Snohomish County PUD ratepayers could have a large interest in some memos from Enron. The memos ought to spur federal action to provide relief from the outrageous run-ups in energy rates.
The Enron memos describe a series of market maneuvers aimed at running up prices and profits during the West Coast energy crisis a year and a half ago. As offensive as the effects of the market manipulation were, there may have been nothing illegal about Enron’s practices. Indeed, Stanford economist Frank A. Wolak describes the tactics as nothing more than garden variety moves seen in most markets.
Congress should now take closer notice of Enron’s blatant stonewalling in recent months. Even while professing cooperation before congressional committees, the ethically challenged company had been withholding the memos that point to its own market manipulation strategies. These included making it appear that more power was scheduled for delivery than transmission lines could carry.
Such tactics seem to have cost the public billions of hard-earned dollars. While real people earned money to pay their bills, Enron’s slick traders played games to manipulate the market. No doubt, the high rollers at Enron were congratulating themselves on the cleverness of tricks that they nicknamed "Get Shorty," "Fat Boy" and "Death Star."
It’s possible that a flood of new information about market manipulation is about to come out of Enron and other energy trading firms. Gregoire says the memos increase the odds that an investigation by Washington, Oregon and California will uncover any anti-trust violations that might have occurred.
Fortunately, the deeply embarrassed Federal Energy Regulatory Commission appears to be waking from its complacency. FERC now appears to be taking seriously the possibility that the energy crisis was manufactured. As Sen. Maria Cantwell argued in a filing with the commission, FERC should tear up long-term contracts that Western utilities, including the Snohomish County PUD, signed at the height of the crisis.
PUD associate general counsel Eric Christensen says the memos could also help if Enron tries to seek payment for the PUD’s earlier decision to break its contract with the bankrupt firm. That’s just one of several contracts signed about the same time.
A FERC official was quoted this week as saying the commission wanted to be freed from the after-effects of the energy crisis. The unnamed official said, "It’s like a piece of bubble gum that sticks to your shoe." FERC ought to be more concered about removing the after-effects of the market manipulation on millions of West Coast residents, companies and schools. The extra hundreds of dollars per month drained from just Snohomish County PUD customers with electrically heated homes constitute a serious problem, not an annoyance.
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