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An energy company accused of gouging California consumers has reached an agreement to settle several lawsuits and free it from more state-sponsored and private litigation, state Attorney General Bill Lockyer’s office announced Monday. Williams Energy Marketing & Trading Co., based in Tulsa, Okla., is one of several energy companies accused of unfair business practices that led to the state’s energy crisis, which culminated in blackouts in summer 2001. The settlement saves California $1.4 billion in the 10-year contract it had negotiated with Williams. That contract was originally $4.3 billion. The settlement also sets aside $15 million in fees for attorneys representing private parties, water districts and cities and counties that had sued Williams. “We think it’s a fair settlement given Williams’ very poor financial condition and ability to pay and the fact that the state was saddled with some very expensive long-term contracts,” said Barry Himmelstein, partner in San Francisco’s Lieff Cabraser Heimann & Bernstein. Himmelstein called the settlement the “first out in a massive case.” Lieff Cabraser named Williams in a suit filed in San Francisco Superior Court, Pier 23 Restaurant and Oscar’s Photo Lab v. PG&E Energy Trading, 308120. The firm is one of several expected to share in the attorney fees. Williams also agreed to pay $417 million to the state — $180 million in contract price reductions and $90 million in combustion turbines that will be divided among San Diego and San Francisco. Lockyer’s office said San Francisco’s turbines would help the city by allowing it to shut down a polluting plant at Hunters Point. Supervising Deputy Attorney General Ken Alex also said he hoped the settlement would convince other power companies to renegotiate contracts with the state and settle lawsuits. But he declined to discuss the specifics of any ongoing talks with other power providers. Lockyer currently is pursuing several suits and criminal investigations, and the U.S. Attorney’s Office recently sent out subpoenas indicating a federal grand jury investigation into the causes of California’s power woes. Himmelstein was not as optimistic that Monday’s announcement would lead to other settlements in the civil actions. However, he pointed out that the agreement requires Williams to tell what it knows about utility companies unfairly playing the markets. “Williams [must] cooperate with us in learning the extent of manipulation or a joint effort to manipulate the market. This agreement would obligate them to come forward with this other information . . . to help in other cases,” Himmelstein said. Besides facing the scrutiny of regulators, Williams was named in several lawsuits filed privately and in two suits filed by Lockyer’s office. “Today’s settlement is a result of the productive dialogue we’ve had with California officials since we reached an agreement in principle in July,” Williams CEO Steven Malcolm said in a statement. Himmelstein’s case, which has several more defendants, was consolidated into Wholesale Electricity Antitrust Cases I & II, Judicial Council Coordination Proceeding Nos. 4202-00005 and 4202-00006.

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