01.31.05

FERC Staff Finds $1.8 Billion in Illegal Enron Profits Dating Back to 1997

Cantwell: "The writing's on the wall. Now the Commission needs to act."

WASHINGTON, D.C. – U.S. Senator Maria Cantwell (D-WA) released the following statement in response to findings of Federal Energy Regulatory Commission (FERC) staff that Enron was engaged in fraudulent conduct in our nation's energy markets, dating back to 1997.

"Washington state consumers must not be forced to pay the price for Enron's fraud," Cantwell said. "It has literally taken years for FERC—or at least its staff—to come to the realization that Enron's activities were illegal and violated the Commission's own rules. Press releases and staff recommendations are still along way from justice for my constituents. FERC has been sitting on its hands while Washington state ratepayers wait for the other shoe to drop. The writing's on the wall. Now the Commission needs to act to make sure that the same consumers who have already paid the price for Enron's manipulation schemes won't have to pay yet again."

In an ongoing proceeding to determine the extent of Enron's violations of Western market rules during the electricity crisis of 2000-2001, FERC staff today concluded that Enron had engaged in fraudulent activities dating back to 1997. The staff also calculated illegal Enron profits of approximately $1.8 billion. The staff was silent, however, on whether utilities being sued by Enron for collection of "termination payments" on inflated power contracts should be forced to pay.

Cantwell, the Attorneys General of Washington and Nevada, and utilities including Washington's Snohomish PUD last August asked FERC to rule that these "termination payments" represent pure profit—since Enron never even delivered power under the contracts. Despite the request for expedited consideration of this matter, the Commission has yet to act almost six months later. Enron is suing Washington and Nevada utilities alone for almost half a billion dollars.

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