The Oregonian

Oregon, Washington demand help from feds with Enron

The attorneys general of Oregon and Washington on Monday sent letters to the chairman of the Federal Energy Regulatory Commission, criticizing the agency for its investigation of alleged Enron market manipulation and calling for immediate enforcement action to protect Western ratepayers.

Attorney General Hardy Myers of Oregon and Attorney General Christine Gregoire of Washington both said recent developments in the Enron case, including the indictment of former Enron chief executive Kenneth Lay, add to the mounting evidence that the bankrupt energy trading company helped send prices soaring during the Western energy crisis of 2001.

"There can be no doubt that Enron, through fraud and deceit, sent the West Coast energy market into an unnecessary and destructive tailspin," Myers said in a prepared statement.

"The fact that FERC has not already taken adequate steps to hold this company accountable is inexcusable," he said.

Gregoire added: "The recent disclosure of tapes and trading transactions has confirmed beyond any doubt that Enron was not only involved in fraudulent and deceptive practices in the electricity markets, but that it created many of them and was actively developing new ways to defraud customers."

Both Myers and Gregoire urged FERC Chairman Patrick Wood to provide state investigators with "any and all documents" related to Enron efforts to manipulate the market and to hold the Texas company accountable.

A FERC spokesman said the agency already is working with the states and has asked Congress for additional authority to punish companies for market manipulation.

"Pat Wood has said he does wish he had more authority under the Federal Power Act to do more and act quicker," said Kevin Cadden, FERC spokesman in Washington, D.C.

"But we can only use the tools that Congress has given us, and these things take time."

He noted a $3 billion refund plan for California ratepayers has been submitted to regulators in that state, and now it is up to them to process the refunds, not FERC.

"We've set up a formula for that refund and we wish we could speed it up, but we can't -- it's up to California," Cadden said.

Kevin Neely, spokesman for Myers, said the states need FERC to help substantiate the allegations against Enron in order to improve the chances that states and ratepayers will see at least some money from the Enron bankruptcy.

"The question is how far down in the pecking order you're going to be," Neely said.

"The fact is, if you're even in the middle of the pack, the chances you'll see a penny are very slim, so we need to do everything we can to make sure our claims are at the very top of the pile," he said.

Oregon is seeking roughly $500 million in claims against Enron while Washington state's pension fund lost nearly $100 million when Enron stock plummeted after its December 2001 bankruptcy.

Cadden noted that FERC is not a party to the bankruptcy proceeding against Enron in federal court in New York.

He said the agency is simply trying "to clean up the mess from the previous administration."