Sempra Energy Reaches Settlement In Energy Crisis Lawsuits
Wednesday, April 28, 2010
San Diego-based Sempra Energy settled lawsuits arising out of the energy crisis of 2000-01, which will lower the bills of consumers by a combined $400 million. The settlement involves Sempra Generation and Sempra Commodities. Sempra is also the parent company of San Diego Gas & Electric and the Southern California Gas Co.
The announcement was made Wednesday by Gov. Arnold Schwarzenegger, state Attorney General Jerry Brown and Michael Peevey, president of the California Public Utilities Commission.
State officials said Sempra subsidiaries involved in power generation and trading were engaged in the wholesale energy market when prices spiked to record levels. California Attorney General Jerry Brown says Sempra, Enron and other companies created phony energy shortages, blackouts and record high prices during the energy crisis a decade ago.
Sempra spokesman Doug Kline said the company admitted no wrongdoing as part of the settlement deal.
"We're focused on putting these matters behind us and spending our time and resources on providing energy to our customers," said Kline.
Chairman and CEO of Sempra Donald Felsinger echoed Kline's comments. "We are pleased to put this litigation behind us," said Felsinger. "We believe this is a fair and reasonable outcome for both our shareholders and the state of California."
Together with a 2005 agreement, Sempra will pay $700 million to settle energy crisis lawsuits.
Schwarzenegger said his administration has negotiated $3.2 billion in settlements from various energy companies.
"The people of California deserve affordable and reliable energy supplies," Schwarzenegger said. "I will continue to fight to ensure lower prices for residents and businesses across California as we move forward with important policies."
Attorney General Brown says consumers continue to pay for the energy crisis through a line item on their bills labeled "DWR bond charge."
The settlement is expected to help reduce those costs to customers throughout the state. According to Peevey, customers of Southern California Edison and Pacific Gas and Electric will also have bills lowered as part of the settlement.
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