El Paso Electric Raises Calif. Settlement by $1.5 Million
El Paso Electric Co. agreed to pay an additional $1.5 million to resolve allegations that it conspired with Enron Corp. to manipulate power prices during California’s energy crisis.
The company, which announced in December that it would pay $14 million to the state, said it increased the settlement to $15.5 million to avoid litigation. The money would go to the state’s electric power fund, which is used to pay off bonds sold by California to finance wholesale energy purchases.
“Our willingness to settle is a function of what it would take to defend ourselves,” Chief Executive Gary R. Hedrick said in an interview. “We continue to deny involvement in any illegal or improper activity.”
The settlement, which is subject to approval by the Federal Energy Regulatory Commission, would resolve allegations that El Paso Electric let Enron run its transmission system under a plan to inflate power prices. The settlement stems from a FERC investigation into El Paso Electric’s trading practices on the West Coast in 2000 and 2001.
The El Paso-based company isn’t affiliated with El Paso Corp., a natural gas pipeline operator.
El Paso Electric shares fell 5 cents to close at $10.65 on the New York Stock Exchange.
