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Attorney General Reaches $102 Million Settlement With Natural Gas Marketer

January 12, 2018

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

California Attorney General (AG) Xavier Becerra announced a $102 million settlement with BP Energy Company and affiliates (BP) over allegations, as described by the AG's office, "that it intentionally overcharged the State of California for natural gas that the State purchased under three successive contracts from March 2003 to August 2012."

The AG alleged in a news release that, "The contracts allowed the California Department of General Services, which buys natural gas for numerous state agencies and political subdivisions, to cap the price it would pay BP for specific volumes of gas. BP regularly quoted and charged the State of California prices that violated this cap and concealed its overpricing by providing false and misleading information. These acts constitute violations of the California False Claims Act."

BP provided the following statement concerning the settlement:

"BP is the largest marketer of natural gas in North America, reliably and safely supplying energy to thousands of customers, including for many years California. As BP has stated consistently, the state’s allegations were entirely without merit. BP strongly believes it honestly and fairly met its obligations under its contracts with the state. The state’s Department of General Services confirmed its agreement to the terms of each transaction, and the state never attempted to exercise its right to seek price quotes from alternative suppliers as a result of any price provided by BP.

"But given the cost of protracted litigation and the unpredictability of outcomes at trial, BP has agreed to this compromise settlement for an amount well below what the state demanded in its complaint. We believe resolving this dispute in this manner is in the best interest of BP and its shareholders."

The AG said that the case began on July 3, 2012, when a former employee filed a complaint alleging the overcharges.

Under the settlement, BP is to pay $102 million in damages, which will be shared by the state and local agencies that purchased gas under the contracts, the former employee whistleblower, and the Attorney General’s office.

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