Ann de Rouffignac
OGJ Online
HOUSTON, Feb. 13 -- The Federal Energy Regulatory Commission Wednesday said it will investigate if Enron Corp. or its subsidiaries manipulated gas and electric prices in the West from Jan. 1, 2000, forward.
The commission ordered the staff to conduct a fact-finding investigation into whether Enron manipulated short-term prices in electric energy or natural gas markets in the West or otherwise exercised undue influence over wholesale prices. FERC will also look into other factors that may have influenced contract terms.
FERC is looking into the potential that Enron caused unjust and unreasonable rates in long-term power sales contracts subsequently entered into by sellers in the West. In testimony before a US House Energy and Commerce Subcommittee hearing Wednesday, FERC Chairman Pat Wood said energy customers were asking questions about price manipulation by Enron, which filed for protection from creditors Dec. 2.
Wood said FERC would work with the US Federal Trade Commission to get the "full picture." The idea of the investigation is to prevent any "future Enrons," he said.
However, Wood insisted Enron's collapse did not disrupt the energy markets, which suffered no "significant damage from Enron's exit." Wood said that there were few disruptions of physical gas and electricity delivery either.
Wood told the investigating committee the Enron debacle should not slow down development of fair and balanced competitive electricity and gas markets. But committee members quizzed Wood about price transparency in the public marketplace for gas and electricity.
"I would say a muddled no," said Wood. "We can't get information out there so a buyer and seller know that the deal they just did is in the market."
Wood said an exchange market is useful because of the price discovery function. "There is information in an exchange market that you don't get on a bilateral market," he said. But all in all the energy markets are sound, he concluded because the other players "saved the country and digested Enron, rather ruthlessly."