Susan Luzzaro 4:30 p.m., Dec. 11
Sempra Energy Wins Rejection of Energy Contract Renegotiations
Jury finds "company lied to state negotiators" (U-T A1), but no harm to state
Today's San Diego Union-Tribune reported that Sempra Energy won its suit against California, preventing the renegotiation of energy crisis contracts that the state claimed were obtained in a less-than-truthful manner.
While the Superior Court victory left the energy crisis-inspired contract intact, federal officials may use the jury finding of "intentional misrepresentation" by Sempra Energy to force the contract to be undone in proceedings before the Federal Energy Regulatory Commission.
Under the contract, Sempra Energy or its subsidiaries are permitted to purchase cheap electrical power outside the state then sell it in California at a substantial profit. At the time the contract was signed, one of Sempra Energy's stated goals to potential investors was to get up to one third of its income from its unregulated businesses by 2003.
Sempra Energy's San Diego Gas and Electric Company (SDG&E) was not involved in the Superior Court jury trial and has denied all involvement in any crisis-related price gouging through the sale and repurchase of electricity in deals with out-of-state brokers on the grid.
Sempra Energy has previously claimed having the expertise to execute the most sophisticated trades for profit in the complex energy markets. Enron was accused of training power company employees on how to game the system in ways that led to the California energy crisis of 2000.
At least one of the many "Sempra Entities" was listed as a partner with Enron during its bankruptcy proceedings.
SDG&E was found guilty of fraud or false statements to government inspectors in United States of America v. SDG&E (2007) but guilty verdicts were set aside when the District Court granted defendants' motion for new trial. SDG&E has been repeatedly fined in the last two years well over $15 million by the California Public Utilities Commission for withholding testimony for its Sunrise Powerlink application and investigational obstruction regarding recent San Diego county wildfires.