A class action lawsuit in a California court in San Diego County alleging a conspiracy among natural gas suppliers in the state and El Paso Corp. has been set for trial Sept. 7, according to one of the law firms bringing the legal action on behalf of residential and business utility customers. The trial will be aimed at Sempra Energy and its two utilities, since the law firm earlier in the year settled with El Paso.

An attorney with the Los Angeles-based law firm, Engstrom, Lipscomb & Lack, offered further clarification on an announcement it released last Monday concerning the case, noting that the firm is going through the administrative step of giving members of the various classes of consumers the option of pulling out to pursue their own individual legal action. They have until July 20 to do so in this case which was originally certified by the Superior Court in San Diego County as a class action and set for trial last February.

Covering the period of July 1, 2000 through July 31, 2001, the lawsuit alleges that Sempra and its two gas utilities, Southern California Gas Co. and San Diego Gas and Electric Co., “conspired” with El Paso and its subsidiaries “to eliminate competing pipeline projects under development which would have increased supplies of natural gas to Southern California and reduced or averted natural gas shortages and high natural gas and electricity prices throughout California in 2000 and 2001.”

The lawsuit names five classes of plaintiffs: (1) non-core gas customers; (2) core gas customers; (3) electricity customers; (4) direct-access electric customers; and (5) City of Long Beach, CA, municipal gas utility customers.

Although the law firm declined to elaborate on the type of evidence it will present to support its “conspiracy” claim, the formal complaint centered on a Sept. 25, 1996 “secret” meeting that allegedly took place among “the top brass of SoCalGas, SDG&E, and El Paso” at which they allegedly agreed “to refrain from direct competition…allocate between themselves the markets…and preserve the parties’ dominance in their respective markets.” The suit claims that by keeping other potential pipelines from connecting to the California market, the group limited supply to that market, resulting in higher prices.

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