I talked to two power trading firms today where I know management staff and asked when I was going to read about their cheating California.
The response from one was interesting. He told me that they responded to FERC's initial inquiry by stating that they had no transmission capacity to California and therefore to sell to the California market had to schedule through a transmission rights holder. This passed the initial inquiry, but even though they said they did not do any of the enron stuff and they didn't directly sell into the California market, FERC wanted to know significant information about any trades they did during certain time periods. The speculation is that FERC is trying to follow a string of transactions to see if there was any laundering of power.
Perhaps buying from a CA generator, trading it off to, say, a Utahn utility, then seeing it retransmitted back into CA at market rates?
Robert, you're a pro. You know perfectly well that these types of strategies were used. Our little teeny outfit even used them, and didn't break (as far as we could tell, at least) even the tiniest regulation. Wouldn't be at all surprised if you heavyweights didn't do the same thing in larger degree. Frankly, it'd be more than a little shocking if you hadn't done so.
When morons write the rules, and ignore market functions completely, anyone who can add and who has even a small amount of imagination can earn a profit. 'Gaming' the system? What 'system'? What nonsense. Shooting tunafish in a barrel was more like it.
Do the assorted fools learn their lesson from this? Never, not a chance. They scream 'VICTIM' and attempt to misapply yet more governmental power to 'fix' (pardon my chortle) the situation.