Bloomberg News

AES, Dynegy Win Ruling Upholding California Dismissal

February 27, 2007

AES Corp. (AES:US) and Dynegy Inc. can't be sued in California state court over claims they manipulated power prices during the state's energy crisis in 2000 and 2001, an appeals court said.

The California Court of Appeals in San Diego today upheld a lower court's dismissal of a group of lawsuits brought by California municipalities and consumers. The court said the antitrust claims were pre-empted by federal laws regulating the wholesale electricity market and that a state court can't determine reasonable wholesale power rates.

``Plaintiffs cannot explain why the trial court would not have to second-guess FERC rate determinations in fixing antitrust damages to punish the defendants for the alleged anticompetitive conduct,'' the appellate judges said, referring to the Federal Energy Regulatory Commission, in a unanimous ruling.

The case was part of a multibillion-dollar fight between California and power companies stemming from brown-outs and 10- fold price increases during the crisis. AES, Dynegy, Sempra Energy (SRE:US) and Morgan Stanley (MS:US) Capital Group Inc. were the remaining defendants in the case.

Gareth Lacy, a spokesman for California Attorney General Jerry Brown, didn't return a call seeking comment. Brown succeeded former attorney General Bill Lockyer, who was a plaintiff in the case.

The case is Wholesale Electricity Antitrust Cases I & II, Fourth District California Court of Appeals (San Diego), D047697.

To contact the reporter on this story: Edvard Pettersson in Los Angeles at

To contact the editor responsible for this story: Patrick Oster at and; Robert Dieterich at

The Good Business Issue

Companies Mentioned

  • AES
    (AES Corp/VA)
    • $14.22 USD
    • 0.41
    • 2.88%
  • SRE
    (Sempra Energy)
    • $114.86 USD
    • 2.77
    • 2.41%
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