Enron traders derided users
On tapes, they laugh about manipulating Calif. power supplies
P-I STAFF 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 Regulatory Commission.
  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 country.
  It released transcripts of the phone calls May 17 and audio copies of the conversations Tuesday. The calls were made in 2000 and early 2001.
  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.
  On the 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 market.
  They 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 from Democrats.
  In one transcript, a trader asks about "all the money you guys stole from those poor grandmothers of California."
  To which 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 investigations."
  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.
  Energy merchants 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 business.
  The PUD filed transcripts of about 80 phone conversations with the FERC, Christensen said. The utility made nine of the conversations public online.
  Locke criticized the FERC, Bush and Energy Secretary Spencer Abraham yesterday for allowing rogue traders to jack up energy prices.
  "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 said.
  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.