From: mary.hain@enron.com
To: james.steffes@enron.com, susan.mara@enron.com, jeff.dasovich@enron.com, sarah.novosel@enron.com, tim.belden@enron.com, christopher.calger@enron.com, christian.yoder@enron.com, steve.c.hall@enron.com, richard.sanders@enron.com, paul.kaufman@enron.com, james.steffes@enron.com, james.keller@enron.com, mike.smith@enron.com, harry.kingerski@enron.com, dennis.benevides@enron.com, tim.belden@enron.com, robert.badeer@enron.com, jeff.richter@enron.com, neil.bresnan@enron.com, jubran.whalan@enron.com
Cc: christi.nicolay@enron.com, phillip.allen@enron.com, john.lavorato@enron.com
Date: 2000-12-18 16:22:00+00:00
Subject: DJ California Suit Claims Gas Cos Conspired To Fix Prices, DJ La
 wmakers Ask Justice Dept To Probe Calif Pwr,Natural Gas

FYI
	Enron Capital & Trade Resources Corp.
	
	From:  "Pergher, Gunther" <Gunther.Pergher@dowjones.com>                      
     12/18/2000 01:03 PM
	

To: undisclosed-recipients:;
cc:  
Subject: DJ California Suit Claims Gas Cos Conspired To Fix Prices, DJ La 
wmakers Ask Justice Dept To Probe Calif Pwr,Natural Gas


17:45 GMT 18 December 2000 *DJ Class Action Suit Filed In California Vs
Natural Gas Cos
(MORE) Dow Jones Newswires 18-12-00
1745GMT
*DJ California Suit Claims Gas Cos Conspired To Fix Prices
(MORE) Dow Jones Newswires 18-12-00
1746GMT*DJ California Suit Names Sempra, El Paso Gas As Defendants
(MORE) Dow Jones Newswires 18-12-00
1752GMT Alleges Cos Agreed To Monopolize Mkt
LOS ANGELES (Dow Jones)--Two lawsuits seeking class action status were filed
in Los Angeles Superior Court Monday alleging three major energy companies
conspired to monoploize the natural gas market in southern California and
artificially increase prices and create shortages.
The complaints name Sempra Energy (SRE) and its affiliates San Diego Gas &
Electric Co. and Southern California Gas, along with El Paso Natural Gas
Corp. as defendants.
The complaint claims the companies were involved in "massive conspiracy" and
together agreed to artificially constrict the supply of the commodity by
killing natural gas pipeline projects. The complaint alleges unfair
competition and unlawful business practices.
According to the complaint, top executives of SoCal Gas, SDG&E and El Paso
Natural Gas Corp. met at a Phoenix hotel in 1996 and "fearing a new era of
open competition and lower (natural gas) prices" the executives "gathered
secretly to hatch a conspiracy to dominate the unregulated aspects of the
natural gas and electricity markets."
"At the meeting these three companies illegally agreed not to compete
against each other in Southern California and Baja California natural gas
delivery markets," the complaint states. "They also conspired to prevent
other pipelines from being built that would have competed against them and
lowere natural gas prices in these markets."
The defendants have not yet seen a copy of the complaint and were unable to
comment.
(MORE) Dow Jones Newswires 18-12-00
1832GMT Plaintiffs Seek Billions In Damages
The lawsuit claims that El Paso Natural Gas and Sempra and its afilliates
conspired to prevent other pipelines from being built that would have
competed against them resulting in lower natural gas prices.
The plaintiffs are seeking billions of dollars in damages.
The complaint alleges that in 1992 Tenneco Inc. completed the Kern River
Pipeline, which transports natural gas from Wyoming to Kern County, Calif.
Tenneco then began to plan for additional pipelines that would bypass SoCal
Gas and SDG&E pipelines and deliver gas directly to consumers in San Diego,
Los Angeles, Imperial Valley and the Baja Peninisula.
One of those bypass pipelines - the Altamont pipeline -would have
transportecd gas from Canada to the northern end of the kern River pipeline
in Wyoming. Tenneco envisioned that low cost Canadian gas would be carried
to Southern California and Baja customers, according to the complaint.
El Paso acquired Tenneco in June 1996, shortly before California opened up
its electricity market to competition.
According to the complaint, three months later SoCal Gas, SDG&E and El Paso
met at the Embassy Suites Hotel near the Phoenix airport and began to hatch
a conspiracy that the energy companies would eliminate Tenneco's pipeline
projects and continue to dominate the natural gas market via SoCal Gas being
the sole bidder on the Baja pipeline.
SoCal Gas then allegedly agreed to refrain from competing with El Paso on a
pipeline project in Mexico.
"The transportation constraints which the conspirators created eliminate
competition from Canadian gas, radically drove up the price of gas ... (and)
electricity ...and discouraged the building of new electric generation
plants to serve the California market," the complaint states.
Natural gas in California has spiked to a record $60 per million British
thermal unit last week and still hovers at around $20/mbtu, compared with $3
a year ago.
Sempra Energy spokesman Art Larson said his company has not yet been served
with a copy of the complaint, but "any claims that (Sempra) violated
antitrust or other laws are completely false."
"On Dec. 7, SDG&E filed for emergency relief asking federal regulators to
impose a price cap on natural gas transportation prices to the California
border that if approved would lower costs for California gas customers,"
Larson said.
Last Friday, California Gov. Gray Davis asked state Attorney General Bill
Lockyer to investigate whether natural gas suppliers have manipulated the
market in an effort to drive up prices.
-By Jason Leopold; Dow Jones Newswires; 323-658-3874;
jason.leopold@dowjones.com
   (END) Dow Jones Newswires  18-12-00
2001GMT

