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Non-Tech : The Enron Scandal - Unmoderated
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To: opalapril who wrote (2190)6/17/2002 10:20:03 PM
From: Raymond Duray   of 3602
 
opalapril,

Re: I'm not at all sure I understand power trading,

That's true for 99.999% of the population, so you're in good company. <g>

Re: but if it is true that California power was sold elsewhere at or below the cap, how is that "fraud" as you allege?

It is absolutely true that during the so-called "crisis" that about 5,000 Mws were typically exported on a daily basis. The fraud comes in when the power marketers shut down their "must serve" plants with unscheduled outages that are being investigated as fraudulent manipulations. The fraud involving interstate transmission is that once the "must serve" plants were torn off the system, the State was forced to buy electricity in the spot of day ahead markets at ruinous and unjustified rates from those who'd shipped the megawatts (on paper only) to out of state counterparties.

Re: I ask because I was not aware energy traders were barred from trading California power outside the state, or required to trade it only inside the state.

That's my understanding as well. The fraud was in the substitution of megawatts as I've described above.

Re: Of course, any trades away from California would reduce the supply and drive prices up in theory, but if they were capped anyway how does that hurt California?

I was referring specifically to market conditions prior to June 19, 2001, the date when FERC imposed wholesale electricity price caps for the Western market and ended the short squeeze and power marketers criminal behavior.

-Ray
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