May 20--An amendment to a federal energy bill may protect Nevada electricity customers from bearing the burden of a $336 million judgment.

The Senate Committee on Energy and Natural Resources on Thursday approved an energy bill with an amendment that gives the Federal Energy Regulatory Commission exclusive authority over energy supply contracts between Nevada's two investor-owned utilities and a subsidiary of Enron Corp.

Enron terminated the contracts in 2002 after New York firms downgraded ratings for Nevada Power Co. and Sierra Pacific Power Co. to junk bond levels. The Houston-based energy giant claimed the utilities failed to provide enough assurances that they would be able to pay for power Enron supplied through the contracts.

Enron then sued the Nevada utilities for the difference between the prices specified in the contracts and the market price for power after the contract terminations.

Enron won a $336 million summary judgment in bankruptcy court, but the judgment was initially overturned.

Federal regulators later ruled that Enron played a major role in manipulating wholesale power markets, causing prices to skyrocket during the Western energy crisis of 2001 and 2002. That ruling led utility officials to argue that Enron was profiting from its illegal activities.

"Nevada ratepayers should not be held liable for millions of dollars' worth of electricity that they never received," Sen. John Ensign, R-Nev., said in a statement. "I will do whatever I can to make sure Nevada is not stuck with a $330 million bill for fraud committed by Enron. The approval is a major step in that direction."

Sen. Harry Reid, D-Nev., added: "Enron is one of the worst corporate swindlers in modern history. The committee's vote reinforces what we in the congressional delegation have been saying all along, that FERC should step in and protect Nevada ratepayers by voiding these contracts."

While most observers agree that Enron violated laws in the way it manipulated wholesale power markets, the bankruptcy court is interested in assets that can used to compensate Enron's creditors. The question was whether the Nevada utilities should pay Enron $336 million for the benefit of Enron's creditors.

Bankruptcy Court Judge Arthur Gonzalez entered the original judgment in favor of Enron. A federal judge in New York remanded the case to Gonzalez for trial. But the New York judge also affirmed many of Gonzalez's decisions in the case.

The Nevada utilities persuaded FERC to consider the issue, although Gonzalez in January ordered the utilities not to participate in the FERC case.

The amendment to the energy bill asserts FERC's jurisdiction over the Enron matter. While it's not clear how FERC will rule in the case, observers believe they already have an indication of how Gonzalez favors Enron's arguments.

If Enron wins a judgment and it is affirmed on appeal, state regulators would be forced to decide how much of the $336 million burden would be put on the investor-owned utilities and how much on their customers through higher rates.

The Nevada congressional delegation has vocally objected to the predicament of the state's investor-owned electric utilities.

Ensign has "been talking the ears off his colleagues on a particularly regular basis," said Jack Finn, a spokesman for the senator.

Sen. Maria Cantwell, D-Wash., a member of the energy committee, authored the amendment.

The amendment deals with "any (wholesale) contract entered into in the Western Interconnection prior to June 20, 2001," in which FERC revoked the seller's authority to sell power at market rates, as it has in Enron's case.

In that circumstance, FERC has "exclusive jurisdiction" to determine whether a wholesale power customer is obligated for termination payments "for power not delivered by the seller."

An Enron spokeswoman said she was unaware of the amendment and couldn't comment.

Walt Higgins, chairman and chief executive officer of Sierra Pacific Resources, the parent of the utilities, expressed gratitude.

"Enron certainly should not be immune from the damages it did in Nevada and throughout the West by manipulating prices during the 2000-2001 energy crisis," Higgins said in a statement.

State consumer advocate Adriana Escobar Chanos said: "We appreciate our senators' nonpartisan efforts to protect ratepayers in Nevada, and, obviously, if this leads to relief of a $330 million burden on our residential ratepayers, it's great."

In a separate statement, Public Utilities Commission Chairman Don Soderberg said: "When a company hides behind the law to swindle consumers, the law needs to be changed."

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