Energy Lawsuits Imminent, Lockyer Says

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Electricity: Attorney general says the actions will allege antitrust violations, breach of contract by power producers during crisis.

The Los Angeles Times

As he traveled California Wednesday with other leading Democratic officeholders and candidates, Atty. Gen. Bill Lockyer said he will soon file major lawsuits against independent energy producers who profited from last year’s energy crisis.

“We’ve done sufficient investigation and research, and know there are actions that need to be filed against energy producers,” Lockyer said.

The lawsuits could be filed as early as next week, according to the attorney general. The suits will allege a variety of wrongs, including antitrust violations, breach of contract, and violations of California’s unfair business practices statute, the state’s main anti-fraud statute. Criminal investigations also continue, he said.

Jan Smutny-Jones, executive director of the Independent Energy Producers, a trade association of private energy producers and marketers in California, questioned why Lockyer is acting so long after power prices peaked in 2000. But he welcomed an opportunity to put allegations of gouging to rest.

“If there are real issues here that need to be publicly aired, we would like to see that happen,” said Smutny-Jones. “What’s happening now is this sort of constant innuendo and trial by headlines. But facts are never brought forward, evidence is not brought forward.”

“If there’s something there that’s specific and needs to be addressed, let’s see it,” he said. “But otherwise let’s stop the rhetoric and fix the underlying energy problems confronting California. Unless we get those things fixed, we’re almost guaranteed to repeat the history we just had.”

The lawsuits, more than a year in the making, are sure to play a part in Lockyer’s reelection campaign against state Sen. Richard Ackerman (R-Irvine), as well as that of Gov. Gray Davis, who led Wednesday’s Democratic barnstorming trip. The governor also could use the suits as leverage as he tries to renegotiate contracts with energy producers.

The Davis administration negotiated those contracts and defended them for months, but more recently has said that some of them were struck under adverse circumstances and should be reconsidered.

Davis, meanwhile, explained his decision on Tuesday to nominate Michael Peevey, a former Southern California Edison executive, to the California Public Utilities Commission as an attempt to make the five-member commission more moderate.

“I do believe the board needed some balance,” Davis said. “We have three consumer advocates. The PUC is dealing with some very complicated financial matters. We needed someone with business acumen.”

Consumer groups protested Peevey’s nomination when it was announced Tuesday. Doug Heller of the Foundation for Taxpayer and Consumer Rights in Santa Monica said Davis was putting the interests of the power industry ahead of consumers.

Davis said that while Peevey profited from energy deregulation, he probably will not advocate further deregulation if he is confirmed by the state Senate.

“Voters rightly assume my appointees will reflect more or less my point of view, and I have said repeatedly that we will go back to energy deregulation over my dead body,” Davis said.


Times staff writer Nancy Vogel contributed to this report.

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