Herald staff and news services
Snohomish County PUD officials and the state attorney general said Tuesday a memorandum released by the Federal Energy Regulatory Commission supports their contention that Enron played a role in driving up energy prices last year.
The memorandum released Monday and written by Enron attorneys in December 2000 outlined practices similar to those described by California officials who alleged that Enron created phantom congestion on electricity transmission lines and engaged in sham sales among its affiliates to boost electricity prices.
Disclosure of the document prompted California’s two Democratic senators, Dianne Feinstein and Barbara Boxer, to ask the Justice Department to start a criminal investigation into whether Enron and other energy companies broke the law and manipulated the state’s electricity market.
Washington Attorney General Christine Gregoire said in a statement released Tuesday that the state, which joined California and Oregon in calls for an investigation into the dramatic price rises, will continue to "take whatever actions are appropriate in the interest of this state’s power users."
Locally, Eric Christensen, associate general counsel for the Snohomish County PUD, said the memo helps make the utility’s case that it should be let out of long-term contracts signed when energy prices were headed into the stratosphere.
That move would save the utility about $200 million over the next seven years.
The commission previously agreed to hold hearings on complaints filed by the PUD and other utilities against the energy sellers, but the bulk of those won’t happen until October.
"It certainly strengthens our case, because it gives direct evidence of what we suspected was going on all along," Christensen said. "The memo says it was a regular practice not only for Enron but for other (power sellers) … to artificially inflate prices and game up the market."
The disclosure came as Enron directors told Congress that executives of the company and its auditors, Arthur Andersen LLP, deprived them of information they needed to deal with problems.
The Enron directors testified at the hearing that they were never told of improper trading strategies used in California during last year’s power crisis that forced up electricity rates dramatically for state residents.
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