Antitrust Case Against PG&E Creeps Ahead

SAN FRANCISCO (CN) — A federal judge dismissed without prejudice two of three antitrust claims against Pacific Gas & Electric’s billing and collections practices and let a third claim stand.
     United Energy Trading sued Pacific Gas & Electric et al. on a RICO-based respondeat superior claim, a Sherman Act “attempt to monopolize” claim and a state claim of conversion.
     U.S. District Judge Richard Seeborg on Wednesday denied PG&E’s motion to dismiss the respondeat superior claim, and gave United Energy 30 days to amend its other claims.
     United Energy is a core transportation agent, which buys gas on the open market and sells it via PG&E’s distribution system.
     In billing, PG&E supposed to list customer charges from United Energy along with its own charges, according to Seeborg’s summary.
     United Energy claimed that PG&E runs three schemes that deprive it of money, and defraud customers.
     In its “payment withholding scheme,” PG&E holds money intended to pay bills owed to United Energy; the “energy credit scheme” applies PG&E credits to United Energy’s accounts, thereby misappropriating money intended for United Energy; and the “reversal scheme” reverses charges to United Energy’s customer accounts, United Energy claims.
     United Energy claims PG&E knew that three of its key employees — Vice President Albert Torres, service manager William Chen, and operations and billing supervisor Tanisha Robinson — were running the schemes, and hired them to engage in racketeering.
     It claims the fraud hurts competitors by inflating natural gas prices, when they should be decreasing; reducing pipeline capacity; increasing transportation and storage fees; increasing bad debts for competitors while enabling PG&E to reduce its liability for mandatory credits and charging higher prices to customers.
     All this amounts to conversion and restraint of trade through attempted monopolization of the local natural gas market, United Energy says.
     Among PG&E’s arguments for dismissal are that United Energy did not adequately plead its respondeat superior racketeering claim or show that PG&E directed its employees to act illegally on its behalf.
     Seeborg denied the motion to dismiss the respondeat superior claim, United Energy had “invoke(d) … precise acts” of the three key PG&E employees, “by supervising employees and sending EDI files — acts they were hired to carry out.” (EDI is undefined in the document, though Robinson’s job title is “Supervisor for EDI Operations and ESP Billing.)
     Seeborg granted the motion to dismiss the conversion claim with leave to amend. PG&E claimed that United Energy did not cite a specific amount of money converted, and did not show it immediately was entitled to the assets when the alleged conversion occurred.
     Seeborg agreed that United Energy did not sufficiently argue that PG&E is holding some $2.3 million in payments earmarked to United Energy, which amounts to lost revenues, customers, market share, and other costs.
     He granted the motion to dismiss the Sherman Act claim, saying United Energy did not sufficiently argue barriers to entry, and that PG&E’s market dominance is not proof of a monopoly or an effort to create one.

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