Enron traders derided users
tapes, they laugh about manipulating Calif. power supplies
AND NEWS SERVICES: June 3, 2004
Enron energy traders
in the company's Portland office spoke openly of reducing power supplies and
jacking up prices at the expense of consumers and "poor grandmothers," according
to recorded phone conversations filed last month with the Federal Energy
The Snohomish County Public Utilities District,
which obtained the recordings from the federal government and transcribed them,
submitted the transcripts to the FERC as part of its legal proceeding to receive
reimbursements for Enron's price increases.
“We've paid dearly, and
our consumers are still paying dearly for what they've done to us. . . . These
recordings that we disclosed this week just show absolutely no regard for
consumers and for the power grid," said Mike Gianunzio, general Council for the
Snohomish County PUD.
Utility official said they did not have an
estimate for the amount of money that Enron overcharged the PUD which serves
290,000 customers and is the 12th -largest consumer-owned utility in the
It released transcripts of the phone calls May 17 and audio
copies of the conversations Tuesday. The calls were made in 2000 and early
The tapes drew condemnation yesterday from local lawmakers,
including Gov. Gary Locke and Sen. Maria Cantwell, both Democrats, who both
issued statements criticizing President Bush for not taking appropriate action
to stabilize the energy market.
Rep. Jay Inslee, D-Wash., said in a
statement that he would offer an amendment to federal energy legislation next
week that would push back the date from which public utilities can be reimbursed
for Enron's price increases.
calls, traders openly and gleefully discussed creating congestion on
transmission lines, taking generating units offline to pump up electricity
prices and overall manipulation of the California power
also kidded about Enrons hefty political contributions - particularly to
Bush’s 2000 presidential campaign - and how that could translate into more
opportunity for profit in California.
"I'd love to see Ken Lay be
secretary of energy," one trader said, referring to the now disgraced former
Enron chief executive whose ties to the Bush administration have drawn criticism
In one transcript, a trader asks about "all the money
you guys stole from those poor grandmothers of California."
the Enron trader responds, "Yeah, Grandma Millie, man. But she's the one who
couldn't figure out how to (f_____g) vote on the butterfly ballot."
"Yeah, now she wants her (f_____g) money back for all the power you've charged
right up - jammed right up her (a__) for (f_____g) 250 dollars a megawatt-hour,"
the first trader says.
Enron spokeswoman Karen Denne declined comment
on the transcripts, but said the company continues "to cooperate fully with all
FERC spokesman, Bryan Lee said yesterday that a FERC
administrative law judge's finding that Enron should forfeit $32.5 million in
unjust profits is pending before the commission.
regularly tape trader conversations to keep a record of transactions.
Snohomish County PUD consultants listened to about 1,000 hours of phone
conversations, which were recorded in August, September and December 2000 and
January 2001, said Eric Christensen, assistant general council for the PUD.
Additional conversations likely took place by cell phones, online instant
messaging and Internet chat rooms, Which traders used to conduct
The PUD filed transcripts of about 80 phone conversations
with the FERC, Christensen said. The utility made nine of the conversations
Locke criticized the FERC, Bush and Energy Secretary
Spencer Abraham yesterday for allowing rogue traders to jack up energy
"The economy in the Northwest is still suffering because of
these failures," he said. "Long-term power contracts established with these
exceptionally high power prices should be terminated or renegotiated."
The PUD has asked the FERC to push back the date from which it can be reimbursed
for Enron's inflated energy prices from June 2003 to January 2000, Christensen
Enron filed for bankruptcy in 2001 amid devastating revelations
of hidden debt, inflated profits and shady accounting. A wave of corporate
scandals followed the Enron debacle.
John Forney a former top trader
in Enron's defunct Western trading operation based in Portland, is scheduled to
stand trial in October on charges of wire fraud and conspiracy. Two others,
Timothy Belden and Jeffrey Richter, have pleaded guilty to one count of wire
fraud and are helping prosecutors.
Conversations involving all three
are among those in the transcripts.
Enron sued the PUD for more than
$100 million last year for canceling its energy contract. The PUD did so in
November 2001 after Enron's credit rating declined, a provision that the
contract allowed, Christensen said. The case is pending.
The PUD is
also involved in a separate lawsuit in California. The utility sued 11 power
generating and marketing companies in July 2002, alleging that they created
artificial power shortages.
This report includes information from P-I
reporter Christine Frey and The Associated Press.