Court rules against Nevada in Enron price-fixing case

By Cy Ryan

Thursday, Sept. 27, 2012 | 6:30 p.m.

The Nevada Supreme Court has rejected the appeal of the state and consumers that natural gas and electric customers in Southern Nevada were charged inflated rates in a price-rigging scheme during the energy crisis.

The state Bureau of Consumer Protection and customers joined in filing a class-action suit that alleged Reliant Energy and its affiliated companies made "a secret deal" with now defunct bankrupt Enron Corp. that drove up natural gas prices.

The court, in an opinion authored by Chief Justice Michael Cherry, said, "Due in part to significant manipulation of the natural gas markets from 2000 to 2001, natural gas and electricity prices skyrocketed in Nevada and other Western states."

But the court agreed with District Judge Kathy Hardcastle, who dismissed the class-action suit on grounds it came under federal jurisdiction. The suit alleged Reliant of Texas violated Nevada's antitrust laws.

An investigation was conducted by the Federal Energy Regulatory Commission, which said it had jurisdiction over the sales of Reliant but found the company had not violated federal regulations.

The federal commission said its regulations lacked explicit guidelines or prohibitions against Reliant's market manipulations.

Southwest Gas in Las Vegas paid for the gas at inflated prices. And the suit maintained the "artificially inflated price of natural gas" drove up electric rates because NV Energy used natural gas to produce part of its energy.

There was no estimate in court documents of how much Las Vegas rate payers were overcharged.