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Enron gouged customers over billion dollars Original Source Link: (May no longer be active)
http://www.forbes.com/work/feeds/ap/2004/06/14/ap1412608.htmlhttp://www.forbes.com/work/feeds/ap/2004/06/14/ap1412608.html
Associated Press
Utility: Enron Gouged Customers for $1.1B
06.14.2004, 03:47 PM
Enron Corp. manipulated the energy market practically every day during the 2000-01 power crunch and gouged Western customers for at least $1.1 billion, according to audiotapes and documents released Monday.
The records were uncovered by the same utility that last month released details of profanity-laced conversations in which Enron traders gleefully gloat about ripping off "those poor grandmothers" in California during the power crisis.
The latest release by the Snohomish Public Utility District provides another glimpse into how Enron allegedly rigged the market at the same time millions of Californians were suffering blackouts and paying sky-high electricity bills.
The utility wants an administrative law judge to order Enron to surrender up to $2 billion in ill-gotten gains. California politicians want Enron to reimburse customers there at least $8.9 billion.
The latest documents show Enron manipulated the market on 473 of 537 days from January 2000 to June 2001, the utility said.
In one scheme, Enron made $222,678 in a three-hour period by shipping power from California to Oregon, masking the original source of the power, and then selling it back to California at highly inflated rates.
The records also show that Enron employed at least five other schemes, dubbed "sidewinder," "ping pong," "donkey punch," "spread play" and "Russian roulette."
In one of the transcripts, an Enron employee says, "If the line's not congested I just look to congest it. ... If you can congest it, that's a moneymaker no matter what."
The documents also show that Enron maintained five separate sets of accounting records.
Enron refused to comment on the records except to say it is cooperating with all investigations. Energy traders routinely keep tapes of their phone calls as a record of oral contracts.
Sen. Maria Cantwell, D-Wash., used the evidence to demand a new investigation by the Federal Energy Regulatory Commission. She said the agency's failure to uncover Enron's schemes wound up hurting thousands of customers and that the commission tried to keep the utility district from getting access to Enron's tapes.
"When are you going to give justice to the individuals who have been hurt by this Enron market manipulation?" Cantwell asked. "If the federal oversight regulators aren't going to do their job, then they should get out of the way and quit obstructing justice."
A FERC spokesman did not immediately return a call seeking comment.
An administrative law judge's finding that Enron should forfeit $32.5 million in unjust profits is pending before FERC.
The utility analyzed the records in hopes of defending itself against a $122 million lawsuit filed by Enron, which has accused the district of illegally breaking its contracts with the company. The utility claims the contract was void because Enron engaged in fraudulent business practices to drive up prices.
Enron has sued several other Western utilities for more than $500 million based on similar claims. If the Snohomish PUD loses its case, the average cost to each of its 290,000 customers would be $420, the utility said.
Other companies have reached settlements stemming from the Western energy crisis. California parties have settled complaints with Tulsa, Okla.-based Williams Cos. for $1.4 billion and Houston-based El Paso Corp. for $1.7 billion. Dynegy Inc. and NRG Energy Inc. in April struck a deal to wipe out more than $280 million in unpaid electricity bills during California's energy crisis.
Enron filed for bankruptcy in 2001 amid devastating revelations of hidden debt, inflated profits and shady accounting - the first in a wave of scandals to rattle Wall Street.
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