Enron Probe Expands to West’s Power Prices

Federal energy regulators Wednesday expanded an investigation beyond Enron Corp. to determine whether any companies used their market power to drive up electricity prices in the West last year.

The chairman of the Federal Energy Regulatory Commission, Patrick H. Wood III, promised a congressional committee Jan. 29 that he would investigate long-standing complaints by West Coast lawmakers that Enron engaged in price gouging.

The commission broadened the probe Wednesday, expanding the focus to other companies and authorizing the use of subpoenas if necessary to determine whether power suppliers manipulated markets for electricity or natural gas.

In a letter to Sen. Jeff Bingaman (D-N.M.), chairman of the Energy and Natural Resources Committee, Wood said FERC staff would be consulting with the Commodity Futures Trading Commission, the Securities and Exchange Commission, the Justice Department and the Federal Trade Commission.

Wood said the investigation could take several months to complete.

California officials have asked the commission to order suppliers to refund $8.9 billion in alleged overcharges.

Sen. Barbara Boxer (D-Calif.) welcomed the investigation, with a caveat.

“FERC’s words have raised our hopes before, but FERC’s actions have often disappointed us. I hope that is not the case this time around,” Boxer said.

She urged FERC to examine the long-term contracts between the state of California and electricity generators and asked FERC to detail for her all meetings and phone calls between commissioners and Enron executives.

Separately, Boxer has asked the General Accounting Office, the investigative arm of Congress, to investigate “the relationship between Enron’s faltering business” and skyrocketing electricity prices in California last year.