The 5th U.S. Circuit Court of Appeals in New Orleans has ruled that Enron Corp. shareholders may not proceed with a class action lawsuit against the company’s former investment banks for their alleged role in the accounting fraud that destroyed the company. The appeals court’s ruling reverses a decision by U.S. District Judge Melinda Harmon in Houston. Harmon approved the original class action lawsuit by the shareholders, and she then expanded it in January, allowing 30 state attorneys general to join the case (see NGI, Jan. 15). The 5th Circuit opinion read in part, “As we have recognized, class certification may be the backbreaking decision that places ‘insurmountable pressure’ on a defendant to settle, even when the defendant has a good chance of succeeding on the merits.” William Lerach, one of the shareholders’ attorneys, said the legal team likely will appeal the ruling “as quickly as possible.”
A unit of Williams is holding a nonbinding open season until May 23 for a project to enhance Eminence Storage service on its Transco pipeline. The Eminence gas storage facility is in Covington County, MS. New service from the Eminence Storage Service Enhancement Project is anticipated to be available as early as fall 2009, subject to approval by the Federal Energy Regulatory Commission. Plans for the project involve adding horsepower to increase injection capability. The existing storage facility has 15 Bcf of capacity, providing customers with up to two injection/withdrawal cycles per year. The enhancement project is designed to allow customers to use up to six injection/withdrawal cycles annually. Capital cost of the project will be determined based on the results of the open season. For customer inquiries, contact Toi Anderson at (713) 215-4540 or Nancy Hargrove at (713) 215-2926.
A former energy trading supervisor for Western Gas Resources Inc. has been ordered to pay a $60,000 civil penalty to settle charges that he attempted to manipulate natural gas prices in 2000 and 2001, according to the Commodity Futures Trading Commission (CFTC). In a consent order issued last week, U.S. District Judge Phillip S. Figa required Andrew K. Richmond of Superior, CO, to pay the penalty, and it permanently prohibits him from applying for registration, engaging in any activity requiring registration, or acting as a principal as defined by the National Futures Association, and from directly or indirectly trading on or subject to the rules of any registered entity. The consent order arose from a CFTC lawsuit filed on April 12, 2005, which found that between April 2000 and February 2001, Richmond pressured traders he supervised to submit false gas trading information, including fabricated price and volume information, to Platts Gas Daily in order to benefit certain positions held by Western Gas (see NGI, April 18, 2005). In addition, the consent order found that at least two traders that Richmond supervised submitted false trade information to Gas Daily. In 2004, Western Gas agreed to pay a civil penalty of $7 million in a settlement with the CFTC over charges of attempted manipulation and reporting of false information by traders on gas transactions in the 1999-2002 time period (see NGI, July 5, 2004). “Previous investigations such as this one have shed light on published cash commodity indexes that are used as vehicles of price discovery,” said CFTC’s Gregory Mocek, director of enforcement. “Traders should not take comfort over the fact that such indexes are unregulated on a day-to-day basis because supplying bogus information to an index compiler is ultimately a violation of federal law that we will pursue.”
California-based energy service provider Commerce Energy Group said it is rebranding its basic natural gas and electric retail offerings as “Smart Choice” to stimulate interest in switching energy providers among consumers. The hope is that the rebranding will encourage growth in “innovative energy programs and consumer education,” the company said. In January, the Costa Mesa, CA-based company launched its clean energy products offering under the name “Clear Choice,” offering 100% or 50% wind-generated electricity to residential and small business consumers in Texas and Maryland “The rebranding of our traditional energy service plans links both traditional and clean energy offerings with ‘choice,’ which is what competitive energy providers bring to the market,” said Thomas Ulry, Commerce senior vice president for sales and marketing. Commerce operates in 10 states serving 164,000 gas and/or electric residential and commercial customers: California (where the company began operations 10 years ago), Florida, Georgia, Ohio, Nevada, New Jersey, Maryland, Michigan, Pennsylvania and Texas.
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