AG Lockyer sues two power firms

Sending the ripples from the State's 5-year-old energy crisis further, California Attorney General Bill Lockyer is suing two energy firms:

The state sued two power companies Wednesday over their conduct during the energy crisis, accusing them of teaming up to cheat California out of more than $1 billion by using one of Enron Corp.'s notorious trading schemes.

The lawsuit filed by Attorney General Bill Lockyer in Sacramento Superior Court says Canada's Powerex Corp. and Public Service Co. of New Mexico used a ploy known as "megawatt laundering" to get around state-mandated price caps. The strategy was invented by now-disgraced energy trader Enron, which nicknamed it "Ricochet."

The suit represents California's latest attempt to recoup money from wholesale power generators, traders and other electricity providers over the 2000-01 energy crisis, when prices soared amid rolling blackouts. The state has obtained refunds and tentative refunds totaling roughly half of the $9 billion it says it was overcharged.

In various lawsuits and refund proceedings, California has said energy providers cheated the state in three main ways: by simply withholding power until the price was right, by engaging in "Ricochet" and other exotic trading schemes conceived by Enron, or both. Powerex, an arm of the government of British Columbia, has already been sued twice by the state in the past six months.