06.20.06

Cantwell Supports Call for Northwest Hearings on FERC’s Proposed Enron Settlement

WASHINGTON, DC – U.S. Senator Maria Cantwell (D-WA) today backed the request of Northwest businesses and utilities for the Federal Energy Regulatory Commission (FERC) to hold public hearings in the region on the Commission’s proposed settlement with Enron. Earlier this spring, Cantwell led a bipartisan delegation of senators in opposition to the settlement proposal, which could short-change Northwest ratepayers and prevent Enron evidence from becoming public. The settlement would also leave unaddressed Enron’s claims against entities such as Snohomish PUD and Ash Grove Cement, which the bankrupt energy trader is suing for profits on power it never even delivered.

“Five years after the Western energy crisis, consumers and businesses are still waiting for justice from the biggest corporate swindle in American history,” said Cantwell, a member of the Senate Energy and Commerce Committees. “This isn’t an abstract issue to be argued on paper by Enron’s high-priced lawyers in the other Washington. It’s important that federal regulators hear directly from the people and businesses who will pay the price for this decision.”

Despite overwhelming evidence against Enron, the joint settlement proposed earlier this year by FERC trial staff and Enron would return less than $3 million to Northwest parties who have not yet settled their claims with the bankrupt energy giant. This compares to the more than half a billion dollars paid to Enron’s lawyers and executives throughout the company’s bankruptcy proceedings. Another condition of the proposed settlement would require FERC staff to withdraw from the public record evidence concerning Enron that remains sealed. As written, the Commission’s trial staff would also give up any right to pursue pending and future claims under the energy bill’s Cantwell Amendment (Sec. 1290). A product of bipartisan consensus adopted during the Senate Energy Committee’s mark-up of the Energy Policy Act of 2005, this law established that FERC should be the final arbiter in deciding whether Enron should get to collect “termination payments” for power it never delivered to utilities and businesses in the West. Enron has sought to collect these payments—totaling hundreds of millions of dollars—through the Bankruptcy Court, side-stepping federal energy regulators.

Businesses and utilities with claims for relief under the Cantwell Amendment include: Washington state’s Snohomish Public Utility District, for an estimated $120 million; Ash Grove Cement Company, headquartered in the Midwest but with western operations in Oregon, Washington, Montana, and Idaho, for $4.2 million; Luzenac America, with western operations in Montana, for approximately $6.8 million; the City of Vernon, California, for $14 million; and the Metropolitan Water District of Southern California, for approximately $1.2 million.

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