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Posted on 08/01/2002 10:37:44 PM PDT by lewislynn
Aug. 1, 2002, 11:44PM
WASHINGTON -- Enron Corp. lied to California's electric grid operator and took advantage of flaws in the state's deregulation plan to exploit California's electricity crisis, federal regulators said.
The Federal Energy Regulatory Commission, in drafting its master plan for the nation's wholesale power markets, tried to incorporate safeguards to ensure traders cannot act as Enron did at a time when California was struggling to keep the lights on.
Examining the strategies Enron is known to have used, regulators have concluded "a few of the strategies ... appear to depend on the marketer providing false information" to California's grid operator.
Regulators specified a technique known as "Get Shorty," in which Enron would promise to have certain generation and transmission services available if the state needed them the next day.
Enron was paid for providing these "ancillary services" but never even planned to provide them itself. Instead, it would bet it could buy them cheaper from someone else.
The rules, however, required that Enron and other marketers identify the source of those services. Since Enron didn't usually buy the services until 9 a.m. the next morning, it had to submit false information.
Another strategy, known by Enron traders as "Fat Boy" or "Inc-ing Load" involved artificially increasing demand loads.
Enron traders would assume, often correctly, that the state's utilities had underestimated the next day's demand for electricity in an effort to hold down prices. Enron scheduled to ship more power on the grid than its own customers needed, giving it a surplus. Enron would then sell this "excess" power to the grid operator at a favorable price.
Other strategies, rather than using outright falsehoods, merely seemed to take advantage of loopholes in the grid operator's rules, regulators noted.
The state's grid operator, the California Independent System Operator, addressed many of these trading strategies in the market design proposal it submitted to federal regulators in May.
"What we found, however, is that every time there are new rules put in place, various energy suppliers will try to exploit whatever those new rules are," said Gregg Fishman, a spokesman for the grid operator.
Fishman declined to comment on the commission's proposed rule, saying specialists at the grid operator needed more time to study it.
Eric Thode, a spokesman for Enron, said: "We continue to cooperate in all of the various investigations."
Federal regulators learned about the trading strategies after Enron officials turned over documents that likely could have been withheld because of attorney-client privilege.
Federal regulators are scheduled to update lawmakers on their investigation into these strategies and other industry misbehaviors by the end of next week.
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Hmmmm...
Seems like both sides were trying to gain an advantage.
You're the only person in America who still believes that what California did was "deregulation."
Actually I'm on record as pointing out that it was phony and a fraud and was NOT anything resembling deregulation...You on the other hand are on record as defending it to the teeth. Defending it because it was a Republican bill and had a unanimous approval. As if any one of those things is any criteria for an absolute good thing.
BTW, did you even read the first sentence?
Enron Corp. lied to California's electric grid operator and took advantage of flaws in the state's deregulation plan ........What exactly do you propose we call it now?...How about the Republicans worst policy mistake in California history?
AND you posted the article, then defended him till now when the facts are undisputed and you've made a fool of yourself:
"Blame, hell," said Pete Wilson. "I take credit for having been the driving force to launch deregulation."
It's as "deregulation" as Texas is....Which parts of Texas are deregulated and which parts are not, again? ... Reliant and what other companies get a guaranteed profit ( as you say "it's a given".) from Texas "deregulation" regulators?
At least I'm consistant, not a wishy washy me too nitwit trying to impress my California hater friends. First you claim I'm for big government because I came out with the facts pointing out the flaws and the fraud against deregulation ....(LONG BEFORE THE ENRON COLLAPSE), now you'r backing off as if you knew all along...You, like your crooked idols in the energy business are a fraud.
I have contradicted your attempts to lay the blame for the bill solely on the Republicans, because that is another lie. The original bill was introduced by a Republican in the Assembly, but shepherded through the Democrat-controlled Senate and conference committee by a Democrat. The final product passed unanimously in both houses.
That, to any other person except you, would indicate that this plan was a bipartisan effort. Because of your pathological hatred of Republicans, you place all the blame on them.
Republicans are to blame. So are Democrats. So is Pete Wilson. They all screwed up. But stop the lying about what I've said and who was to blame.
Texas is implementing deregulation. It's a transistion period where the large utilities like Reliant and TXU have their rates set by the Texas PUC. Other power companies use that rate as the "price to beat" and market to consumers directly. Most undersell the utilities, but there is a "green" power company that is more expensive, for those who like windmill power. These other companies are operating in a deregulated environment. When enough customers switch from the major utilities and the PUC is satisfied that the plan has worked, Reliant and TXU will no longer have their rates set and will be free to set their own prices.
You see, the difference is that I know what I'm talking about, while you just mouth off.
You try to rewrite history, both of what happened in California and what I've consistently said.
You are the fraud.
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