Sues

The nation’s largest municipal utility, the Los Angeles Department of Water and Power (LADWP), Friday filed a lawsuit against Houston-based Reliant Energy and its affiliates alleging breach of contract and conspiracy to drive up wholesale natural gas prices in the 1999-2001 period. The action was filed in federal court in Los Angeles.

Already legally troubled Progress Energy Inc., Raleigh, NC, ran into more problems Thursday when the San Francisco city attorney sued the company for $300 million, alleging a predecessor of the company defaulted on an energy-saving contract for which the city’s schools had already paid more than $23 million.

As a baseball strike was averted last Friday, the San Francisco Giants were busy in another New York City venue — federal bankruptcy court — asking the judge in the Enron Corp. Chapter 11 proceedings to force the fallen Houston energy marketing machine to remove its tilted “E” logo from the baseball team’s Pacific Bell Park.

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 recent report in the Los Angeles Daily News, which includes a strong denial from the companies.

Lawyers for Samson Investment Co., a Tulsa-based natural gas-heavy energy company, filed a lawsuit against auditor Arthur Andersen LLP this week in what is predicted to be the first of many such lawsuits accusing the Big 5 accountant of complicity in Enron Corp.’s ultimate bankruptcy. Samson claims Andersen “recklessly disregarded evidence of questionable financial transactions between Enron and its insiders.” The lawsuit, seeking unspecified damages, requests class-action status on behalf of more than 100 unnamed companies.

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.

Following up directly on state regulators’ actions earlier last week, California’s attorney general filed a lawsuit against bankruptcy-preoccupied Pacific Gas and Electric Co. last Thursday, alleging that the utility’s proposed Chapter 11 federal bankruptcy reorganization plan would violate the state’s “unfair competition law.” The California Public Utilities Commission President Loretta Lynch immediately praised the AG’s lawsuit, and said the CPUC will join the state AG’s suit against the utility.

New York-based J.P. Morgan Chase & Co., one of Enron Corp.’s biggest creditors and rumored to be in the running to make a bid for the company, on Tuesday sued its former business partner for more than $2.1 billion. The lawsuit was filed in the U.S. Bankruptcy Court in New York on behalf of itself and related parties, claiming it has rights to some of Enron’s assets, including accounts receivable, commercial paper, cash and other property not protected in the Chapter 11 reorganization.

Two more former employees of Coastal Corp. (now part of El Paso Corp.) have been charged with stealing tens of thousands of dollars from the company through a futures profits allocation scheme. The Commodity Futures Trading Commission (CFTC) has filed an administrative action against Clay Krhovjak of Bellville, TX, and Paul Cochran of Houston, charging that the two engaged in a trading scheme over a five-month period in 1996 to allocate profitable trades belonging to Coastal to accounts controlled by other unnamed scheme participants. The CFTC believes the two made off with about $89,228 in stolen profits.