Snohomish PUD, Cantwell Notch Biggest Victory Yet in Fight Against Enron

Snohomish PUD, Cantwell Notch Biggest Victory Yet in Fight Against Enron

FERC issues Friday night order, declaring $122 million Enron claim against Snohomish represents unjust profits

U.S. Senator Maria Cantwell (D-WA) and Snohomish PUD tonight scored their biggest victory yet in the fight for relief from Enron. The Federal Energy Regulatory Commission (FERC) issued an order tonight that, for the first time, found Enron in violation of its market-based rate authority at the time Snohomish inked its power sales contract with the now-bankrupt energy giant. Despite mounting evidence of Enron's schemes to manipulate power markets during the Western energy crisis of 2000-2001, Enron has sued Snohomish PUD for collection of $122 million in "termination payments" associated with the contract.

"Our ratepayers shouldn't be forced to reward criminal activity," said Cantwell, a member of the Senate Energy committee. " At long last federal regulators have begun to do their jobs to stop this wasteful $122 million lawsuit.

"We will not rest until the wooden stake is punched through the heart of the Enron lawsuit against us," Cantwell said.

In the order issued tonight, FERC for the first time found that "the termination payments are based on profits Enron projected to receive under its long-term wholesale power contracts executed during the period when Enron was in violation of conditions of its market-based rate authority."

FERC had failed to rule in this matter since August 2004, when Western utilities including Snohomish, as well as the Attorneys General of Washington and Nevada requested it. When new evidence was revealed in February detailing even more of Enron's schemes, Cantwell sent a letter to the FERC Chairman requesting an explanation of the Commission's failure to act. In response, FERC Chairman Pat Wood this week sent Cantwell a letter in which he said he had "asked my colleagues to consider a separate ruling" on the issue. "I expect an order soon, and I will forward it to you upon adoption," Wood wrote to Cantwell on March 7.

This May will mark three years since Enron's "smoking gun" memos were revealed, which outlined the company's schemes to bilk Western ratepayers. Nevertheless, Enron has sued a number of utilities in the West, including Snohomish PUD, for "termination payments" associated with outrageously-priced power contracts cancelled in the mist of the energy giant's collapse into bankruptcy. Enron is suing Washington and Nevada utilities alone for almost half a billion dollars.

http://cantwell.senate.gov/news/releases/2005_03_11_enron.html