There are some (a lot?) of former Enron traders and execs in town who might have thought they had safely weathered the investigation into whether that company manipulated electricity prices in California in 2000, causing a crisis.
They may have to think again.
FERC (the Federal Energy Regulatory Commission) has reopened the investigation, according to an order issued Monday, as part of an eventual response to a federal appellate ruling that said FERC's initial investigation had been too narrow.
As one electricity-markets expert explained it to us:
Initially, FERC looked at a specific time period during the West Coast power crisis to search for market manipulation. The 9th US District is pushing the Commission to look at the ENTIRE time period. Even if no additional culprits are found, it will do more than beat a dead horse -- it will no doubt repeat more egregiousness from the usual suspects. And most of those usual suspects (Reliant, Enron, Dynegy, etc) were either HQ'd or had offices in Houston trading the West.
A good majority of the players are still in the business. Almost all has been forgiven, if not forgotten (by the smaller utilities forced under duress to sign contracts for power for many years in the future at 20x the going rate).
A spokesperson for FERC tells Hair Balls, however, that she is not sure how far-reaching the order is. "It was issued in the context of cases that had not been completely resolved," Mary O'Driscoll said.
O'Driscoll says FERC does not formally consider it a "reopening" of the initial investigation.
The Commission is acting on remand from the 9th Circuit Court of Appeals.
Based on that guidance from the 9th Circuit, FERC is ordering a hearing before an Administrative Law Judge in which parties seeking refunds can present evidence demonstrating that a seller violated applicable rules or tariffs and that the violation affected the negotiation of bilateral contract, resulting in unjust and unreasonable rates.
The ALJ will make a determination on these factual questions for each seller and present the findings to the Commission to determine next steps, if any.
Still, some people should be at least nervous.
The California crisis was where Enron traders were heard laughing about what was going on in recorded calls found by investigators, including this exchange:
Employee 1: "All the money you guys stole from those poor grandmothers in California?
Employee 2: "Yeah, Grandma Millie man.
Employee 1: "Yeah, now she wants her fucking money back for all the power you've charged right up, jammed right up her ass for fucking $250 a megawatt hour."
If you like this story, consider signing up for our email newsletters.
SHOW ME HOW
You have successfully signed up for your selected newsletter(s) - please keep an eye on your mailbox, we're movin' in!
Enron: Not missed.
Some utilities have settled their claims; the litigation obviously drags on for others.
Here's a FERC timeline of events: