Tuesday, June 04, 2002
Score one for me!: Last month I wrote that the Federal Energy Regulatory Commission was getting serious about investigating what exactly happened last year when the lights went out in California.
At that time, in a column for the New York Times, columnist Paul Krugman wrote: "And I'm sure that there will be a determined effort to ignore even these latest revelations (of gaming the power market). After all, why let facts get in the way of a beautiful, and politically convenient, theory?"
Krugman's going to have to revise his theory, because the FERC is taking action. From today's Times:
[W]ASHINGTON, June 4 — Federal regulators threatened today to strip four large energy traders of their ability to charge unregulated rates for electricity because of their responses to inquiries about their strategies in California.
In an order issued late today, the Federal Energy Regulatory Commission said it appeared that three of the companies — El Paso Electric, the Avista Corporation and Portland General Electric, an Enron subsidiary — may have submitted false information to the commission in response to inquiries about whether they engaged in manipulative energy trading strategies in California. The fourth, the energy trading unit of the Williams Companies, has simply refused to answer a crucial question, the commission said.
Late today, the four companies said they would act quickly to provide new information demanded by the commission.
The commission has never before even threatened to strip an energy trader of its ability to charge unregulated rates, commission officials said last night. But one commissioner, Nora Brownell, said it was important that all energy traders recognize the seriousness of the commission's investigation into market manipulation in California during the 2000-01 power crisis.
Is this a calculated political move by the Bush administration to put California in play for the 2004 election? Some cynics might think so, but the truth is California is currently so liberal that it will be at least a decade before even the most liberal Republican has a chance at a major statewide office -- let alone a GOP presidential candidate capturing the state's huge electoral windfall.
Instead, I think it is merely a recognition that it is apparent that Californians were robbed by Enron, and probably other power generators. In the end, I think justice will be done -- but don't hold your breath waiting for a refund to consumers for those sky-high rates you were paying a year ago. Not even a Democratic president could get cash back to the people -- however look for the state budget deficit to shrink some.