Rival Accuses PG&E of RICO Corruption

           SAN FRANCISCO (CN) – Pacific Gas & Electric swiped millions of dollars through fraudulent billing schemes calculated to steal customers from a competitor, a smaller rival claims in Federal Court.
     Plaintiff United Energy Trading, which uses Pacific Gas & Electric as its billing and collections agent, claims PG&E deposits UET customer payments into its own accounts to deceive UET into canceling accounts of “overdue” customers, who actually have paid their bills.
     PG&E hides behind a customer confidentiality policy and refuses to reveal specific information about the accounts, UET says in its May 28 lawsuit.
     “PG&E’s payment withholding scheme dupes UET into supplying gas to PG&E, which [it] holds and uses, knowing that its accounting methods ensure that UET will not be paid in full for such gas,” the complaint states.
     The companies’ business relationship is both competitor and supplier – UET is classified as a “core transport agent” and Northern California customers can choose it for natural gas services. PG&E administers the energy for UET via its extensive pipeline network and is responsible for tracking and billing UET’s customers’ use and distributing money back to UET.
     UET claims the utility giant illegally withholds account payments and causes UET to unnecessarily contact customers who actually have fully paid accounts. It also claims that PG&E tells its customers to ignore UET’s billings and that as a result, hundreds of customers have dumped UET for PG&E.
     UET provides natural gas for 60,000 customers in PG&E’s territory and pays its competitor $40,000 per month for billing services, according to the complaint. The Colorado-based utility says it’s owed more than $1.7 million from customers monitored by PG&E.
     UET claims that in addition to withholding customer payments, “PG&E applies credits from its own services or programs, such as rebates or credits for use of solar panels, to UET’s commodity gas charges. In this way, PG&E effectively misappropriates UET’s customer charges to offset the money that PG&E owes to customers.”
     PG&E also inappropriately “reverses” charges to UET accounts, the company claims, which should happen only when a customer cancels service or does not pay. “However, PG&E is reversing UET customer accounts for which PG&E has in fact received payment. Instead of applying those charges to the UET account balance, PG&E is crediting those amounts to its own electric or gas transportation accounts, and then inexplicably reversing the amounts owed to UET,” the complaint states.
     This has caused “substantial harm” to UET, which “has lost countless customers who were annoyed or upset at UET’s collection efforts on fully paid accounts, but which PG&E falsely informed UET were in arrests,” according to the complaint.
     Finally, UET says, it has “disconnected or canceled hundreds of customer accounts for nonpayment based on PG&E’s false representations, made over the wires in interstate commerce, that the UET customers had not paid their bill for UET’s charges.”
     UET calls all this an abuse of a regulated monopoly’s market power, calculated to destroy competition.
     It seeks punitive damages for RICO corruption, Sherman Act violations, conversion, intentional and negligent misrepresentation, breach of contract, interference with contract, business law violations and breach of fiduciary duty.
     It is represented by Holland & Knight of San Francisco.
     In a statement, PG&E indicated the California PUC is already handling the dispute.
     “This is a billing dispute between two natural gas companies. The dispute is also the subject of an ongoing California Public Utilities Commission Proceeding. PG&E will continue to work through the regulatory and court processes to resolve the dispute,” the company said.
     PG&E, the second-largest provider of natural gas in California, serves more than 4 million accounts in 70,000 square miles of the Golden State. In April it was slapped with a record $1.6 billon fine for the 2010 San Bruno pipeline explosion that killed eight people and leveled a neighborhood. A federal grand jury is investigating relationships its executives had with the California Public Utilities Commission.

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