Los Angeles County, a multi-million-dollar annual electricity and natural gas consumer, has sued San Diego-based Sempra Energy and one of its two major utility distribution companies, Southern California Gas Co., for unspecified monetary damages, alleging the companies were part of a massive conspiracy to drive up natural gas and electricity costs that ultimately will cost taxpayers “hundreds of millions of dollars,” according to a report Sunday in the Los Angeles Daily News, which includes a strong denial from the companies.

The lawsuit, according to the LA Daily News report, alleges that Sempra and some of its subsidiaries engaged in a “massive conspiracy to eliminate competition in the newly deregulated energy industry and to raise the price of natural gas and electricity in Southern California.” Similar lawsuits were filed early last year in the height of the wholesale interstate natural gas price spikes at the California-Arizona border by both the cities of Los Angeles and Long Beach, the two largest in LA County.

Sempra and SoCalGas through a spokesperson said this latest lawsuit, like the earlier ones, is “without merit.”

LA County’s legal action “overlooks critical facts and relies on false speculation,” Sempra spokesperson Denise King was quoted in the Daily News report. “SoCalGas has always been looking out for the best interest of its customers and proactively seeking ways to lower costs and ensure the availability of natural gas.”

According to the county’s lawsuit, the alleged conspiracy was intended to restrict output, cause supply shortfalls and allow the natural gas industry’s most powerful Southern California players to preserve and maintain the market dominance that they enjoyed for many years under regulation. As a result, the companies have “illegally reaped unprecedented profits” at the expense of consumers, the suit alleges.

“Their unlawful collusion caused astronomical increases in the price of both natural gas and electricity. As a result, these companies have reaped profit windfalls from California customers, among them the county of Los Angeles, that have had to and will have to pay hundred of millions of dollars of additional costs to meet their natural gas and electric needs.”

Los Angeles County, which is facing a $1 billion deficit in its health care system over the next few years, the Daily News reported, has been looking for ways to cut expenses–including its massive utility bills.

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