EVERETT – Saying that they have proof “beyond a shadow of a doubt” that Snohomish County residents shouldn’t have to pay Enron another dime, PUD officials on Monday released another wave of apparently incriminating transcripts.
Enron Corp. of Houston racked up more than $1.1 billion in illegal profits during the 2000-01 energy crisis, according to 750 pages of transcribed conversations released by Snohomish County PUD.
Enron traders admit to using half a dozen different schemes to manipulate energy prices upward during a crisis that drove electricity rates to record levels across the West. Snohomish County’s rates went up 50 percent.
The PUD hopes to use the transcripts to prove that a $200 million contract it signed with Enron during the energy crisis was illegal. The PUD canceled that contract after only eight months.
The PUD has spent more than $100,000 transcribing 1,000 hours of conversations “to have our Enron contract canceled so we don’t have to pay Enron another dime,” said Mike Gianunzio, the PUD’s general counsel.
Enron, currently in bankruptcy proceedings, is suing the PUD for $122 million for canceling that contract. Enron argues that it needs to recoup money lost from the PUD contract to pay off creditors.
“Why should Snohomish County ratepayers be their deep pockets?” Sen. Maria Cantwell, D-Wash., asked Monday. “People (in Snohomish County) can’t take another rate increase.”
The new information should force the Federal Energy Regulatory Commission to declare that the Enron-PUD contract was illegal, which would invalidate Enron’s lawsuit against the PUD, Cantwell said.
FERC spokesman Bryan Lee said in a recent interview that the transcripts will be added to an ongoing lawsuit against Enron. He was not available Monday to explain why FERC initially blocked the PUD from releasing the Enron tapes to the public.
The PUD came to the conclusion that Enron made $1.1 billion from utilities in California and the Pacific Northwest.
The PUD has stitched together hours and hours of Enron trader conversations. According to the transcripts, Enron manipulated energy markets during the energy crisis, from Jan 1., 2000, to June 20, 2001.
Translated into dollars, 88 percent of Enron’s profits during that 18 months – $1.1 billion – were gained illegally.
A small portion of that money – $16 million – was charged to the PUD. Most was made from energy users in California, where footing the bill hurt the economy and cost Gov. Gray Davis his job.
The PUD estimates that $10 million of the $16 million it paid Enron was caused by market manipulation.
That means the utility could qualify for a refund if FERC requires that refunds be paid out. Because Enron has declared bankruptcy, PUD officials don’t expect much to come from a refund.
Reporter Lukas Velush: 425-339-3449 or lvelush@heraldnet.com.
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