Court Dismisses Calif Claims Against 10 Energy Companies
By JESSICA BERTHOLD
Of DOW JONES NEWSWIRES
LOS ANGELES -- The U.S. District Court of Northern California on Tuesday dismissed charges filed by California's Attorney General that 10 energy firms violated the state's unfair business practices law by overcharging for electricity, a spokesman for Attorney General Bill Lockyer confirmed.
Charges were dismissed for the following companies: Reliant Resources Inc. (RRI), Mirant Corp. (MIR), Royal Dutch/Shell (RD) unit Coral Power, Puget Energy Inc. (PSD), TransAlta Corp. (TAC), UniSource Energy Corp. (UNS) unit Tucson Electric, Idacorp (IDA) unit Idaho Power, Merrill Lynch & Co. Inc. (MER) unit Merrill Lynch Capital and Enron Corp. (ENRNQ) unit Portland General Electric.
Charges against BP PLC (BP) unit BP Energy weren't dismissed, because that company didn't file a motion to dismiss, according to court documents.
The court also dismissed charges of unfair business practices for Reliant, Mirant and Dynegy Inc. (DYN) related to actions in the state's "ancillary services" market. In addition, the court dismissed a damages claim related to antitrust charges against Reliant and Mirant, although it upheld the state's right to pursue divestiture of those companies' assets for potential antitrust violations.
Judge Vaughn Walker dismissed the charges because he determined they should be decided by the Federal Energy Regulatory Commission, which regulates wholesale power rates.
California's Attorney General will appeal Walker's decision at the U.S. Ninth Circuit, said Lockyer spokesman Tom Dressler.
"Nothing in the ruling disputes our factual claims; the judge said only that we should pursue those claims at FERC...We believe we are entitled to our day in court," Dressler said.
The judgment comes just one day before FERC is slated to release its findings of an investigation into whether Western power markets were manipulated during the region's 2000-2001 energy crisis. FERC is also set to rule Wednesday on California's claim for $9 billion in refunds for power overcharges and its request that long-term contracts be void because they were allegedly influenced by unjust and unreasonable spot-market prices.
Lockyer's pursuit of damages under state law may be part of a strategy to get additional settlement money from energy firms in the event that California doesn't get the full $9 billion in refunds, wrote Christine Tezak, energy analyst for Schwab Capital Markets, in a research note March 6.
The judge's decision is "extremely significant," because it confirms that regulation of wholesale power sales and transmission are under federal jurisdiction, said Reliant spokesman Richard Wheatley.
"This decision represents the second time in less than four months that federal courts have ruled that state law claims, such as those filed by California, are pre-empted by federal law and barred by the filed rate doctrine," Wheatley said.
In January, the U.S. District Court of Southern California dismissed a lawsuit against nine energy firms filed by the Snohomish County Public Utility District, which sought monetary damages for power overcharges. In that case, too, the judge said the matter should be decided by FERC.
-By Jessica Berthold, Dow Jones Newswires; 323-658-3872; jessica.berthold@dowjones.com
Updated March 25, 2003 5:09 p.m. |
