Judge Orders Sempra to Stand Trial

A California judge ordered Sempra Energy, owner of the largest U.S. natural gas utility, to stand trial in a lawsuit seeking as much as $24 billion for alleged market manipulation during California’s power crisis in 2000 and 2001.

San Diego County Superior Court Judge J. Richard Haden denied a request by Sempra and two of its units, Southern California Gas Co. and San Diego Gas & Electric, to dismiss the case. Sempra has appealed the ruling, said Denise King, a spokeswoman for the utilities.

The suit, filed in 2000 by California and various cities and consumers, claims that Sempra conspired with El Paso Corp. to block competition for cheaper Canadian natural gas. El Paso settled claims against it for about $1.7 billion. The plaintiffs estimate that Sempra owes them about $9 billion, which could be tripled under state law, after giving credit for El Paso’s payment.

“Plaintiffs have proffered substantial evidence that” Sempra’s “gas acquisition committee did in fact manipulate gas storage and hub services during the gas crisis in 2000-2001, thereby increasing gas prices in California and creating enormous profits for Sempra,” Haden wrote in a decision last month.

San Diego Gas & Electric and Southern California Gas are “extremely disappointed” with the judge’s ruling, King said. Sempra and the utilities Friday sought an expedited appeal, arguing that the lawsuit “rests on inferences contradicted by the hard evidence” and that the ruling is “legally incorrect,” King said.

The case is set for a jury trial early next year.

Shares of San Diego-based Sempra fell $3.19 Monday to $33.15 on the New York Stock Exchange.