Summary
This Form 8-K filing from Sempra Energy (SRE) on November 22, 2005, discloses significant legal action taken against the company and its California utility subsidiaries, Southern California Gas Company and San Diego Gas & Electric Company. The Attorney General of California and the California Public Utilities Commission (CPUC) have filed a lawsuit alleging that Sempra intentionally misled the CPUC in 1998 to gain approval for using utility pipeline capacity for its non-utility subsidiaries to supply natural gas to a power plant in Mexico. The lawsuit claims that this action resulted in insufficient pipeline capacity to serve California customers, leading to natural gas curtailments for electric generators and large commercial/industrial customers during the 2000-2001 period. These curtailments allegedly caused increased air pollution and higher electricity prices for California consumers due to the use of oil as an alternative fuel. The company is facing substantial penalties and potential divestiture of non-utility subsidiaries.
Key Highlights
- 1Lawsuit filed by California Attorney General and CPUC against Sempra Energy and its California utilities.
- 2Allegations of intentional misleading of the CPUC in 1998 regarding natural gas pipeline capacity usage.
- 3Lawsuit stems from Sempra's alleged use of utility pipeline capacity for its non-utility subsidiaries to supply a Mexican power plant.
- 4Claim of insufficient pipeline capacity for California customers leading to curtailments in 2000-2001.
- 5Curtailments allegedly impacted electric generators and large commercial/industrial customers.
- 6Service disruptions reportedly caused increased air pollution and higher electricity prices.
- 7The suit seeks significant statutory penalties, unspecified damages, and potential divestiture of non-utility subsidiaries.