Report: El Paso to Pay $1.7B in Lawsuits
SAN FRANCISCO (AP) _ Shares of El Paso Corp. surged Thursday following a news report that the energy company has agreed to pay nearly $1.7 billion to settle lawsuits alleging it manipulated California’s natural gas market.
The specifics of the settlement, which could be announced as early as Thursday, were still being negotiated Wednesday, the San Francisco Chronicle reported, citing unidentified sources.
Houston-based El Paso suggested the report was premature. ``We do not have a settlement, and therefore it would be inappropriate to comment at this time,″ a company spokesman said Thursday.
Still, shares of El Paso jumped 90 cents, or 16.4 percent, to close Thursday at $6.40 on the New York Stock Exchange.
The newspaper report said the settlement calls for El Paso to offer $1 billion in aggregate discounts on natural gas and power purchases to California consumers over the next 20 years. It was unknown how those discounts could affect the prices California consumers pay for natural gas.
The settlement also would include a lump-sum payment of $225 million to several California government agencies and private businesses in cash and stock, the newspaper said, and an additional $440 million in cash paid out to the same parties over the next 20 years.
It would also include a $100 million payment to other Western states, including Nevada, Oregon and Washington, the Chronicle said.
Also, the report said top El Paso executives who were paid $2 million in bonuses as a reward for the company’s profits during California’s energy crisis would forfeit that money.
The settlement is still about $2 billion less than the amount California claims it’s owed by El Paso. California officials allege the state was overcharged $3.7 billion in 2000 and 2001.