Power Crisis a Big Sham? Valley Hardships Still Fresh in Minds
Jun 23 - Daily News; Los Angeles, Calif.
Workers in Santa Clarita sat in cold, dark offices the winter of 2000-01, sheriff's deputies stood by to direct traffic should the lights go out and college classes were canceled during a spate of power blackouts ordered as energy supplies hit record lows.
As new information comes to light, Doug Sink, chief financial officer for
Valencia-based drum maker Remo Inc., is bitter.
"What they did to the businesses and consumers in California, it's
unconscionable," Sink said. "It makes you mad - it's not that you
didn't think this was going on, but hearing the proof of how people in Texas
manipulated us, that's unbelievable."
The power crisis cost Remo as much as $700,000 in lost production as
temporary power outages shut down its plant. On top of that, the company saw its
electric bills triple from 7 or 8 cents per kilowatt to 24 cents. Rates have
since leveled at about 11 cents per kilowatt, he said.
With business back on track for the most part, local companies and
institutions are watching recent events involving Enron unfold. Taped
conversations of company employees boasting of various schemes to drive up power
prices to customers of the state's two main power providers, Pacific Gas and
Electric and Edison, could prove to be the smoking gun.
Employees caught on tape, routine among utilities for record- keeping
purposes, proposed exporting energy out of California so Enron could drive up
prices still more than the records they had hit. The tapes surfaced after a
Washington state utility involved in its own lawsuit with Enron obtained them
from the U.S. Justice Department.
"What we need to do is to help in the cause of, ah, (the) downfall of
California," an employee is quoted in transcripts of the tapes. "You
guys need to pull your megawatts out of California on a daily basis."
Individuals are heard gloating about ripping off consumers, lying and
corrupting one another as they manipulate the power supply.
Release of the tapes two weeks ago prompted California's two U.S. senators,
Democrats Barbara Boxer and Dianne Feinstein, to demand an immediate $8.9
billion refund for the state.
Then on Thursday, state Attorney General Bill Lockyer sued Enron and several
subsidiaries, charging they manipulated market prices. A spokeswoman for the
now-bankrupt Enron declined to comment, saying the company had not reviewed the
action but noted it was cooperating with investigators.
The energy crisis left College of the Canyons students in the dark as power
reserves dropped and rolling blackouts were scheduled statewide to manage the
shortages. Evening classes were canceled as final exams approached because the
darkened campus could prove dangerous. A college employee went to an out-of-area
campus to do the payroll on a borrowed computer. At one point, the Valencia
college was fined $126,000 when it refused requests to shut down for 10 days
during exams.
"It is going to be very disturbing if we learn the interruptions to our
educational programs were not the result of genuine power shortages, but rather
the result of a market being manipulated," said Phil Hartley, executive
vice president of the college. "These are students working on college
degrees. You can't interrupt that."
The crisis cost College of the Canyons close to $500,000. Some of that was
reimbursed by the state, but Hartley pointed out that California taxpayers still
had to foot the bill. And the recently released Enron audiotapes serve to reopen
the wound.
"It just shows callousness. There's an arrogant disregard, no sense of
civic pride."
In search of solutions, the city of Santa Clarita formed an energy committee
that included some local business representatives. Chris Daste, the city's field
services director, served as a liaison to the committee.
"People were really concerned about energy costs and what it was doing
to their bottom line," Daste said. "We did look at what it would take
to form our own utility, but the cost was astronomical. There was frustration
because we were powerless - there was nothing we could do."
The committee eventually opted to wait things out, and by summer the state
had bailed out the two major utilities and regulators allowed customers to drop
out of programs that allowed for interrupted service when supplies ran low.
Eventually prices dropped, but the anger lingers.
"To my knowledge they have no assets," Sink said. "I don't
know what you can do to make them pay. They should pay, but they won't."
Patricia Farrell Aidem, (661) 257-5251