Sempra, Gas Firms Sued Over Pricing

San Diego-based Sempra Energy, owner of the largest U.S. natural gas utility, and several other natural gas companies engaged in a concerted scheme to overcharge consumers, according to lawsuits filed Thursday by the city and county of San Francisco and, separately, by Santa Clara County.

The lawsuits, filed in San Diego County Superior Court, contend that a group of natural gas producers, marketers, traders, transporters and sellers artificially drove up California’s natural gas rates to about six times the national average during the state’s energy crisis in 2000-01.

The companies did this, the lawsuits contend, by reporting false sales to trade publications that publish energy price indexes used widely within the industry in writing contracts for longer-term gas sales.

“It is clear that the illegal actions of the gas sellers and traders artificially increased the price of gas for millions of California consumers as well as for public entities like San Francisco,” said San Francisco City Atty. Dennis Herrera.

In addition to Sempra, the companies named in the lawsuits are its two utility units, San Diego Gas & Electric Co. and Southern California Gas Co.; Reliant Energy; CenterPoint Energy; Coral Energy; WD Energy Services Inc., the U.S.-based trading unit of EnCana Corp.; Aquila Inc.; CMS Energy; and Cantera Gas Co.

Representatives for the companies were either unavailable or declined to comment.

Bloomberg News and Reuters were used in compiling this report.