Federal energy regulators seldom seem to do their jobs until the state of California gives them a swift kick. This time, state Atty. Gen. Bill Lockyer had to deliver a Florsheim to the fanny of Federal Energy Regulatory Commission Chairman Patrick H. Wood III, in the form of a lawsuit against Enron Corp.
True to form, FERC officials ignored recordings that demonstrated the outrageous tactics Enron traders used to game the California energy market -- until Lockyer's suit made it difficult to keep pretending they didn't exist. During the height of the state's energy meltdown, traders boasted of creating false congestion on power lines, ignoring price caps and promising to make available power that the company never intended to deliver. They even invented a name for their fictional victim: Grandma Millie. As Lockyer said Thursday, "Grandma Millie ought to get her money back."
The tapes build upon evidence that California officials have been accumulating since the energy market meltdown of 2000-2001. Past investigations produced strong evidence of trading schemes that Enron and other energy companies used to manipulate wholesale power prices, forcing Californians to endure roving blackouts and sky-high utility bills. The latest tapes and transcripts, released as part of a Washington state utility's lawsuit against Enron, describe even more schemes, with names like Ping Pong, Donkey Punch and Russian Roulette.
Just hours before Lockyer filed his suit against Enron on Thursday, FERC finally agreed to review the tapes to determine whether California can use them in its long-running battle to force $8.9 billion in refunds from companies that allegedly overcharged Californians during the energy crisis. FERC Chairman Wood on Thursday described the tapes as indicating a "corrosive attitude" throughout Enron. He's right, but why did it take years to come to that conclusion?
The commission has been playing political games since the energy market imploded. Rather than saving Californians billions of dollars by immediately establishing stronger controls over wholesale power prices, commissioners sat idle. They argue that Californians deserve only a third of the amount being sought from power providers.
California's senators have had enough. Sen. Dianne Feinstein is demanding that Wood promptly force energy companies to refund what Californians are owed. Sen. Barbara Boxer wants to go even further. In a June 16 letter to President Bush, she calls for the president to force the resignation of commissioners who don't immediately side with Californians by ordering the $8.9 billion in refunds. It's a clarion call that Wood should heed. It's time for the FERC chairman to lead or leave.