In the nation’s leading grape-growing state,California’s largest winery unleashed some definitely sour grapes in a lawsuit filed earlier this month against Calgary-based EnCana, alleging it and its marketing subsidiary conspired to inflate natural gas prices in the state.

E. & J. Gallo, the Modesto, CA-based winery, has bought gas supplies from EnCana and transported them through the Pacific Gas and Electric Co. pipelines to its facilities in the central agricultural valley of California.

“We are aware of the (lawsuit’s) claim and are making a thorough assessment of it,” said EnCana’s Calgary-based spokesperson, Alan Boras. “We believe the allegations are absurd and will vigorously defend against the action, but because this matter is before the courts we will not provide any further comment.”

The lawsuit was filed April 9 in a federal district court for the eastern district of California in Fresno. More generally, Boras would not comment either on whether other wineries or direct access customers in California have taken similar action or disputed past charges for natural gas from EnCana.

Gallo’s legal action alleges that in 2000 EnCana — the product of 2001 merger of PanCanadian Energy and Alberta Energy — conspired with unnamed parties to hike the wholesale gas basis spread between the Nymex Henry Hub contract and the California border price. (Wholesale prices at the California-Arizona border spiked to historically high levels in 2000-2001, and that is the issue of pending investigations before California and federal regulatory commissions.)

Allegedly EnCana and the unnamed co-conspirators drove up the price of bundled natural gas in the state and also engaged in so-called “round-trip” trading schemes. As a result, EnCana and others allegedly caused the basis differential at the California border to shoot up excessively. The winery is asking for triple the amounts of money it alleges to have overpaid for gas during this period, along with all attorneys’ and court fees.

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