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Enron Corp Gets Death Penalty
Federal energy regulators issued what they called a "death penalty'' for Enron Corp. Wednesday, barring the company from competitively selling electricity and natural gas in the United States after finding that Enron manipulated Western power markets two years ago.
Source: Associated Press, 2003-06-25
Candidate: Enron
Two years after dealing a death blow to the California economy, Enron receives the Death Penalty.
Will anyone remember that it was George W. Bush that turned a blind eye and deaf ear to the energy crisis in the West? Will the Western States take Bush to task in November, 2004?
The Federal Energy Regulatory Commission also voted to uphold the validity of long-term power contracts in California and other Western states that were signed at the height of the energy crisis in 2000 and 2001.
In the Enron matter, the FERC said the company would be able to sell power, but at prices far below market rates, virtually shutting down the company's ability to compete. It can resume regular business once it emerges from bankruptcy proceedings and gets FERC approval.
FERC Chairman Pat Wood said it was the first time the commission had imposed its so-called "death penalty'' on power sellers.
"We send a clear signal that competitive markets must work in the interest of customers and the public interest,'' he said.
An Enron spokeswoman said the company did not have an immediate comment.
"We will review FERC's decision when it is rendered and will respond accordingly,'' said Karen Denne. "In the meantime, we are cooperating fully with FERC and other investigations.''
The Houston-based Enron went bankrupt after a series of revelations of hidden debt, inflated profits and accounting tricks. Thousands of workers lost their jobs and investors were left with virtually worthless stock.
The company, which has still been doing business, must file its Chapter 11 reorganization plan by June 30.
Also Wednesday, FERC asked 65 power companies, utilities and municipalities to justify their prices and marketing strategies during the energy crisis.
"This order is a major step toward addressing the manipulation that contributed to the extraordinary western power crisis,'' Commissioner William Massey said.In March, the agency's commissioners agreed with California officials that there was widespread manipulation of natural gas and electricity prices and supplies in California when the state negotiated more than $20 billion in power contracts.
California and several Western utilities had argued that the long-term prices were linked to the manipulation by Enron and other companies.
As a result, Wood said California would receive more than the $1.8 billion in refunds recommended by a FERC judge in December. The exact amount is to be determined in the coming months.
After a 13-month investigation into the matter, FERC singled out seven subsidiaries of Enron and five other companies for taking advantage of a dysfunctional market and reaping millions of dollars in unjust profits.
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User Originated Comments:
From: Price Fixing
1999-11-30 00:00:00
actually, williams and el paso were essentially
found guilty of price fixing.
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