Enron's role in state power crisis (Sac BEE explains the Enron lie)

With such menacing names as "Death Star" and "Ricochet," the elaborate trading schemes cooked up by Enron Corp. to hot-wire electricity prices sound like the key to the California energy crisis. The truth isn't so clear. For all its swagger and cleverness -- and despite ex-trader Timothy Belden's guilty plea Oct. 17 to charges of price manipulation -- Enron was something of a supporting player in the drama that consumed California's electricity market during 2000 and 2001, most experts agree. The Houston conglomerate was only a trader: a buyer and seller of electricity produced by others.

As such, it lacked the market clout of electricity generators that dictated prices, the experts say.

So Enron didn’t have market clout. Makes a lot of the things that Gov. Davis and national Democratic party leaders said since Bush was elected, just plane false. At least the truth is starting to get out.

"The easiest way to make money in this market was to say, 'You won't get my power until you pay $500 (a megawatt hour) for it.' It was the simple exercise of market power, not the creative use of loopholes in the rules," said Erik Saltmarsh, executive director of the state Electricity Oversight Board.

I think that Erik has it all wrong. It wasn’t the generators saying “you won’t get my power, it was the ISO, the environmental and the air pollution groups saying you won’t get any power out of this plant. Also it was SCE & PG&E saying we can not pay you because the state won’t allow us to raise rates, but we want power out of your plant. This later point is why so many small renewables and cogeneration projects were off-line.

Just how much money Enron made in California is unclear. FERC said in an August report that Enron earned profits totaling $1.8 billion on the West Coast in 2000 and 2001. The Justice Department said Enron's revenue, not profits, for those two years totaled $1.3 billion.

It is so democratic party political to confuse profits and revenues. I find it a sad statement about the lack of business education in this country. Unfortunately, with Aurthor Anderson helping Enron invent “profit” figures, the revenue may be the only numbers that are really reliable.

Belden almost immediately began probing for weaknesses. One day in May 1999, in what's known as the Silverpeak incident, he arranged to sell 2,900 megawatts of electricity, enough to power a city roughly the size of Sacramento for a few hours, to the California system.

The bid was accepted. That wasn't unusual, but this was: Enron planned to run the electricity through a desert transmission line capable of handling only 15 megawatts, according to officials familiar with the incident.

Because that created a physical impossibility, the deal had to be scrapped and state officials had to scramble to find replacement supplies, officials said. Prices briefly spiked.

So why isn’t the first question, why did the ISO allowed this schedule to be placed in the first place. The ISO should have never allowed the schedule to be placed!!!!!! By never dealing with this obvious market problem, the ISO failed to live up to its regulatory duties.

Good catch!

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California Power Crisis animations featuring Governor Gray Davis

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And who was Enron's number-one, tip-top, peak-of-them-all, highest beneficiary of campaign donations anywhere in the whole U.S. of A.?

Gray Davis.

Click here to download the California Republican Liberty Caucus' tri-fold pamphlet on the governor's race!

It's a .pdf file, so you'll need Acrobat Reader... it's free, and chances are good you already have it on your computer. Try the link and see.

Print it using the printer-icon button in the Acrobat toolbar in your browser (not File|Print in your browser's menu). It's intended for double-sided printing using single pieces of paper-- no stapling needed if you do it that way, and saves trees! ;-) Print one side, then invert the paper and feed it through a second time for the second side. Fold, and sally forth to get out the vote!

Give this to friends, walk your neighborhood, take it to stores, give a wad of 'em to your school, hand some out at your house of worship, at clubs, at stores and small businesses...

Let's retire Gray Davis!

Let's show the media and RINOs that "It's the base, stupid!"

Let's show Gray Davis that money can't buy him love ...or re-election!

Freepers and RLC activists can claim considerable credit for nominating Bill Simon, so now let's elect him!

This is just so hilarious. What imaginations these reporters have. Can't you just hear this exchange in a courtroom:

JUDGE: So Mr. Belden, I understand that in May 1999, you arranged to sell 2,900 megawatts of electricity to California on a transmission line capable of handling only 15 megawatts, is that correct?
BELDEN: Uh, yes your honor, but I was new at the job, and unfamiliar with the system in California. I made a mistake, and the deal had to be scrapped.
JUDGE: I see that your employer had to pay a $25,000 fine to the Power Exchange and pledge never to try anything like that again.
BELDEN: Yes, your honor, but my employer gave me a big raise and asked me to do some more of the same on a bigger scale.
JUDGE: Is that why they went bankrupt?

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