Several California parties, including state regulators and Attorney General Bill Lockyer, have decided not to pursue a subpoena for documents from El Paso Corp. after the two sides reached an agreement, according to a FERC judge.

The California parties withdrew their motion for the subpoena late Monday, said Administrative Law Judge H. Peter Young, and informed him that they had come to an agreement with El Paso. But they did not offer “any particulars” about the deal, he told Daily GPI.

The parties “will be provided documents” from El Paso in exchange for backing away from the subpoena, said Lockyer spokesman Tom Dresslar, but he would not identify the types of documents to be furnished. “I can’t comment beyond that.”

El Paso “struck an agreement with the parties to the California refund proceedings to withdraw their subpoena, and El Paso will withdraw its motion to quash,” confirmed company spokesman Mel Scott, but he also declined to comment further.

Young was scheduled to hear arguments Tuesday on whether to toss out the subpoena ordering El Paso to furnish documents on its deceptive price reporting activities to the California parties to support their claim for power refunds. The Houston-based energy company, which is not a party to the refund proceeding, had filed a motion last week to crush the subpoena and all other efforts to conduct discovery of its natural gas trading records, and to make a “special appearance” before the judge to argue its case. El Paso had said the California parties were barking up the wrong tree, because the information they were seeking had no relation to California prices.

Young, who issued the subpoena to the California parties on Jan. 17, agreed to allow El Paso to challenge the subpoena at the scheduled Tuesday hearing. In the meantime, he ordered the California parties to make a “good faith effort to resolve or limit the issues” in the case.

The California Public Utilities Commission, Lockyer, the California Electricity Oversight Board and two state public utilities sought the subpoena to gain access to information about El Paso’s gas trades as part of an ongoing proceeding at FERC into alleged market exploitation. They are trying to prove the state’s wholesale power market was manipulated in 2000 and 2001, and that billions of dollars in refunds are owed to electric customers there [EL00-95-069].

The parties view information about El Paso’s reporting of false prices for gas trades as critical to their effort to win refunds for electricity customers, given that the bulk of the power in the state is generated from natural gas. High gas prices, whether due to manipulation or competitive factors, inevitably lead to increases in electricity prices.

In a related development Monday, the California parties asked Young to issue a subpoena ordering Las Vegas Cogeneration Limited Partnership to turn over any “documentary evidence” of market manipulation in its possession. The “information in Las Vegas Cogen’s possession or control is highly material to the issue of whether or not sellers manipulated California’s energy markets,” they said in seeking the subpoena.

Although Las Vegas Cogen is not a party to the refund proceeding, it has been identified by FERC staff as being closely allied with Enron Corp. in the western power markets, according to the parties.

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