EnCana faces California gas price-fixing trial

EnCana faces California gas price-fixing trial by Shaun Polczer, Calgary Herald, September 20, 2007
EnCana Corp. on Wednesday suffered a legal setback against allegations it helped manipulate California energy markets after an American court allowed a lawsuit against it to move ahead. The news comes after the Ninth Circuit U.S. Court of Appeals issued a decision to allow California consumers to sue natural gas suppliers in relation to the 2000 energy crisis which caused energy prices to triple and resulted in rolling electrical blackouts across the state. According to Steven Williams of California law firm Cotchett, Pitre & McCarthy, at least 40 other natural gas manipulation cases throughout the state were stayed pending this ruling. “It is a very important and favourable decision,” he said, noting that the final tally for damages in this one case could top $80 million. “It’s a substantial claim,” he added. The decision came in a lawsuit filed in 2003 by E. & J. Gallo Winery accusing EnCana and a U.S. subsidiary of inflating gas prices through violations of U.S. state and federal antitrust laws. The 42-page decision said in part: “Beginning in the summer of 2000, both natural gas and electricity prices at the California border markets were subject to widespread manipulation by energy traders that dramatically raised the price of natural gas.” EnCana sought dismissal of the claim on the grounds that the filed rate doctrine — which grants federal jurisdiction to set rates for certain utilities — barred Gallo’s claims as a matter of law. The district court denied the motion and EnCana took the case to the Court of Appeals, which upheld the original decision. Barring further appeals, Williams said a trial could begin before the end of the year. EnCana’s accused “co-conspirators” include some of the biggest names in the natural gas marketing industry: Coral Energy, Reliant Energy Inc., Duke Energy Corp., TXU Corp., Dynegy Inc. and Enserco Energy Inc. … EnCana spokesman Alan Boras said the suit has been ongoing and he was not immediately aware of the court decision or its potential impacts. [Emphasis added]