San Diego–based Sempra Energy last week agreed to pay $410 million to settle a series of lawsuits and claims arising from the 2000–2001 California energy crises. The payments will go toward some $3.2 billion in settlements already negotiated by California’s attorney general and California Public Utilities Commission (CPUC) with various energy companies that allegedly profited from artificially inflated power prices during the crisis.
Sempra Energy, which owns San Diego Gas & Electric, has so far paid $700 million in compensation to customers in California to settle claims arising from the crisis. According to a statement by the PUC, Sempra Generation and Sempra Commodities—subsidiaries that own Sempra’s power plants and an energy trading company—were involved in wholesale electricity markets during the energy crisis, when power prices spiked to record high levels.
The settlement has yet to be approved by the Federal Energy Regulatory Commission. The proceeds of the all-cash settlement are expected to pay down some of the $11 billion the state borrowed to buy wholesale electricity to keep the lights on and avoid rolling blackouts 10 years ago. The CPUC said that proceeds will also flow to the customers of the state’s three big investor-owned companies: Pacific Gas and Electric Co., Southern California Edison, and Sempra’s own San Diego Gas and Electric Co.
The settlement was a factor in the utility’s poor first-quarter earnings—which fell by $96 million, or 66%— the company said.
"After nearly a decade of litigation, I am proud to announce this settlement with Sempra Energy,” said CPUC President Michael R. Peevey in a statement. “At a time when families in California are hurting from the economic recession, this settlement will help offset energy bills for consumers throughout the State.”
Source: CPUC, Sempra Energy