Case Description
California, Nevada, Oregon, and Washington investigated El Paso Corporation and other defendants for conspiring to fix the prices of natural gas, e.g. conspiring to prevent competition by stopping other companies from building additional pipelines. This activity also had an impact on electricity prices as a significant percentage of electricity is generated by natural gas. Oregon and Washington began investigations in 2000, California issued subpoenas in September 2001, while Nevada filed a complaint against El Paso and other defendants in November 2002 in the Eighth Judicial District Court in Clark County, Nevada. In 2003, El Paso Corporation reached a settlement with California, Nevada, Oregon, Washington, other California entities, and various class actions (note: other defendants did not enter into the settlement). The States’ relief included the following:
-Total settlement value up to $1.5 billion in cash and non-cash consideration over 15 to 20 years including up front cash payments. This money included a $1.32 billion payment to California electricity and natural gas ratepayers, and a $34 million payment to Nevada, $17 million payment to Oregon, and $23 million to Washington, to benefit harmed Nevada, Oregon, and Washington energy consumers.
-Prevention of future manipulation of natural gas markets and pipeline capacity
-El Paso Corporation to upgrade one of its pipelines and add delivery capacity (expected cost $200 million)
-Restructuring of California long-term power agreements
-El Paso Corporation to pay $2 million from a pool established by the company to provide bonuses to their executives
-El Paso Corporation’s institution of an antitrust compliance and training program.
