Power Regulators Probe Enron's Woes
By Karen Gaudette
Associated Press Writer
Tuesday, December 11, 2001; 7:39 PM
SAN FRANCISCO ?? California power regulators decided Tuesday to probe how Houston-based power giant Enron Corp.'s bankruptcy could affect its customers in California.
At least three Enron affiliates deliver electricity and natural gas to nearly 40,000 Golden State customers, including the University of California, the nation's largest university system, and Pacific Bell Park, home of the San Francisco Giants.
Many California businesses and institutions opted to buy their electricity from Enron rather than from their local utility. The arrangements saved many customers thousands of dollars in utility costs, particularly when power prices soared earlier this year.
But Enron's swift financial tumble and California's own energy woes make it prudent to begin looking into possible effects, said Loretta Lynch, president of the state Public Utilities Commission.
Commissioner Carl Wood said Tuesday at a PUC meeting that discussing who is served by Enron and backup plans to serve those customers will help the PUC learn whether it needs to act. He was unsure what remedies the PUC could offer at this point.
"The collapse and bankruptcy may impair Enron's ability to serve its customers in California," Wood said. "We must ensure California ratepayers are protected."
The company has sent letters to some customers saying it may be able to supply them. Affiliates in question that serve Californians include Enron Energy Services Inc., The New Power Co. and Enron Energy Marketing Corp.
Californians may not be completely out of luck. Should Enron stop supplying the Golden State, state power officials said last week they already are preparing to provide seamless electrical service to supply the 800 to 1,200 megawatts of power they'll require.
Enron, which had revenues of $100.8 billion in 2000, filed for bankruptcy Dec. 2 after a dramatic collapse triggered by revelations of questionable partnerships, four years of overstated profits and then a failed merger with rival Dynegy.
Wood said the PUC plans to share any information it learns with other state agencies that also may launch investigations into California's outlook.
California has spent billions of dollars buying electricity for customers of three utilities since January. That's when utilities began slipping into debt because a rate freeze left them unable to collect soaring energy costs from their customers.
According to the PUC, more than 80,000 Californians buy their electricity from a provider other than a local utility, a choice called direct access. Wood estimated Tuesday that at least half those customers buy from Enron.
State officials have said if Enron sends some of those customers back, it could help pay off the debt since the state bought enough electricity for everyone.
Not all Enron customers may take the state up on its offer, should they have to consider it.
Charles McFadden, a UC spokesman, said the system's contract allows it to replace Enron with another direct access provider if the power company stops delivering electricity.
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On the Net:
cpuc.ca.gov
enron.com
© 2001 The Associated Press |
