. He cited the 
department's own Haynes, Scattergood and Valley gas-fired plants, the Mohave 
and Intermountain coal projects and the Castaic pumped-hydro facility as 
possible sources of excess power sold into CalPX and Cal-ISO markets. 
There is no prohibition against reselling of federal power, although it is 
unlikely that any California entity could make a profit off repackaging BPA 
surplus energy, which, when available, is usually indexed to the CalPX import 
price. In addition, BPA said it was unaware of any long-term contract to sell 
to LADWP. "I think they are confusing us with WAPA," BPA spokesperson Perry 
Gruber said. 
Stirling's "facts do not support the lawsuit," LA's Snyder said, and the 
official response from the city puts Stirling on notice that if he pursues 
the case, he could be liable for sanctions. 
Stirling has been making energy price hikes part of his campaign for Alpert's 
seat in the California Senate. Alpert is a coauthor of recently signed 
legislation to cap SDG&E retail bills (see story at [17]). In a position 
statement on his Web site, Stirling said Alpert and other Democrats "voted to 
butcher our power-supply system," putting San Diego consumers "at the mercy 
of every producer including the venal conduct of our neighbor to the north, 
Los Angeles Water and Power Department [sic] that is profiting mightily at 
our distress along with the Federal Western Area Power Administration." 
Stirling railed against federal power agencies and state regulators alike for 
the mess. "Were there no California Public Utilities Commission and no 
federal government WAPA controlling federal hydropower and no California 
State Energy Commission, there would have long since been an adequate supply 
ofreasonably priced energy available to the people of San Diego," he wrote 
[Arthur O'Donnell].