Sempra Fined for Overcharges

An arbitration panel has ruled that Sempra Energy must pay more than $70 million in damages to the state for overcharges on electricity deliveries and other violations of a 2001 contract signed at the end of the energy crisis, the California Department of Water Resources said Friday.

The panel of retired judges found that San Diego-based Sempra, parent of Southern California Gas Co. and San Diego Gas & Electric Co., included improper charges in invoices for electricity sold to the state as part of the $6.6-billion, 10-year contract. The company also failed to follow through on commitments to deliver energy and sent power to parts of the California electricity grid that the utility knew were too congested for timely deliveries to consumers, the department said.

“This is an important win for California and electricity ratepayers who have had to absorb the unfair high cost from energy companies like Sempra. Sempra’s performance has been less than admirable,” said Nancy Saracino, the department’s deputy director.

Besides assessing damages, the panel prohibited Sempra from overcharging for power for the duration of the contract, saving money for customers of the state’s three investor-owned utilities, Southern California Edison Co., Pacific Gas & Electric Co. and SDG&E;, the department said.

Sempra spokesman Art Larson said his company was pleased with the decision. “The panel upheld our contract and for the most part accepted our interpretation,” he said.