Cantwell Welcomes FERC Order that Could Protect Northwest Ratepayers
FERC Says It Will Take up Cantwell Amendment Claims in “Near Future” Senator cautiously optimistic, maintains Commission shouldn’t cut off avenues for relief
SEATTLE, WA – U.S. Senator Maria Cantwell (D-WA) on Wednesday welcomed a new order issued by the Federal Energy Regulatory Commission (FERC) assuring Northwest ratepayers that the Commission still intends to consider complaints filed against Enron under the Cantwell Amendment—Section 1290 of the Energy Policy Act of 2005. Earlier this week, Cantwell joined with Northwest utilities and businesses to protest terms of a joint Enron/FERC staff settlement proposal that would release Enron from claims under the Cantwell Amendment, which relates to Enron’s attempt to collect millions of dollars for power it never even delivered.
“It is crucial that our nation’s top energy regulators show consumers that they’ve learned from the hard lessons of the Western energy crisis,” said Cantwell, a member of the Senate Energy Committee. “This is a good sign; but we still need to make sure we preserve all avenues for relief for Northwest ratepayers harmed by the biggest fraud in American corporate history.”
Earlier this week, Cantwell wrote a letter to FERC outlining her objections to a March 10 Enron/FERC staff settlement proposal. She objected to the suggestion that FERC staff would release Enron from claims under the Energy Bill’s bipartisan Cantwell Amendment, which reaffirmed the Commission’s exclusive jurisdiction to determine whether Enron should get to collect millions of dollars for power it never delivered to entities like Washington’s Snohomish Public Utility District (PUD). Last summer, Enron was trying to sue Snohomish PUD for about $120 million in Bankruptcy Court, along with other Western businesses such as Ash Grove Cement, for $4.1 million plus interest, and Montana-based Luzenac North America for almost $7 million.
In her April 10 letter, Cantwell questioned whether the joint Enron/FERC staff settlement proposal was equitable for the Northwest ratepayers. On Monday, Cantwell joined with Snohomish PUD, Ash Grove Cement, and other Northwest businesses to review evidence that showed the Pacific Northwest was Enron’s biggest profit center during the Western energy crisis—bigger even than California. The Enron/FERC staff settlement proposed on March 10 would return no more than $10 million in illegal profits to remaining Northwest parties—amounting to just $2.29 million after the Enron bankruptcy process. Last year, the Commission approved a settlement returning $900 million to California. Cantwell also raised concerns about terms of the proposed settlement that would require FERC staff to withdraw Enron-related evidence it had accumulated as part of its multi-year investigation, including audiotapes and documents that have never been made public.
“It’s still not clear that Northwest ratepayers will get back their fair share of Enron’s illegal profits, and there is still more work to be done to make sure the public and policymakers alike know the whole truth about Enron’s market manipulation schemes,” Cantwell added. “We already know that Enron was the first to use online financial trading schemes to inflate the energy prices paid by American consumers. Even though Enron itself is gone, a handful of other energy trading platforms have sprung up in its place. We need to get the truth about how the same type of market speculation is impacting oil and gas prices, which are going through the roof. There is important Enron evidence we haven’t seen yet—a virtual roadmap to how to jack up energy prices.”
Since 2002, Cantwell has been working with Senators Diane Feinstein (D-CA) and Carl Levin (D-MI) to close the “Enron loophole,” which allows financial trading in energy commodities to take place without any market transparency requirements. The senators plan to try to close this loophole once again this summer during debate on the Commodity Exchange Act reauthorization (S. 1566). The FERC Order is attached here
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