20:33 GMT 18 December 2000 DJ Lawmakers Ask Justice Dept To Probe Calif
Pwr,Natural Gas
WASHINGTON (Dow Jones)--Two California lawmakers have asked the U.S.
Department of Justice to investigate "potential collusion" in the state's
highly volatile electricity and natural gas markets.
The lawmakers - U.S. Sen. Barbara Boxer, D-Calif., and John Burton,
president pro tempore of the California State Senate - asked Attorney
General Janet Reno to take "immediate steps" to investigate California
markets for electricity and natural gas.
"We are concerned that market power is being abused by generators in the
electricity market to inflate prices and gouge consumers," the letter said.
The lawmakers questioned whether repairs or maintenance were truly behind
why a quarter of the state's generating plants weren't operating in recent
weeks, contributing to the latest power-supply emergency in California.
"Some have suggested that one reason for (power) plant shutdowns is that in
some cases companies are selling natural gas they would otherwise use to
operate their plants at exorbitant prices on the natural gas market," the
lawmakers said.
"The Department of Justice must act to ensure that collusion and other
unlawful acts are not contributing to the crisis in California's power
markets," they told Reno.
The probe must begin now, despite the pending change in presidential
administrations next month, to set "a strong example of leadership for the
new attorney general to follow," Boxer and Burton wrote.
There was no immediate response from the Justice Department to the letter,
which was dated Friday.
"I'd be very surprised if the Justice Department found any gaming or
violation of the law," said Lynne Church, president of the Electric Power
Supply Association, whose members operate deregulated power generation
facilities in California.
Any DOJ investigation would be on top of probes already under way by the
U.S. Federal Energy Regulatory Commission, the state of California and
others, she said. "I'm not too nervous about that one," Church said of the
prospect of DOJ joining the fray.
Neither the California Independent System Operator nor officials in the
Pacific Northwest found any evidence of price-gouging in separate
investigations they conducted, Church noted.
Power prices skyrocketed in California because of the flawed market
structure state officials imposed, she said.
"There's no doubt those markets went higher than they would have if that
structure were not in place," she said. "But the fact that (power producers)
made a lot of money doesn't mean they violated the law."
By Bryan Lee, Dow Jones Newswires; 202-862-6647; bryan.lee@dowjones.com
   (END) DOW JONES NEWS  12-18-00
03:33 PM Copyright (c) 2000, Dow Jones & Company Inc


G_nther A. Pergher
Senior Analyst
Dow Jones & Company Inc.
Tel.  609.520.7067
Fax. 609.452.3531

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