The feds kicking California when they're down

Discussion in 'Current Events' started by DKSuddeth, Jun 17, 2004.

  1. DKSuddeth

    DKSuddeth Senior Member

    Oct 20, 2003
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    North Texas
    A refund for Enron outrages California
    Associated Press

    • CBS report: First tapes released of phone conversations from Enron's trading desk during California's energy crisis. "He steals money from California to the tune of about a million," one admiring trader says of another.
    Courtesy of KHOU-TV. Requires Windows Media Player
    Snippets of more Enron tapes released by the Snohomish County Public Utility District, a Washington utility defending itself against a breach-of-contract suit from Enron.
    • Creating power line congestion: "If the line's not congested, then I just look to congest it...If you can congest it, that's a money maker."
    • Hiding true source of power from utility? "So technically, Western will see it, but it's bouncing out -- just in and out of their system . . . a ricochet."
    Requires Real Player.

    • Graphic: What happened in California

    • Photo gallery of key players: Who's been convicted, indicted or accused in Enron scandal. And who's doing the accusing.
    • Enron timeline

    • Archives of Chronicle's Enron coverage with additional resources
    • Legal documents on Enron compiled by FindLaw
    (PDF files require Acrobat Reader)

    SACRAMENTO, Calif. — As California struggled through the 2000-2001 energy crisis, Enron traders gloated about gouging the state. Now state Attorney General Bill Lockyer says federal regulators are heaping insult upon injury by demanding California pay Houston-based Enron and other energy companies almost $270 million in refunds.

    In a motion filed with the Federal Energy Regulatory Commission, Lockyer said the refunds would reward "the sellers a second time for their market manipulation activities and predatory pricing."

    The order was particularly unfair considering recent evidence of market manipulation by energy generators, Lockyer said.

    Transcripts have been released of Enron traders openly and gleefully discussing creating congestion on transmission lines, taking power plants off-line to pump up electricity prices and other manipulation of the California power market.

    At issue are megawatts bought and sold through the Independent System Operator, the manager of the state's power grid.

    The May order makes it clear that the agency's refund order includes $2.9 billion worth of electricity purchases made by California energy traders in 2001, when the state stepped in to buy power on behalf of three nearly bankrupt utilities.

    In his filing on Monday, Lockyer said the state's power buys helped the ISO secure enough energy to keep the lights on. State buyers bought power at the high market price then resold it at the state's cost "in order to protect California's electricity grid from blackouts."

    Most of the state's electricity purchases were used by Pacific Gas and Electric, Southern California Edison and San Diego Gas & Electric. But some of the power sold into the ISO market was bought by other energy companies, such as Enron. Those are the sales subject to the refund order.

    FERC spokesman Bryan Lee said he couldn't comment because the matter was pending before the commission. But in its order, FERC said the state's power trades should be treated the same as other wholesalers.

    Because the state bought a lot of power, it will be entitled to refunds nearly equal to what it has to pay in refunds, FERC said.

    The refunds California could have to pay would go to a variety of energy traders and wholesalers, including Enron, $23 million; Reliant Energy, $33.7 million; Williams Cos., $25 million; Dynegy, $16.1 million; Mirant, $26.7 million; and Duke, $33.2 million.

    Enron spokeswoman Karen Denne said the company's lawyers hadn't seen Lockyer's motion and any response would be filed with FERC.

    Enron due a refund from california, after gouging them for billions

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