Put that in your pipeline and smoke it

The United States Supreme Court decided today (April 21) that companies can sue under state antitrust laws when they believe pipeline companies are committing fraud by manipulating indexes they use to figure the market price of gas.

A group of companies, including Learjet, originally sued a gas-distribution company, Oneok. The pipeline company lost and took the case to the Supreme Court, which today ruled for the gas-buying companies and against Oneok.

The irony is that the California Public Utilities Commission had a major investigation of such fraud earlier in this century.

"The central question is — where is California?" asks Loretta Lynch, who was president of the utilities commission, but was replaced by the business-cozy Michael Peevey in late 2002 because utilities pressured then-governor Gray Davis.

Now Peevey is under state and federal investigation for possible fraud of his own in making secret deals to protect the interest of utilities and pass costs on to ratepayers.

California, says Lynch, was "in the backroom, having made a deal to not take any action on the natural pricing manipulation and fraud for which we found substantial evidence during the time I was at the CPUC."

In the 2005-2006 period, the gas-fraud investigation was quietly dropped. Peevey headed the commission then, and Lynch suspects this is still another case of his back-channel dealings on behalf of corporations.

"California was AWOL in fighting against fraud, manipulation, and in fighting for its gas consumers," she says.