SAN DIEGO, Nov. 3, 2003 — Federal Energy Regulatory Commission (FERC) staff Monday agreed to a $7.2 million settlement with Sempra Energy Trading, the wholesale energy trading unit of Sempra Energy, as a full, final and complete resolution of the FERC’s gaming and partnership investigation of Sempra Energy Trading in connection with a review of western energy markets between January 2000 and June 2001.
Sempra Energy Trading’s settlement agreement is subject to final approval by the FERC and could be decided upon as early as December 2003.
“We entered into this settlement to end the mounting legal expenses and burden of a long, drawn out litigation process that could stretch on well into next year,” said Michael Goldstein, senior vice president, Sempra Energy Trading. “Although we did not engage in improper market activities, we wanted to forego the distraction of a protracted legal battle and thought it best to put this matter behind us and focus on the future of our business and our customers.”
Under the terms of today’s filing Sempra Energy Trading expressly denies that the allegations raised by the FERC have any merit and that its trading activities violated any tariff or law. In addition, FERC staff agreed that Sempra Energy Trading did not earn revenues from, among other activities, false energy imports or “ricochet trading” nor did it engage in any improper partnerships or other arrangements.
A copy of the settlement and explanatory statement is available on the company’s Web site at www.sempra.com .
Additional FERC proceedings involving the California energy market continue. In June 2003, FERC initiated an investigation into the physical and economical withholding by energy suppliers. In August 2003, FERC staff issued a preliminary report on the physical withholding of generation and stated there was no need to investigate some companies, including SET and other Sempra Energy affiliates. The economic withholding portion of this FERC investigation is continuing as is a separate proceeding involving the determination as to whether refunds are owed as a result of California energy prices charged between October 2000 and June 2001.
Based in Stamford, Conn., Sempra Energy Trading — a subsidiary of Sempra Energy Global Enterprises, the umbrella for Sempra Energy’s growth businesses — is a leading participant in marketing and trading physical and financial commodity products, including natural gas, power, petroleum products and base metals. Sempra Energy Trading combines trading and risk-management experience with physical commodity expertise to provide innovative solutions for its customers worldwide.
Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company with 2002 revenues of $6 billion. The Sempra Energy companies’ 12,000 employees serve more than 9 million customers in the United States, Europe, Canada, Mexico, South America and Asia.
Sempra Energy Trading is not the same company as the utility SDG&E/SoCalGas, and it is not regulated by the California Public Utilities Commission.