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FOR IMMEDIATE RELEASE
June 26, 2003
States, El Paso Settle Energy Investigation

OLYMPIA -- Washington and El Paso Corp. today signed an agreement settling the state's claims that the natural gas company manipulated gas prices and abused its market position during the West Coast's 2000-2001 energy crisis.

The settlement, which also was signed by Oregon, California, Nevada and several other public and private parties, follows a memorandum of understanding the parties reached with El Paso in March.

Under today's final agreement, El Paso will pay Washington $21.3 million, including a $7,193,420 "up front" payment, and biannual payments of $707,346 over the next 20 years. The up front payment is expected to be made sometime during the next six to 12 months.

The states claimed that El Paso manipulated energy prices by artificially reducing the supply of natural gas. Since California generates much of its electricity by burning natural gas, the artificially high gas prices led to inflated costs for California power, which in turn was purchased by Washington utilities during the energy crisis.

California, Oregon and Washington have been conducting an investigation into circumstances surrounding energy price spikes in the fall and winter of 2000-2001. That investigation led to a settlement with one other company, Williams Energy Marketing and Trading Co., which agreed to pay Washington $15 million over three years.

A committee consisting of consumer and industry representatives and others has been established to determine how the money should be distributed. Individual customers will not receive direct restitution because the total number of customers is so large that they would only receive a few cents.

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