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FERC Response to West Coast Energy Crisis Is Late, Weak

March 26, 2003

FERC Response to West Coast Energy Crisis Is Late, Weak

Statement by Tyson Slocum, Research Director for Public Citizen’s Critical Mass Energy and Environment Program

The Federal Energy Regulatory Commission’s (FERC) response to the overwhelming evidence that the West Coast energy crisis was caused by the willful manipulation by energy companies is belated and weak. In November 2000, FERC concluded that West Coast energy prices were not just and reasonable, but it has taken the commission 28 months to conclude that corporate misdeeds were the cause. The companies include AEP, BP, Duke, Dynegy, El Paso, Enron, Mirant, Morgan Stanley, Reliant, Sempra and Williams.

In 2000 and 2001, energy companies engaged in a year-long campaign of extortion of tens of millions of West Coast households and businesses. The companies responsible not only ought to be held accountable but should be prevented from manipulating the market again. It is unconscionable that FERC has not permanently revoked market-based rate authority for the companies that caused the crisis. Instead, FERC has only sought a refund of the ill-gotten gains. These corporate criminals set astronomical rates by manipulating the availability of energy in a deregulated market. They should not be allowed to do so again.

In its findings, FERC singled out Enron Energy Services (EES) as a major participant in some of the most egregious manipulation schemes, concluding that EES was one of the largest perpetrators of manipulation strategies in the California market. Thomas White was in charge of this Enron division until President Bush appointed him Secretary of the Army in May 2001. Public Citizen renews its call for White to appear before the U.S. Senate to respond to questions we believe he did not truthfully answer during his July 2002 testimony.