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So. California Gas Co. Allegedly Limited Gas Supplies and Discouraged Competition

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Case ID: 4563 | Miscellaneous | 01/16/2006

A lawsuit was filed against Sempra Energy and two of its utilities, Southern California Gas Co. and San Diego Gas & Electric Co. The lawsuit charges that the utilities conspired with El Paso Corp. to limit gas supplies and stifle competition, sparking the wild electricity price increases that hammered California's newly deregulated energy market in 2000-2001.

According to the lawsuit, SoCal Gas agreed not to compete against El Paso on the Samalayuca pipeline. El Paso, in turn, abandoned plans to bring cheap Canadian gas to California.

The stakes in the lawsuit are potentially huge for Sempra, which was formed in 1998 from the merger of SoCal Gas and SDG&E. Under California law, the nearly $8 billion in damages alleged by plaintiffs, including the city and county of Los Angeles, would triple to about $23 billion if Sempra loses.


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