Power traders sued in California on behalf of Washington state

The Associated Press
Tuesday June 04, 2002

SEATTLE – A consumer-rights lawyer is seeking $1 billion in damages from some of the nation’s largest power companies, claiming they made billions from artificially created power shortages during last year’s power crunch. 

Class-action status is sought for the lawsuit, filed Monday in San Francisco Superior Court by Seattle lawyer Steve Berman. He seeks to represent hundreds of thousands of ratepayers in 21 of Washington’s 28 public utility districts. 

In a statement, Berman said his was the first legal action seeking damages for affected ratepayers outside California. California’s lieutenant governor and attorney general previously filed similar, separate lawsuits on behalf of California ratepayers. 

Berman’s lawsuit asks the court to force the defendants, who so far number 13, to return profits “wrongfully amassed” since January 2001 and make restitution to the ratepayers. 

“In our opinion, the fix was in, and Washington electric ratepayers were set up to be the losers,” Berman said. 

According to the complaint, the defendants own or control 19 gas-fired power-generating plants in California and conspired to create a cartel to withhold power from the market, creating artificial shortages and causing price spikes. It also contends the defendants engaged in transactions designed to inflate the cost of electricity. 

The impact was crippling on PUDs in the Northwest that were forced to buy power on the spot market, Berman said. 

“Most of the PUDs tried to absorb the rate increases the defendants engineered, but simply ran out of money,” he said. “They had no choice but to go to the ratepayers with higher rates” while the power brokers posted “obscenely huge profits.”