EVERETT – U.S. Sen. Maria Cantwell and state Attorney General Christine Gregoire lashed out at federal regulators on Wednesday for not protecting customers from Enron, while Snohomish County PUD took steps to solidify its role as a leader in a nationwide fight against the bankrupt energy marketer.
From the PUD’s headquarters in downtown Everett, Cantwell, a Democrat who lives in Edmonds, and Gregoire, a candidate for governor, came out swinging at the Federal Energy Regulatory Commission. They said FERC needs to fulfill its role as a citizen protector by invalidating Enron’s claim that the PUD and a handful of other utilities owe it as much as $800 million.
Both said it’s unconscionable that Enron is trying to get even more money from the same utilities it intentionally manipulated into signing high-priced energy contracts during the 2000-01 West Coast energy crisis.
Cantwell said FERC simply needs to “do its job.”
“Basically, they’re the policeman on the beat, and they’re not doing anything while Enron’s mugging the ratepayers of Snohomish County,” Cantwell said.
Cantwell, Gregoire and PUD officials said they were encouraged when FERC announced July 22 that Enron had illegally manipulated electricity prices from 1997 to 2003 and that all the profits the bankrupt energy broker made from selling power during that span may have to be refunded.
However, they said FERC was decidedly murky on what PUD officials care about most – whether the federal agency’s ruling invalidates a $122 million claim Enron has against the PUD. That money is part of $800 million that 14 utilities could be required to pay Enron for their early cancellation of similar energy contracts when Enron filed for bankruptcy in 2001, Enron officials say.
To clear things up, the PUD on Wednesday filed a request with FERC asking it if the July 22 ruling applies to the $800 million in Enron claims. Utilities from Nevada and California are among those that added their names to the filing.
Gregoire on Wednesday filed a separate petition to give the state a seat at the table when a FERC administrative law judge uses the July 22 ruling to determine how much in refunds Enron will actually have to pay.
The Snohomish County PUD estimates that Enron made more than $30 million in profits from the PUD between 1997 to 2003, and California officials say Enron made more than $3 billion in profits nationwide during that span.
If other PUDs attempt to seek refunds from Enron, “we stand ready to support them,” Gregoire said.
Still, even if the FERC judge, Isaac Benkin, rules that all of Enron’s profits must be refunded, PUD officials expect little of that cash to return to Snohomish County because Enron is under federal bankruptcy court protection.
The PUD is much more concerned with not having to pay Enron any more money. Cynthia First, PUD Commission president, said Wednesday that fending off Enron will help the PUD avoid raising rates.
The PUD’s rates are among the highest in the state, after going up about 50 percent in 2001. If the PUD is forced to pay Enron $122 million, it could cost the utility’s 295,000 customers about $420 each.
Enron maintains that the PUD canceled the contract illegally, and that it needs the cash to pay creditors in its ongoing bankruptcy proceeding.
“We’re reviewing the filing and will respond at the commission as appropriate,” said Jennifer Lowney, an Enron spokeswoman.
FERC spokesman Bryan Lee said he couldn’t comment on a filing before the commission.
“The importance of the issue for Snohomish County is not lost on the commission,” he said.
Reporter Lukas Velush: 425-339-3449 or lvelush@ heraldnet.com.
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