EVERETT – Still celebrating their victory over Enron Corp., Snohomish County PUD officials on Thursday said a second legal battle with the bankrupt energy trader is still alive.
Federal energy regulators on Wednesday ruled that the public utility district doesn’t have to pay millions for canceling an energy contract in 2001, during the height of the West Coast energy crisis.
For canceling the contract early, Enron argued that the PUD owed it $117 million, plus five years of interest, which put the bill between $140 million and $180 million.
PUD officials remained jubilant Thursday because in its ruling, the Federal Energy Regulatory Commission said Enron used fraud when it sold electricity to the utility in 2000.
That should make it more difficult for Enron to win an appeal.
“We anticipate that it’s going to be challenged,” said Steve Klein, PUD general manager.
An Enron spokeswoman reached Thursday declined to comment.
High electricity prices during the energy crisis contributed heavily to the PUD’s rates shooting up by more than 50 percent. The utility’s 300,000 customers are still stuck with those high rates.
Meanwhile, in Wednesday’s ruling, FERC let stand a lawsuit the PUD has against Enron, leaving the utility free to take Enron to court.
The PUD estimates it was overcharged $23 million by Enron before canceling its contract. Some of that total stems from smaller one-time blocks of electricity the PUD bought from Enron.
Other West Coast utilities, including some in Washington state, have settled similar lawsuits with Enron, but have no guarantee of getting any cash back from the bankruptcy trustee.
In those cases, the utilities agreed to have a seat at the table when bankruptcy court starts divvying up any Enron assets, Klein said.
If the PUD wins or settles that case with Enron, it can expect to get back only pennies on the dollar, he said.
Several other PUD lawsuits were dismissed by the energy regulatory agency on Wednesday. Those claimed that Enron owed the PUD more than $100 million for manipulating energy prices during the 2000-01 West Coast energy crisis.
“We’ve got evaluate why those we’re taken away,” said Mike Gianunzio, the PUD’s general counsel.
Question: The PUD won its fight with Enron Corp. Will my rates go down? Do I get a refund?
Answer: No on both counts. In winning the fight, the PUD avoids having to pay Enron between $140 million and $180 million. Since you havent paid that money in your energy bill, you dont get a refund. However, it does lower the pressure to raise rates in the future.
Question: What happens if Enron appeals?
Answer: Enron can appeal to the Federal Energy Regulatory Commission or U.S. District Court. PUD officials like their chances because FERC said that Enron defrauded the PUD, along with many others.
Question: Whats next?
Answer: The PUD will fight to try to make sure the win over Enron sticks. It also will continue to try to get refunds for overpriced electricity it bought from Enron before severing ties with the bankrupt energy trader.
Source: Snohomish County PUD and the Federal Energy Regulatory Commission