Judge Says Enron Should Repay Stateby Reuters
Los Angeles Times, July 16, 2003
FERC will consider the decision,
which calls for the energy trader to refund $32.5 million.
Enron Corp. should repay $32.5 million for violating electricity trading rules during the California energy crisis of 2000-01, a Federal Energy Regulatory Commission judge ruled Tuesday.
FERC Judge Carmen Cintron said in an initial decision that Enron violated the Federal Power Act, and the firm should repay $32.5 million "for this violation."
Cintron also reiterated FERC's finding in June that Enron's wholesale electricity trading license should be revoked. The administrative law judge's decision goes to the three-member commission, which can reject, accept or modify it.
Enron spokesman Eric Thode said the firm was studying the ruling and would cooperate with FERC.
Enron faces a myriad of enforcement actions by FERC, the Commodity Futures Trading Commission and the Justice Department.
Cintron presided over a case that focused on a questionable trading partnership Enron held with El Paso Electric Co., a small Texas utility unrelated to El Paso Corp.
"Record evidence demonstrates that Enron's dealings with El Paso violated Enron's market-based rate authority," Cintron wrote.
The arrangement, in which Enron traders staffed El Paso Electric's trading desk during regular hours, increased Enron's market share and gave it access to sensitive market information, Cintron found in a 42-page decision.
Enron failed to notify FERC of the arrangement as required by law, Cintron said.
California has alleged that Enron earned about $3 billion on wholesale power trading between 1997 and 2001, and should repay the entire amount.
However, Cintron found that repayment of profit from Enron's partnership with El Paso Electric was the "appropriate remedy" in her specific case.
El Paso Electric has agreed to pay refunds of $15.5 million and forfeit power trading privileges for two years to settle its share of the Enron charges.
Energy Overcharge of $5.5 Billion is Alleged by Tim Reiterman & Nancy Rivera Brooks, LA Times 3/22/01
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