A Eureka, CA-based small biomass power generation operator filed a lawsuit in federal district court in the Eastern District of California naming a dozen major energy suppliers in the West for allegedly manipulating wholesale natural gas prices in 2000-2001, causing prices to spike and greatly increase the cost of its power at biomass plants using timber waste.

The lawsuit claims the defendants used various trading schemes to drive up wholesale gas prices at the California-Arizona border to create artificially high prices at Southern Califoirnia Gas Co.’s receipt point. Sempra Energy and its trading company were among the firms named in the suit by Fairhaven Power Co.

Other defendants included: EnCana subsidiary W. D. Energy Services; AEP Energy Services; American Electric Power; CenterPoint Energy and its affiliates, Reliant Energy Services and Reliant Resources; Coral Energy Resources; Duke Energy and its affilaite Duke Energy Trading and Marketing; El Paso Natural Gas Co.; Williams Companies; Dynegy; CMS Energy; Xcel Energy; and West Coast Power.

The lawsuit alleges that the companies “fixed, maintained and stabliized prices” in a way that adversely affected the independent energy producer and had a “substantial impact” on interstate commerce. The legal action was similar to what a major California winery, E. & J. Gallo Winery filed against EnCana last year in a case that is still pending in federal district court.

Fairhave’s suit alleges that the companies violated two federal anti-trust laws, along with California laws governing buisness practices. The company uses large amounts of natural gas to co-fire with timber waste an 18-MW power plant in Eureka, a coastal town in the far north end of California in the midst of the state’s timber industry.

Calling the prices paid in the 2000 through 2001 period “unfair,” Fairhaven is trying to be reimbursed for the difference between what the company paid for natural gas on the spot market during the two-year period and a still-to-be determined price that should have been charged if the markets had not been manipulated.

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