At a press conference in Seattle today Senator Cantwell called the latest proposal to settle Enron bankruptcy claims with Northwest ratepayers an “insult“. She berated the blatant attempt to suppress Enron evidence and the attempt to make the NW ratepayers the deep pockets for settling Enron’s bankruptcy.
The proposal drafted by Enron and FERC (Federal Energy Regulatory Commission) proposes settling for pennies on the dollar for Enron overcharges. The proposal now goes to the three FERC commissioners for approval.
The current proposal started with some $20 million in disputed overcharges to the Snohomish PUD but has been expanded to cover much more. It includes a blatant and outrageous attempt to suppress the public seeing any new Enron information and proposes suppressing current information from being used for other cases.
Enron is also trying to collect some $120 million from the Snohomish PUD for contracts that were terminated. The Enron-FERC proposal would keep sealed the documents from the current case. This would severely hinder the Snohomish PUD in presenting its case on the $120 million contract termination dispute.
FERC is supposed to regulate energy wholesale prices and by law is supposed to protect ratepayers by assuring that rates are “just and reasonable”. FERC ignored repeated requests from Western states to intervene in controlling the price spikes in 2000 and 2001 that drove electric rates as much as 100 times current prices. They made some references to a free market as their rationale. The problem was that Enron was manipulating the market. See more on FERC at Frontline’s What is FERC?
FERC’s initial look at Enron’s practices was lukewarm and failed to uncover audiotapes and other documents that now have emerged. As Senator Cantwell notes, “ The failure to uncover those audiotapes and other data raised serious questions in my mind … about the thoroughness of FERC’s investigation. Still more flags were raised when we learned that FERC staff had previously attempted to quash or exclude portions of this evidence from the record.”
Senator Cantwell continued to pursue the issue.
Finally in June 2004 former FERC Chairman Wood told Senator Cantwell and Senator Lieberman of Connecticut that some $800,000 0f taxpayer money would be committed for further investigation. Out of this additional investigation , some $1.8 billion was determined by FERC staff to be “illegal profit” As such it was supposed to be returned to ratepayers.
The current Enron-FERC proposal, if approved, would void any further action by FERC to return funds to NW ratepayers. It would also seal from public view critical evidence of Enron’s misdeeds.
Cantwell responded, “We’ve been fighting for years to get justice for Northwest ratepayers, and now the same Federal regulators who just hired an ex-Enron attorney are proposing a settlement that will give families and businesses less than one percent of what these corporate criminals took. This is an insult to hard-working families overwhelmed by years of record-high energy costs. We need honesty and fairness from energy regulators. Northwest families deserve better than a settlement that pays pennies to the dollar.”
Senator Cantwell was joined in condemning the proposal before FERC by representatives of the Snohomish and Grays Harbor PUD’s, the Port of Seattle and Ash Grove Cement.
Enron, through market manipulation, price gouging and other methods, helped to create the Western Power Crisis in 2000 and 2001 by manipulating energy markets and artificially driving up prices to exorbitant levels. Enron declared bankruptcy in Dec 2001.
Everyone thinks that California ratepayers suffered the most as a result of Enron’s manipulating the energy markets. Enron’s profit and loss statements for 2000 and 2001 actually show the opposite. Enron showed a profit of $694,580,802 for that time from the Pacific Northwest compared to $347,238,448 profit from California, a 2:1 ratio.
Northwest ratepayers took the biggest hit from Enron’s manipulation of the markets.