Lockyer sues over power price gauging

California State Attorney General Bill Lockyer is taking on Canadian Power company Powerex to recover exorbidant prices paid during California's energy crisis:

"Powerex gamed the market, then gouged the state, taxpayers and ratepayers," said California Attorney General Bill Lockyer, in a written statement. "It created conditions that allowed it to hold California businesses and consumers hostage, and left the state no choice but to pay the ransom. We want that money back."

Filed on behalf of the California Department of Water Resources in Sacramento County Superior Court, the lawsuit alleges PowerEx helped manipulate the market to inflate prices and create phony supply shortages. Powerex then overcharged the state when the agency was forced to buy energy directly from the company to balance the electricity grid and avoid blackouts, according to the complaint.

The Department of Water Resources bought energy from Powerex in so-called "out of market"transactions on thousands of occasions through most of 2001, the complaint alleges. Powerex overcharged by some $850 million on purchases that totaled $1 billion, according to Mr. Lockyer's office.