Mirroring similar action he took last summer in the face ofskyrocketing wholesale power prices, California Gov. Gray Davis onFriday asked his state attorney general to investigate the recentsevere spike in wholesale natural gas prices at the Californiaborder, where prices are among the highest in the nation. In aseparate action, two class action lawsuits were filed Monday inCalifornia Superior Court, alleging that gas and electricity pricespikes are the result of a four-year-old “conspiracy” by SouthernCalifornia Gas, San Diego Gas and Electric and El Paso Natural Gas.(see separate story)

The governor said he wanted Attorney General Bill Lockyer toexamine “anti-competitive practices” among natural gas suppliers tothe state, “including transportation of gas to the Californiaborder,” to determine if any state or federal laws have beenbroken. “I am further requesting that you determine whether civilor criminal remedies are available for consumers who have beenharmed, and whether and how the state can pursue those remedies,”Gov. Davis said in a prepared statement.

“Current spot market prices are neither competitive noraffordable. They threaten key sectors of California’s economy.”

The California Public Utilities Commission has a complaintbefore federal regulators regarding El Paso Natural Gas’relationship with its marketing affiliate, El Paso Merchant Energy,in influencing California-Arizona border gas prices. With increasedconcerns expressed by gas-dependent industries in the state, theissue of natural gas prices is now sharing the front-page spotlightwith electricity supply/price concerns.

An electricity investigation by California’s attorney general isstill ongoing, although no evidence of illegal actions bymarketers/generators has been uncovered. Nevertheless, in reactingstrongly against the Federal Energy Regulatory Commissionelectricity order last Friday, Gov. Davis said the federalregulators’ action will “ensure unconscionable profits for thepirate generators and power brokers who are gouging Californiaconsumers and businesses.”

Davis called for the ongoing electricity investigation to beexpanded to include “civil and criminal violations that may haveoccurred in relation to operations practices of the generators andthe pricing of natural gas,” including coordination with federalauthorities to see if there have been violations of the RICO(Racketeering Influenced and Corrupt Organization) Act.

The governor called FERC “pawns of generators and power sellers”and ordered a special session of the state legislature that willrun concurrently with the session that starts early next month todo some of the things that he said FERC failed to do, including: