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Pastimes : The California Energy Crisis - Information & Forum -- Ignore unavailable to you. Want to Upgrade?

To: Bearcatbob who wrote (1676)	7/23/2004 6:15:34 AM
From: Glenn Petersen	Respond to of 1715

U.S. May Mandate Refunds by Enron A federal energy panel, under pressure, may order the firm to give up five years of profit. latimes.com By Jonathan Peterson, Times Staff Writer WASHINGTON — The Federal Energy Regulatory Commission, reacting to renewed anger about the 2000-01 energy crisis, indicated Thursday that it might order Enron Corp. to return more than five years' profit from its sales in the West. The surprise warning, contained in an order that Enron forfeit $32.5 million in unjust profit from the crisis, held out the possibility that sanctions — and, potentially, refunds — could increase by many millions of dollars. FERC is under acute pressure to punish Enron, the one-time energy giant that is operating under Bankruptcy Court protection. As evidence that Enron sought to exploit the California marketplace has continued to pour forth, so has criticism that the federal panel failed to respond effectively as the crisis unfolded and moved timidly on refunds to ratepayers for alleged electricity overcharges by power suppliers. But though FERC's move was viewed by some as signaling a change of heart, Enron's financial status adds uncertainty to what the Houston company ultimately would ever actually pay out. "California's not going to break out the party hats and pop the champagne corks because FERC's doing its job," said Tom Dresslar, spokesman for state Atty. Gen. Bill Lockyer, who has filed a lawsuit accusing Enron of market abuses. "We're gratified they're fulfilling their statutory duty. But it's certainly no cause for celebration." In Thursday's order, the federal commission asked an administrative law judge to preside over several Enron cases previously assigned to other judges. The commissioners pointedly gave the judge the option of ordering Enron to turn over unjust profits gained in the West from mid-January 1997 to late June 2003 — a period that greatly exceeds the roughly yearlong span of California's energy fracas. "We believe this is one step forward to bringing an end to the California energy crisis, and we want to get money back in customers' pockets as quickly as possible," FERC spokesman Kevin Cadden said. The commission had expected to complete its various Enron proceedings by the end of this year, and Cadden said he didn't know how Thursday's order would affect that timing. Experts have advised FERC that Enron's profit from Western power trading may have been as high as $124 million for the 1997-2003 period, but Lockyer and others have claimed that it exceeds $1 billion. Whatever the figure, the amount that could end up in the hands of ratepayers remains uncertain. Enron's creditors, who are demanding $63 billion from a firm that has about $12 billion to offer them, are expected to get less than 20 cents on the dollar. For all the unknowns, some observers said it was significant that the regulatory panel had effectively taken the gloves off with Enron. As recently as May, FERC ordered California to pay $23 million to Enron for power purchases during the crisis, a ruling that enraged its critics. At about the same time, a utility in Washington state engaged in a legal battle with Enron over publicized recordings in which Enron employees bragged about their plans to exploit California. Thursday's order suggested to some that, in the wake of those recent uproars, the regulatory panel was viewing Enron in a more critical light and had embraced a more expansive view of refunds. "This is a big deal," said Roger Berliner, a lawyer for municipalities and utilities in Enron litigation. "It's a big deal because Enron made a lot of money from a lot of people at a time when it was unlawfully manipulating the market. This order makes it clear that Enron can and will be held accountable." In FERC's principal refund proceeding, which involves various companies, regulators have insisted that federal law limits relief to a period beginning in October 2000, thereby leaving out the soaring prices of the preceding summer months. With the panel officially sticking to that view — and apparently heading toward an overall refund number that may be one third of the $8.9 billion sought by California officials — consumer advocates remained dismayed. Thursday's ruling did little to change the view that FERC continues to treat energy violators too gently. "My anger at the FERC is based upon the agency's willingness to target Enron — because it is out of the picture — but continue to protect the other energy companies who feasted at the same trough as Enron's traders," said Michael Shames, executive director of the Utility Consumers' Action Network in San Diego. The continuing complaints from the West have become a matter of some sensitivity inside the commission, and regulators released the ruling Thursday just moments before FERC Chairman Patrick Wood III met behind closed doors on Capitol Hill with senators from Washington, Oregon and Nevada, all of whom have complaints dating back to the energy crisis. "There definitely was a sense that FERC didn't want to walk into that meeting empty handed," said Charla Neuman, a press aide to U.S. Sen. Maria Cantwell (D-Wash.). At the session, Cantwell pressed Wood on what she could tell ratepayers about possible refunds. Enron has sued the Seattle-area Snohomish County Public Utility District for $122 million in disputed charges. Under Thursday's order, Enron must pay $32.5 million into a Treasury Department fund, where it ultimately will be disbursed to ratepayers, although the details were not known Thursday. Enron gained the profit as a result of a deal it had made to control facilities of El Paso Electric Co. Enron spokeswoman Karen Denne said the company was reviewing the order and declined to comment further.