FLASHBACK
Two power firms held in contempt by state Senate panel
Enron, Mirant cited over subpoenaed documents
Lynda Gledhill, Chronicle Sacramento Bureau
Friday, June 29, 2001
©2002 San Francisco Chronicle
URL: sfgate.com
Sacramento -- A state Senate committee held Enron and Mirant corporations in contempt yesterday for not turning over subpoenaed documents as six other energy companies made frantic, last-minute deals to comply with the lawmakers' orders.
The contempt finding is the first of its kind since 1929 when a Senate panel investigating price fixing in cement prices briefly jailed a Portland businessman for refusing to comply with a subpoena.
"Jailing is an option and we preserve all options at this point," said state Sen. Joe Dunn, D-Santa Ana, the chairman of the committee investigating charges of price manipulation in the wholesale electricity market.
Although Dunn's committee voted 5 to 0 to find the companies in contempt, the panel will decide July 10 whether to ask the full Senate to issue sanctions against Enron and Mirant.
Dunn's committee requested documents from power providers in early April. When the requests were ignored, the committee issued subpoenas on June 11 asking generators for documents covering business plans, operations, risk management, and investment strategies.
Based on their pledges yesterday to cooperate with the committee, six energy providers escaped contempt citations and were given until July 10 to comply with the orders. All of the companies cited concerns about confidentiality of the documents.
As committee members met, generators' lawyers stepped into hallways and made hurried calls from cell phones to their corporate headquarters, and one company delivered a truckload of documents to the Capitol.
"While we have received certain documents today, we have no idea what has been given to us," Dunn said. "That it has taken until today to get these responses is unfortunate and disturbing."
Enron drew most of the wrath from the committee after sending only a letter questioning the committee's jurisdiction. The company also criticized an investigation by Attorney General Bill Lockyer, which company officials called "fatally and irreparably compromised" by what it said was blatant bias.
Lockyer has said in published articles that the heads of some of the power generating companies, like Enron, should go to jail.
Lawmakers took Enron to task for not bothering to send a representative to the hearing.
"There is clearly a stark contrast in the conduct in the marketplace between Enron and other companies," said Sen. Steve Peace, D-El Cajon. "The irony of the Enron letter is that they were the architect of the whole (deregulation) concept."
An Enron spokeswoman reached after the hearing declined to comment.
An attorney for Duke told lawmakers his company would agree to place all requested documents in a Sacramento depository for the committee to review.
He also agreed that except for a few minor changes the company would agree to a proposed confidentiality agreement.
Under the plan, information such as trade secrets and other proprietary information would be kept confidential and companies would receive a 10-day notice if the committee planned to make public any confidential materials. The company would then have that time to ask for a court order preventing any release.
A lawyer for Williams Energy agreed to the same conditions as Duke, and an attorney for Mirant pursued a similar strategy but stopped short of pledging that all documents would be made available.
A Mirant spokesman said later that the company has compiled thousands of pages of documents and will continue to work with the committee.
"We want some assurance from committee that the documents will not end up in some public forum where they could be misused," said Patrick Dorinson.
If Mirant or Enron comply with the subpoena before the July 10 hearing, the contempt citation will be rescinded, Dunn said.
As the committee met, it received boxes from Dynegy containing 18,000 pages,
plus 1,800 documents from Reliant. Two other companies, AES and NRG Energy Inc., were given an extension because the requests for their documents were made later.
The committee will review the documents before July 10 to see if those companies have complied, Dunn said.
The last time the Legislature found someone in contempt was 72 years ago when H.T. Battelle of the Pacific Portland Cement Co. was thrown in jail for ignoring a Senate subpoena.
Dunn said it is not clear what the Senate would do in this case.
The Democratic lawmaker's committee made national headlines last week when three former employees of a Duke power plant testified that they were told to ramp power production up and down in an apparent attempt to manipulate electricity prices. Duke countered that it was merely following the orders of the state's power grid operators.
E-mail Lynda Gledhill at lgledhill@sfchronicle.com.
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