PUD pleads to Senate for relief

By Jennifer Langston

Herald Writer

PUD Commissioner Cynthia First told U.S. senators on Wednesday about an elderly Snohomish County woman who wore three pairs of overalls and two sweaters in her home to keep warm this winter.

She described a woman living in a double-wide mobile home who used up most of her monthly Social Security check to pay a $747 electricity bill.

She outlined a $200,000 increase in energy costs at the Edmonds School District, which would have paid for four teachers’ salaries.

First testified before the U.S. Senate Energy and Natural Resources Committee during a hearing on Enron’s involvement in steep run-ups of Western energy markets.

"While the voices of consumers are not often heard above the din of abstract policy debates in Washington, D.C., their cries for relief and their anger are very real," First said.

"PUD customers are reeling from $300 million in artificially inflated energy contracts due to the scheming of Enron and other power marketers."

The hearing comes on the heels of memos disclosed last week describing how Enron and possibly other companies created phantom congestion and engaged in sham sales to drive up energy prices.

The Snohomish County PUD is trying to get out of long-term contracts signed with Enron and two other power sellers in early 2001, when energy prices soared.

It unilaterally canceled the Enron contract when the company declared bankruptcy and has appealed to the Federal Energy Regulatory Commission to void two others.

Successfully getting out of all three contracts would save each PUD customer roughly $1,100 over the next seven years.

The PUD was joined by Seattle City Light and Tacoma Power this week in asking FERC to reconsider a similar argument that the utilities should receive refunds for energy purchased during the same time period.

An administrative law judge previously had ruled that the utilities’ plight was the result of their own risky choices, not the fault of a dysfunctional market.

The PUD and others maintain the Enron memos prove what they suspected all along — that power marketers were artificially inflating prices during the "energy crisis" to profit on the backs of consumers.

First also told the Senate that the utility questions whether FERC can be trusted to protect people in the future from similar abuses.

She testified along with FERC chairman Pat Wood, Enron representatives, other power sellers and the Los Angeles Department of Water and Power.

"Our skepticism is only deepened by recent revelations demonstrating that FERC knew as early as 1999 about the kinds of abuses detailed in the recently revealed Enron memos yet turned a blind eye for two years," First told the committee.

U.S. Sen. Maria Cantwell, D-Wash., who sits on the energy committee and invited First to testify, said she is pushing FERC to void the long-term contracts and provide relief to Northwest ratepayers.

Cantwell and Sen. Patty Murray, D-Wash., also have called on the Justice Department to conduct an investigation into Enron’s manipulation of the Western energy markets.

"Enron intentionally manipulated energy markets, contributing to last year’s energy crisis and double-digit increases that are still with us today and will be for years to come," Cantwell said. "Yet Enron continues to hold hundreds of millions of dollars in artificially inflated long-term contracts with the Northwest."

Al Aldrich, the PUD’s government affairs director, said that no firm commitments were reached. But he said the utility found a sympathetic ear in Western senators who pledged not to drop the issue.

"As far as we can tell, FERC would like to deflect this and not give remedy to our problems," he said. "We are insisting that they understand and properly deal with this bad situation that we got left in because they weren’t doing their jobs."

You can call Herald Writer Jennifer Langston at 425-339-3452 or send e-mail to langston@heraldnet.com.

Snohomish County PUD is trying to void or renegotiate expensive contracts with Enron and two other power marketers signed during last year’s so-called energy crisis. Recently released memos outlining Enron’s strategies to manipulate energy prices may help its case. Voiding all three contracts would save the utility about $300 million, or about $1,100 for each PUD customer over the next seven years.