Utility Suit on Energy Prices Is Dismissed

A federal judge in San Diego has dismissed a class-action lawsuit brought by a Washington state utility, which charged that energy firms colluded to create artificially high electricity prices.

U.S. District Judge Robert H. Whaley said in his order Monday that the complaint by Snohomish Public Utility District belonged in front of the Federal Energy Regulatory Commission, not a court. Snohomish also has filed complaints to FERC, which regulates wholesale power prices.

Whaley’s decision means that Mirant Corp., Williams Cos. and seven other energy firms named in the suit also may be able to get other claims dismissed, including those filed in San Francisco by California officials and consumers.

The dismissal of the lawsuit is important because it “reaffirms the jurisdiction of FERC in its rate-making authority and oversight of how rates are set in the wholesale market,” said Richard Wheatley, spokesman for defendant Reliant Energy Inc., which recently changed its name to CenterPoint Energy Inc.

Williams spokeswoman Kelly Swan said the company is “pleased with the ruling.”

Williams, the No. 2 U.S. natural-gas pipeline owner, had settled its power-contract disputes with California, ending the threat of lawsuits from the state. The states of Washington and Oregon, as well as a number of municipalities, also agreed to drop their complaints against the company.

The suit dismissed Monday was one of several complaints involving the California wholesale electricity market that were granted class-action status.

Attorneys for Snohomish argued that the energy firms manipulated the wholesale market to drive up rates, forcing the utility to “pay prices for electricity in excess of rates that would have been achieved by competitive market.” The Washington utility claimed that the companies violated California’s antitrust and unfair competition laws.

FERC is considering similar cases, including two filed by the utility, Whaley noted in his order.

Snohomish officials could not be reached for comment.

Bloomberg News was used in compiling this report.