Avista Cleared in Energy Crisis

Avista Corp., owner of utilities in the Northwest, has been cleared by federal regulators of allegations it helped Enron Corp. manipulate power prices during the California energy crisis of 2000 and 2001.

The Federal Energy Regulatory Commission affirmed the findings of a staff investigation, which found that Avista did not engage in improper trading tactics with Enron’s Portland General Electric Co. utility unit. A commission law judge approved a settlement clearing Avista in July.

An interim report on price manipulation in the western energy markets had unveiled “preliminary evidence” that Avista acted as a middleman for Enron and its Oregon utility. Portland General and El Paso Electric Co. agreed to pay $8.5 million and $15.5 million, respectively, to settle similar allegations.

During the crisis, millions of Californians lost power during six days of rolling blackouts, and PG&E; Corp.’s Pacific Gas & Electric, the state’s largest utility, became insolvent buying power after prices skyrocketed.

Enron, based in Houston, collapsed in December 2001, filing what was then the biggest U.S. bankruptcy case.

The company disclosed trading tactics that misled regulators and the market about supply and demand in California. FERC revoked Enron’s energy-trading license in June.

Shares of Spokane, Wash.-based Avista fell 19 cents to $17.51 on the New York Stock Exchange. The stock is up 53% from a year earlier.