Sierra Pacific Files Lawsuit Against Gas Suppliers

Utility holding company Sierra Pacific Resources Corp. said Monday it had filed a federal lawsuit against major natural gas suppliers, seeking at least $600 million in damages, after the suppliers allegedly conspired to drive up prices.

The Las Vegas-based company said defendants in the suit include El Paso Corp., Sempra Energy and Dynegy Inc.

The lawsuit, filed in U.S. District Court in Las Vegas, alleges restraint of trade, fraud, violation of Nevada’s RICO Act and civil conspiracy.

Houston-based Enron Corp. is named as a co-conspirator but cannot be made a party to the suit because it is in bankruptcy proceedings, the company said.

The lawsuit, filed jointly by Sierra Pacific and its utility subsidiary Nevada Power, contends the defendants planned and executed schemes designed to drive up or control natural gas prices, eliminate competition and increase market volatility.

“Anti-competitive and fraudulent behavior ... not only harmed competition for delivered natural gas, but also produced exorbitant and illegal profits for the defendants,” Sierra Pacific charged in its lawsuit.

Sierra Pacific alleged that between 1996 and 2001, El Paso, Sempra, Dynegy, Enron and their subsidiaries conspired to decrease competition by restricting the amount of pipeline capacity and fuel available to Nevada Power and others.

Peter Hidalgo, a spokesman for Sempra unit Southern California Gas Co., a defendant in the lawsuit along with its parent, said the complaint “overlooks critical facts, relies on false speculation and in our opinion has absolutely no merit.”

A spokesman for Dynegy said the company was reviewing the complaint while El Paso representatives were not immediately available for comment.

Similar allegations have been made in several other lawsuits.

Last month El Paso reached a provisional $1.7-billion settlement with California stemming from alleged manipulation of the natural gas market.