Strike another blow for Snohomish County PUD in its fight with Enron Corp., the bankrupt energy trader that claims the PUD owes it $122 million.
Enron’s bankruptcy lawyers cannot demand that the PUD pay up, thanks to a measure by U.S. Sen. Maria Cantwell that survived Monday night negotiations over what will be included in the new federal energy bill.
“The public interest prevailed over the special interests that want to pick the pockets of Washington consumers yet again,” said Cantwell, D-Wash., who sits on the Senate Energy Committee.
But to stay out of Enron’s bankruptcy proceeding for good, the PUD must first win its case in a Federal Energy Regulatory Commission court.
Without the Cantwell provision, Enron’s bankruptcy lawyers could have demanded that the PUD pay before the FERC proceeding runs its course, something that will likely stretch well into 2006.
Enron says the PUD owes it $122 million plus interest for the early cancellation of a contract the utility signed to buy electricity in 2001 at the height of the West Coast energy crisis. The PUD canceled the contract when it appeared Enron was heading into bankruptcy and would be unable to deliver the electricity.
Since then, the PUD has fought Enron’s claim, in the process digging up troves of evidence that suggest the failed energy trader’s market manipulations cost West Coast utilities more than $1 billion.
The House of Representatives is expected to adopt the energy bill today, and the Senate on Thursday. President Bush is expected to sign it next week, said Al Aldrich, the PUD’s government affairs director.
Although the bill isn’t yet law, Cantwell’s measure is in no danger of being dropped because the bill cannot be changed at this point without going back to the drawing board.
“This is a pretty significant victory for us, because it lets us have our day at FERC,” Aldrich said.
That’s where the PUD hopes to put Enron’s claim against the utility to rest for good.
“We’re confident that our evidence is very strong,” said Neil Neroutsos, a PUD spokesman.
Monday’s late-night negotiations involved getting House and Senate energy leaders together to smooth over differences in the two energy bills.
Cantwell’s measure, which blocks energy traders from forcing utilities to pay for canceling energy crisis-era contracts early, was not in the House bill, and members of the House team fought to keep it out. Enron also hired a lobbyist to try to kill the measure.
“I congratulate Sen. Cantwell for her hard work, and the entire Washington state delegation for its unified stand against Enron’s fraud,” said U.S. Rep. Jay Inslee, D-Wash.
Last week, Inslee led an effort to get the state delegation to sign a letter supporting the provision.
Cantwell also received key support from legislators from Nevada and California, states with utilities that Enron is going after under similar conditions.
Enron’s spokeswoman did not respond to a request for comment.
Reporter Lukas Velush: 425-339-3449 or lvelush@ heraldnet.com.
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