---------------------- Forwarded by Jennifer Rudolph/HOU/EES on 11/30/2000 
12:35 PM ---------------------------
   Elizabeth Peters                11/30/2000 12:07 PM

To: Jennifer Rudolph/HOU/EES@EES
cc:  
Subject: EES Articles: USA: Calif. energy companies face San Diego lawsuit.

Per the conference call, here is a wire article on the lawsuit for 
origination.  Thanks.
Beth
---------------------- Forwarded by Elizabeth Peters/HOU/EES on 11/30/2000 
12:07 PM ---------------------------


djcustomclips@djinteractive.com on 11/29/2000 06:34:07 PM
Please respond to nobody@mail1.djnr.com
To: 233037@mailman.enron.com
cc:  
Subject: EES Articles: USA: Calif. energy companies face San Diego lawsuit.


USA:
Calif. energy companies face San Diego lawsuit.

11/29/2000
Reuters English News Service
(C) Reuters Limited 2000.

SAN DIEGO, Nov 29 (Reuters) - A class action lawsuit filed Wednesday in San
Diego charges 14 energy companies with deliberate manipulation of prices in
California's electricity market.

The suit, filed by an anti-trust legal consortium on behalf of San Diego Gas
and Electric (SDG&E) customers, also seeks to recover at least $1 billion in
what they called overpayments to the utility, a subsidiary of Sempra Energy .
San Diego power prices nearly tripled this summer as the city's ratepayers
became the first in the state to feel the full effect of a deregulated power
market just as that market ran extremely low on power supplies.

"This is a consumer class action suit designed to get our money back,"
explained Michael Shames, head of UCAN, the Utilities Consumers Action
Network.

UCAN, though not a party to the suit, has joined a team of academics assisting
the suit's legal team as they try to prove price collusion among players in
the California energy market.

" defendants unlawfully manipulated the market for electric energy by fixing
prices and restricting supply into the markets operated by the California
Power Exchange and the California Independent System Operator," according to
the complaint.

The complaint further accuses the companies of "conspiring to illegally obtain
and trade information relating to energy supply, pricing and demand and
combining to raise the 'market clearing bid' for electric energy on the
wholesale markets."

The suit is the latest twist in a flurry of legal, legislative and regulatory
activity following a summer that saw California electricity prices soar amid
an unprecedented series of power shortages.

A growing population and strong economy have pushed power demand sharply
higher in California, while almost no new power plants have been built in the
state during the past decade.

The state's decision in 1996 to deregulate its electricity sector assumed open
competition would result in lower power bills. Instead, supplies have failed
to keep pace with demand and power prices have soared, prompting a public
outcry.

In addition to SDG&E, the suit filed today in San Diego targets companies that
sold energy to SDG&E.

Among those are Enron Energy Services, a unit of Enron Corp. , PG&E Corp unit
Pacific Gas and Electric, Duke Energy , Reliant Energy , Williams Cos Inc unit
Williams Energy Marketing and Trading and NRG Energy Inc. .

Mark Palmer, spokesman for industry giant Enron, said the lawsuit was without
merit.

"Three separate independent government regulatory agencies have investigated
these allegations and found none to be true...The problems with the California
market have to do with flawed market structure," he said.

"This lawsuit is an attempt to fix blame rather than fix the problem," Palmer
added.

The suit also charges a number of scheduling coordinators, people who schedule
the delivery of electricity over the power grid, as co-conspirators.

The Federal Energy Regulatory Commission earlier this month branded the
chaotic California power market "flawed" and proposed changes aimed at
restoring some stability to retail and wholesale prices. FERC commissioners
did not, however, accuse any of the market's players of collusion.

California governor Gray Davis is set to present his own list of remedies for
the state's ailing power market on Friday.



Folder Name: EES Articles
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