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Allegheny seeking lawsuit dismissal

March 05, 2003|by JULIE E. GREENE

julieg@herald-mail.com

Allegheny Energy Supply Co. filed a motion late Monday to dismiss a breach of contract lawsuit filed by a California agency over two contracts, company spokeswoman Janice Lantz said Tuesday.

Allegheny Energy Supply is the energy trading subsidiary of Allegheny Energy Inc.

The California Department of Water Resources filed the lawsuit in the Superior Court of California in Sacramento County on Jan. 29.

The filing of Allegheny's motion to dismiss could not be confirmed Tuesday because the Superior Court had a backlog of filings to process after a fire, according to the court's media relations office. In California, the motion is referred to as a motion to demur.

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Allegheny officials contend the issue of whether the two contracts should stand should be settled by the Federal Energy Regulatory Commission and not the court, according to a copy of the filing provided by Allegheny.

The FERC could decide that case as soon as this week, Lantz has said.

At issue are two energy contracts California and Allegheny signed in March 2001, when energy prices were much higher because of an energy crisis. California officials want the contracts voided or restructured with lower prices.

The larger of the two contracts is a $1.3 billion asset for Allegheny Energy. When that contract was signed, the company said it would be worth $4.5 billion during its 11-year term, Lantz has said.

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