Enron battle heats up near home

The Federal Energy Regulatory Commission stood by three years ago while Enron Corp. and its co-conspirators robbed West Coast electricity consumers of billions of dollars. Despite the commission’s clear authority to block the imposition of unjust and unreasonable power rates, the regulators allowed prices to soar up to 50 times normal levels. When the commission finally did act, prices plunged.

But the commission has done woefully little since then to hold the rogues to account, instead focusing on grandiose plans to impose a single deregulatory framework on utilities all over the United States, with FERC at its center.

In fact, last month the commission ordered California to refund $270 million to Enron and others who purchased surplus power owned by the state. California has tried to get FERC to order $9 billion in refunds from the energy companies.

Meanwhile, many Western utilities are stuck with long-term electricity supply contracts that locked in prices at inflated levels. Their customers are stuck paying off those contracts. Or not, if you happen to be a customer of the Snohomish Public Utility District.

The PUD, as the associated story reports, has refused to honor a $122 million contract with Enron. The utility’s justification boils down to this; Enron cheated, we will not reward cheating. So Enron sued.

Also, the PUD sought relief from that contract at FERC, which had thousands of hours of audiotapes that create a record of energy trades — and much more.

The transcripts of conversations between Enron energy traders would shame decent folks. Sen. Maria Cantwell says some are downright pornographic, and that’s not much of a bleeping exaggeration. But fraternity house language is the least of the sins committed by traders who reveled in the economic mayhem there were creating. Their pranks helped cost thousands of aluminum and paper industry workers their jobs.

It may be that even FERC can be shamed. Thursday, members directed staff to review the transcripts and other material submitted by the PUD, and recommend possible action. This by a commission that tried to block PUD access to the tapes.

Cantwell says the review is a start, and that’s about all. The senator has become chief scold of the commission, and of Chairman Patrick Wood in particular. He acknowledges markets were manipulated, that Enron was among the manipulators, but refuses to provide any relief to consumers.

“How can we say we’re going to let fraudulent contracts stand?” she asks. “We’re letting these guys off the hook.”

And, so far anyway, turning to the courts has not helped, nor did a complaint filed with the Inspector General regarding a Wood conversation with Wall Street analysts. Forget Congress. The House of Representatives earlier this month passed — for the third time — an Energy bill fat with subsidies for industry, thin on any consumer protections. The Senate has rejected the bill twice.

Representatives also stripped from a farm appropriations bill a provision that would have specifically forbidden energy market manipulation. A stand-alone bill that would do the same thing has gone nowhere.

“I am amazed that we have been denied relief at every step of the process,” says a frustrated Cantwell, who is among the 290,000 Snohomish customers who will have to cough up $420 each to make good on the Enron contract if the courts compel payment

The PUD did get some legal support Thursday from California, where Attorney General BillLockyer sued Enron for restitution and damages due to the misbehavior captured on the tapes. But California has waged a long war with FERC, alleging overcharging by Enron and others, so far without much success or sympathy. It was that state’s misguided attempt at electricity market deregulation that opened the doors to “Star Wars,” “Fat Boy” and the other schemes that enriched Enron Chairman Kenneth Lay at the expense of “Grandma Millie,” the powerless consumer company traders so gleefully mugged.

Conversations involving traders with Avista Corp. subsidiaries turn up on a few of the tapes. FERC earlier this year concluded a 19-month investigation of Avista’s role in one Enron scam by exonerating the Spokane company. Appeals are pending. Avista trades with Enron were more or less square when the Houston energy giant imploded.

The 2000-2001 electricity supply crisis was only partially a result of trader shenanigans. Power was scarce, so prices went up. Since then, some utilities, notably the Bonneville Power Administration, settled their Enron contracts for pennies on the dollar.

Snohomish and others have dug in their heels. The billions already paid on contracts signed during a period of extreme duress are gone for good. If FERC chooses not to help stop the bleeding, it could at least not obstruct those trying to make their own cases for relief.