04.29.03

Cantwell: Northwest Ratepayers Will Save $190 Million from Termination of Enron-BPA Contracts

BPA and Enron creditors reach agreement on long term contracts

WASHINGTON, DC – U.S. Maria Cantwell (D-WA) today announced that Northwest ratepayers will save $190 million through 2006 under a new agreement between the Bonneville Power Administration (BPA) and Enron’s creditors. The agreement terminates $40 million in long term contracts with Enron and resolves legal uncertainty about $150 million in contracts BPA already unilaterally terminated.

Senator Cantwell, who sits on the Senate Energy and Natural Resources Committee, has fought to terminate contracts between Enron and Northwest utilities, including BPA and others. "This is an important victory for Northwest ratepayers," Cantwell said. "Enron robbed the Northwest during the energy crisis and we are finally beginning to get out of these over-inflated deals. But our fight is not over – there are still contracts between Enron and Northwest utilities that must be terminated by FERC."

BPA Administrator Steve Wright thanked Senator Cantwell for her steadfast support in bringing Northwest ratepayers relief from extremely high electricity prices. "Senator Cantwell's tenacity helped position BPA to reach this agreement with Enron that will save money for Northwest ratepayers."

"I’m pleased we were able to convince BPA to get out of these overpriced contracts with Enron," Senator Ron Wyden (D-OR) said. "BPA has now done the right thing with regard to reducing these costs and I hope they find other cost savings for Northwest ratepayers."

Current projections are that the settlement will save Northwest ratepayers $190 million through September 2006. BPA estimates that the $40 million savings will reduce the agency’s proposed 15 percent wholesale rate increase by about two percent. The resolution of legal uncertainty surrounding the $150 million in already-terminated contracts will prevent what could have been another three percent in upward pressure on rates.

"While I’m pleased with these savings, BPA and the Northwest as a whole must remain committed to finding creative ways to cut costs and reduce rates," Cantwell said.

Key facts:

The agreement: BPA pays Enron's creditors $99 million. The payment eliminates BPA's obligation to pay Enron a total of nearly $500 million for about 300 average megawatts of power between 2003 and 2006. The deal saves more than $40 million for Northwest ratepayers while protecting from legal challenge an additional $150 million in savings from contracts BPA unilaterally terminated early in 2002. The total savings to Northwest ratepayers is $190 million. Cantwell, a member of the Senate Energy and Natural Resources Committee, has lead the charge in the Senate in fighting for relief for ratepayers suffering from extraordinarily high energy rates as a result of market manipulation by Enron and others. The internal Enron memos showing price manipulation were released as a result of a FERC investigation requested by Cantwell on January 29, 2002 during a Senate Energy Committee hearing. Cantwell has repeatedly grilled FERC commissioners in Committee hearings, personally lobbied FERC commissioners, written numerous letters, spoken on the floor, and met with ratepayers, economic, and business leaders from Washington state to build support for ratepayer relief. Washington state ratepayers continue to bear the burden of long-term contracts with Enron. Both the Snohomish Public Utilities District and PacifiCorp have filed petitions with FERC for relief under sections 205 and 206 of the FPA from long-term contracts with Enron.