US FERC chairman directs staff to include new Enron evidence

Washington (Platts)--17Jun2004

US Federal Energy Regulatory Commission Chairman Pat Wood Thursday ordered the
agency's legal staff to develop recommendations "to ensure" transcripts of
telephone conversations between Enron traders during the 2000-2001 Western
energy crisis are included in the commission's continuing investigations into
the failed energy giant's business practices. Wood's request comes after the
Snohomish, Washington, Public Utility District last month released the
transcripts, which apparently show traders deliberately manipulating
California's wholesale power market to increase prices. 

The tapes have attracted widespread attention in large part because of the
often profane nature of the conversations. At the commission's meeting
Thursday, Wood said the Snohomish tapes affirm what FERC staff concluded in
spring 2003 report that found Enron's "corporate culture fostered a disregard
for the American energy consumer."

Wood, however, added that the new tapes "indicate that the corporate culture
unfortunately seeped down into the work environment." Commissioner Suedeen
Kelly said she believes the agency has "a duty" to look into whatever new
evidence is presented in the Enron case and described the tapes as
"cold-blooded. They showed how cruel traders were and people did suffer. It's
an outrage that shocking behavior like that was permitted and even worse,
perhaps encouraged." Kelly said she was "distressed" that FERC's statutory
enforcement authority is "so limited." The commission has no authority to
impose civil penalties for market misbehavior and is limited to criminal
penalties of no more than $500/day. "There is a will on this commission" to
impose stiffer penalties, Kelly said, "but no way. I ask Congress to amend the
statute." Commissioner Joseph Kelliher added that the tapes "prove what we
already knew -- Enron was a corrupt organization." He also said the commission
needs to have a greater ability to impose civil and criminal penalties.

This story was first published in Platts real-time news and market reporting
service Platts Electricity Alert (http://electricityalert.platts.com ).

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