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Tuesday, 9 April, 2002, 21:03 GMT 22:03 UK
California to sue power companies
The California state power grid during a blackout
The Federal regulator plans to impose a ceiling on electricity prices
In the wake of the energy crisis which gripped California in the summer of 2001, the state's attorney general is suing four wholesalers of electricity for profiteering.

The four are Coral Energy, a subsidiary of Anglo-Dutch group Royal Dutch/Shell, Powerex Corp, owned by Canada's BC Hydro, and two US companies - Mirant Corp and Williams Cos Inc.


Today, we are seeking to make power pirates pay a California penalty for their illegal profiteering

Bill Lockyer
California attorney general
The state is keen to find ways of making back some of the billions it had to spend on emergency power to avert the rolling blackouts and shortages that the crisis caused.

That summer, wholesale electricity prices leapt by a factor of 10 as a deregulated market combined with a hot summer and capped retail prices.

The suit, filed in San Francisco Supreme Court, alleges that the quartet used the crisis to charge "unjust, unreasonable and illegal rates" in violation of California's Unfair Competition Act.

"It caused the prices to increase as much as 1000%," California Attorney General Bill Lockyer told the BBC's World Business Report.

"That meant rates jumped rather substantially, there were business impacts and job losses, a rather serious array of economic consequences," he said.

'Thousands of offences'

The state is seeking damages for what attorney general Bill Lockyer said were "hundreds of thousands" of illegally priced electricity deals.

With each worth a civil penalty of $2,500, the total damages could reach $1bn, he said.

"Today, we are seeking to make power pirates pay a California penalty for their illegal profiteering," he said in a statement.

More to come?

More suits could be on the way, he added, saying some two dozen other companies are being investigated.

The state is also looking for $12bn from federal regulators in compensation.

But the energy companies noted that re-election campaigns for both Mr Lockyer and Gray Davis, the state's governor, were just getting under way.

"We continue to have lawsuits, we continue to have punitive legislation, and we still don't have a long-term solution to California's energy crisis," said Mirant spokesman Patrick Dorinson.

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California Attorney General Bill Lockyer
"The excess profits that they (the energy generators) took are what we're trying to get refunded"
See also:

19 Mar 02 | Business
UK power group's profits jump
03 Oct 01 | Americas
State saves California power giant
08 Jun 01 | Business
Oil wants blackout exemptions
18 May 01 | Business
Hostile reaction to Bush energy plan
08 May 01 | Americas
Heat forces California blackouts
01 May 01 | Business
Is there a US energy crisis?
06 Apr 01 | Business
US power giant files for bankruptcy
18 Jan 01 | Americas
California blackout: Why it happened
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