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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Mannie who wrote (47820)	2/20/2002 7:41:03 PM
From: stockman_scott	Read Replies (2) \| Respond to of 65232

<<Da Lat Water Project update...>> Scott: Thanks for the report from the field....I owe you a check and will put one in the mail tomorrow...Thanks for coordinating this worthy project. Regards, -Scott

To: Mannie who wrote (47820)	2/26/2002 8:21:12 AM
From: stockman_scott	Respond to of 65232

It's a long road to truth about Enron seattlepi.nwsource.com Tuesday, February 26, 2002 By CHRISTINE GREGOIRE ATTORNEY GENERAL If you haven't come across it yet, prepare yourself for the new math -- Enron math. The theory is simple: Any way you tally the numbers, they don't add up for Northwest residents. For many years millions of Washington residents will be paying for the secretive, questionable and potentially illegal business practices of Enron. That's because current laws make it hard to protect consumers, even though we suspect the company manipulated energy prices, disclosed false and misleading information, misstated its financial status and hid its debt burden in off-shore tax havens. As a corporation in Chapter 11 bankruptcy, Enron remains in control of its business affairs. This allows Enron to shed contracts it feels will prevent it from achieving financial stability in the future. Enron can keep those contracts that are profitable to the company (we pay Enron), and reject those contracts that are not profitable (Enron pays us). In other words, the interests of Northwest ratepayers are irrelevant in the bankruptcy process. At the same time, our securities laws have statutes of limitations and other hurdles built in that make it difficult for us to collect damages from Enron and companies that aided in its accounting scandal. Let's look at some examples of how the Enron collapse can play out. Snohomish County PUD, at the height of last year's power crisis (which many suspect Enron helped create), agreed to buy electricity from Enron for more than $100 per megawatt hour. That contract, four times the cost of power today, will cost ratepayers $192 million over the next eight years. The PUD is attempting to terminate the contract, but since the contract is in Enron's favor, it will of course want to keep it in play. On the other hand, Seattle City Light has contracts with Enron to sell the company power at a price higher than today's rate. That is, of course, good for City Light ratepayers since the profit could be used to offset expensive power purchases made last year. But it now appears Enron wants out of these deals. Since we believe energy prices last year may have been artificially high due to market manipulation by Enron and other companies, we asked the Federal Energy Regulatory Commission to grant refunds for Northwest utility ratepayers. But even if FERC agrees the prices were unjust, now Northwest utilities will likely never see a dime from Enron because of its new bankruptcy status. Outside the power arena, we are members of a class action that is suing Enron. The suit contends Enron violated the Securities and Exchange Act by improper accounting, disclosure of false and misleading information and some outrageous insider trading. But because of the statute of limitations, we will be able to seek only about $42 million of the $112 million lost by state pension funds. The irony is that the federal statute of limitations insulates Enron even though we contend it was hiding its debt and financial problems in off-shore subsidiaries, dubious partnerships and corporate facades. Some peculiar events sparked suspicion that Enron manipulated the electricity market to drive up consumer prices and company profits. Consider the following: Wholesale market rates for a megawatt-hour of electricity skyrocketed last year from $30 to $300, even up to $3,000; Transmission capacity restraints strangely occurred at critical times; Enron was the dominant player in forward electricity markets (contracts for the long term) -- a market in which the company was not only the biggest participant but also the market-maker, so that it had access to information not available to other participants. It is curious that the price of some unregulated, long-term energy contracts in the West dropped by as much as 30 percent when Enron filed for bankruptcy. Based on these suspicions, I joined the attorneys general of California and Oregon in an investigation to determine if Enron committed antitrust law violations or unfair business practices. I wish I could tell you today what we found. But despite assurances they have nothing to hide, Enron has refused to turn over records necessary for us to determine its role in energy pricing. In fact, they fought us all the way to California's Supreme Court. We won, but we had to ask the court to hold them in contempt for withholding records. And still the records are only trickling in as Enron resists every step of the way. So we expect a long, hard fight before we find the truth about Enron. In the meantime, millions of people will pay higher costs without knowing if those costs are just and reasonable. And investors, who followed all the rules, will have been ripped off just like a naïve person who lost money in a pyramid scheme. That's Enron math. seattlepi.nwsource.com