The Snohomish County PUD hasn’t won its fight with Enron Corp., but officials at the utility believe they’ve got the upper hand in the battle.
“It’s a war,” said Mike Gianunzio, the public utility district’s general counsel. “We’re not going to quit until we win.”
And the prize is money.
Enron says the PUD owes it $122 million. PUD officials say they won’t pay.
The fight started out in Snohomish County’s ring but has mushroomed onto the national arena as several contenders vie to hold Enron accountable for its role in the 2000-01 West Coast energy crisis.
One of the weapons the PUD has used to avoid paying Enron is discovered transcripts of taped conversations in which Enron traders gleefully discussed how they intentionally manipulated electricity prices upward as they sold power to utilities such as the PUD.
The national media took the PUD’s lead and honed in on the transcripts, opening a door that public utility officials thought would force federal energy regulators to invalidate Enron’s claim against the PUD.
But those regulators never took that route, even after the PUD uncovered a transcript that had Enron traders talking specifically about jacking up the price of the electricity they ended up selling to the public utility.
That wasn’t enough ammunition to sway the Federal Energy Regulatory Commission to take action.
FERC’s reason? Commission officials said they didn’t have the authority to retroactively cancel contracts, though they acknowledged that Enron acted illegally when it signed the PUD contract.
That defense may have been tossed to the curb last week, however, when the 9th Circuit Court of Appeals ruled that FERC does have the authority to retroactively cancel contracts that Enron signed when it was manipulating electricity prices during the energy crisis.
“This was very strong, direct language,” said U.S. Rep. Jay Inslee, D-Wash.
Inslee and Rep. Rick Larsen, D-Wash., introduced legislation last week that would prevent Enron from collecting any more money from the PUD.
Because of partisan politics and the upcoming election, Inslee acknowledged that the measure has little chance of passing this fall. Still, he said the bill and the court decision could help push FERC to duke it out with Enron.
At this point it’s not clear what action FERC will take, but it will likely review the 9th Circuit Court’s decision to see if it applies to contracts such as the PUD’s agreement with Enron.
“We think we’re making progress,” Inslee said. “We hope this dam will break.”
Enron spokeswoman Jennifer Lowney said Enron would not comment on the money battle.
Reporter Lukas Velush: 425-339-3449 or lvelush@heraldnet.com.
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