Sempra Energy lied, Joe Dunn says

From the Sacramento Bee (excerpts):

A prominent state senator Wednesday accused San Diego's Sempra Energy of lying to the Legislature about its role in California's energy crisis. Sen. Joe Dunn, D-Santa Ana, sent his allegations and supporting documents to the Sacramento County district attorney for investigation of perjury. Dunn, who chaired a legislative investigation into the causes of the energy crisis, said that officials of Sempra's trading unit lied by insisting the company hadn't engaged in Enron-like "games" in order to manipulate California electricity prices. Officials of Sempra, the parent of San Diego Gas & Electric, denied Dunn's allegations and said the senator "presented a distorted and inaccurate picture" of its testimony. They said they did nothing wrong during the energy crisis and answered the Dunn committee's questions truthfully. Sempra's trading unit agreed in 2003 to pay $7.2 million to settle market-manipulation charges brought by the Federal Energy Regulatory Commission. But the company continued to deny wrongdoing and said it made the settlement to put the issue behind it. The District Attorney's Office hadn't yet reviewed Dunn's documents, a spokeswoman said. A perjury conviction could carry a prison term of up to four years. Dunn also asked the Senate Energy Committee to investigate Sempra officials for contempt for allegedly lying to legislators during the 2001-2003 investigation. If found guilty of contempt by the full Senate, the San Diego company could be fined or subjected to other penalties. The Dunn allegations revolve around Sempra Energy Trading, a Connecticut-based subsidiary that was actively buying and selling electricity in the California market while sister company SDG&E was getting battered by rising wholesale prices. Under the state's deregulation setup, utilities like SDG&E had to buy much of their power every day from generating firms and trading companies like the Sempra unit. As prices soared, the state's water agency had to step in and begin buying power in early 2001 on behalf of SDG&E, Pacific Gas and Electric Co. and Southern California Edison as those companies faltered financially. State officials said market manipulation was a major culprit behind the sky-high prices. Memos uncovered in 2002 showed how trader Enron Corp. manipulated prices through trading strategies with nicknames like "Ricochet," "Fat Boy" and "Death Star." After the release of the Enron memos, Dunn's committee asked officials of every market participant, in writing and under oath, if they had used schemes like Enron's. Dunn said Sempra's denials, signed by the managing director of the energy trading unit, were contradicted by internal e-mails and other evidence. In one March 2001 e-mail Dunn released to reporters, a trader from Sempra discusses a trade that Dunn said was an example of Enron's "Ricochet" strategy. In "Ricochet," companies arranged to have power exported from California and then reimported. Power that was reimported wasn't subject to California price ceilings and could generate a fatter profit.... ....Despite Sempra's $7.2 million settlement with the federal government, state officials think Sempra owes California about $100 million, said Erik Saltmarsh, acting executive director of the state Electricity Oversight Board. The federal settlement "let Sempra off the hook," Saltmarsh said. Dunn said he thinks other companies lied about the gaming activities. "There will be more of these types of referrals" to the district attorney, he said. The energy crisis has spawned a handful of criminal charges. Three former Enron traders have pleaded guilty to criminal charges in connection with "gaming" activities.

State Senator Joe Dunn is a dynamic and progressive representative from Orange County. I had the priviledge of attending a speech he recently gave and was blown away by his frankness, grasp of political history and his no-holds-barred approach to fighting political criminals. He's running for California Attorney General, an office for which he's eminently qualified, and I wish him the best of luck.