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About Ellen F. Rosenblum
Attorney General Hardy Myers today announced final settlement terms with El Paso Corp., a Houston-based provider of natural gas. The $1.7 billion, four-state settlement is the second such agreement resulting from investigations into the 2000 - 2001 Western energy crisis. The agreement will return nearly $18 million to Oregonians. California was the lead state in the negotiations, which also included representatives from Oregon, Washington and Nevada. The settlement resolves claims of market manipulation originating from the extraordinary increases in the price of wholesale power during the summer, fall and spring of 2000 and 2001. Specific allegations against El Paso focus on the sale of natural gas during the aforementioned time period.
The exact terms of the settlement send $17,981,000 to Oregon to "be used for the benefit of energy consumers." Of this total, up to 12 percent may be used by the Attorney General to offset costs of investigation and the development and implementation of a distribution plan. The settlement will be paid to Oregon over the next 15 - 20 years, depending on the market status of El Paso. However, an initial payment of $5,316,876 will be received shortly after the "closing" of the settlement agreement. The agreement further provides that El Paso may accelerate payment of the remaining value on a prorated basis within the first two years following the closing.
"Today's agreement further validates our assertion that Oregonians were victimized by unscrupulous marketplace tactics during the now infamous West Coast energy crisis," Myers said. "We will never fully repair the damage, but this is another important step in the right direction."
The announcement comes three months after Attorney General Myers announced the distribution of the proceeds from the state's first settlement with the Williams Companies. As with the Williams settlement, Myers anticipates conducting a thorough review of the impact of El Paso's actions in the marketplace prior to announcing the terms for the distribution of the proceeds from the El Paso settlement.
In addition to direct refunds, a significant portion of the overall settlement requires El Paso to drastically reduce the terms of existing natural gas contracts throughout California. The settlement further requires El Paso to cooperate with the continuing investigation by the Attorneys General of Oregon, California and Washington, and establishes a strong antitrust compliance program within the company.
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