Date: May 7, 2002

Contact: Jerry Flanagan, CALPIRG (916) 448-4516

Enron Memos Confirm Energy Price Fixing

SACRAMENTO -- Several memos written by outside attorneys for Enron were released yesterday confirming that the once prominent energy trader used creative trading practices to artificially drive up the price of power in California. Few if any if the pricing strategies are currently outlawed by the Independent System Operator (ISO), the entity responsible for managing California's energy system under joint federal and state oversight.

"We have know for some time that Enron and other energy traders were deliberately gaming the market," said Jerry Flanagan, Energy Advocate for CALPIRG. "These memos provide the evidence in black and white."

The Davis Administration has called on the Federal Energy Regulatory Commission (FERC) to require state electric utilities to refund billions of dollars of electricity overcharges to California. In recent months, Governor Davis has begun to renegotiate a handful of the long-term electricity contracts authorized during the state's energy crisis that locked state consumers into artificially high electricity costs.

CALPIRG urges the Davis Administration to:

• Renegotiate as many long-term contracts as possible to achieve both a lower cost for power and a lower volume of fossil fuel power.
  
• Increase renewable power use in order to inoculate state consumers from inevitable spikes in the natural gas markets.
  
• Create new state regulations to outlaw deceptive energy trading practices.
  
• Approve new legislation (SB 2000, Senator Dunn) to raise penalties for exercising anti-competitive practices in the electricity and natural gas markets.

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