Posted on 01/12/2002 9:35:48 AM PST by vmatt
To my unpracticed eye, this looks like an exemption that allows Enron to act as a trader of energy.
Most of the DOE regulations pertain to generation and transmission -- in which issuance of securities to finance capital improvements would be a standard practice. Trading in energy was a relatively new beast, purportedly "invented" by Enron.
I wonder if this was merely a repeat of some kind of routine exemption granted to trading firms on an annual (or regular periodic) basis.
I don't think it is unusual, a quick search found this:
DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
[Docket No. ER98-2045-000]
Conectiv Energy Supply, Inc.; Notice of Issuance of Order
April 30, 1998.
Conectiv Energy Supply, Inc. (CES) filed an application for authorization to engage in wholesale sales of electric capacity and/or energy at market-based rates, and for certain waivers and authorizations. In particular, CES requested that the Commission grant blanket approval under 18 CFR Part 34 of all future issuances of securities and assumptions of liabilities by CES. On April 29, 1998, the Commission issued an Order Conditionally Accepting For Filing Proposed Tariff For Market-Based Power Sales And Reassignment Of Transmission And Ancillary Service Rights (Order), in the above-docketed proceeding. The Commission's April 29, 1998 Order granted the request for blanket approval under Part 34, subject to the conditions found in Ordering Paragraphs (E), (F), and (H): (E) Within 30 days of the date of this order, any person desiring to be heard or to pretest the Commission's blanket approval of issuances of securities or assumptions of liabilities by CES should file a motion to intervene or protest with the Federal Energy Regulatory Commission, 888 First Street, NE, Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure, 18 CFR 385.211 and 385.214. (F) Absent a request to be heard within the period set forth in Ordering Paragraph (E) above, CES is hereby authorized to issue securities and assume obligations and liabilities as guarantor, indorser, surety or otherwise in respect of any security of another person; provided that such issue or assumption is for some lawful object within the corporate purposes of CES, compatible with the public interest, and reasonably necessary or appropriate for such purposes. (H) The Commission reserves the right to modify this order to require a further showing that neither public nor private interests will be adversely affected by continued Commission approval of CES's issuance of securities or assumptions of liabilities. . . . Notice is hereby given that the deadline for filing motions to intervene or protests, as set forth above, is May 29, 1998.
I have looked but have not found anywhere so far where any of the Democrats in the House or Senate who took contributions from Enron filed a protest as prescribed by law. I haven't found evidence that Ralph Nader or any other consumer rights group filed a protest. I haven't found any evidence that any advocates anywhere filed a protest. Am I still getting the picture?
So, to summarize, the DOE received a request for a waiver as was allowed in the law. The request for waiver became public knowledge. The public, anyone in the public, had the right to protest the waiver. If someone protested, there would have certainly been hearings or a court action to stop it. Tom Dashle or Sheila Jackson Lee apparently didn't try to stop it. The legal waiver went into effect as prescribed by law. I think I understand.
I really am grateful that a space communications contractor did not give money to George Bush and illegally sell technology to a nation which has threatened to incinerate Los Angeles. I'm grateful that President Bush didn't change the law so that a contributor facing an indictment for selling technology was off the hook. I'm grateful that such a lowlife traitorous scumbag who sold additional technolgy to help our enemy was not given any special treatment by President Bush. Finally, I am grateful that we have a president who is trying to build a missile shield because the scumbag who preceded him in office is responsible for the Red Chinese now being able to kill our children with their nuclear weapons.
Citigroup, supposedly one of the most sophisticated financial institutions in the world, now has $3B at risk in unsecured loans to Enron. Unfortunately we are witnessing corporate financial fraud on a grand scale. My (somewhat educated) guess is that some Enron officers, especially the CFO, and accountants at Arthur Andersen are guilty as hell and will be going away for longer than Milken did.
A more interesting note, IMO: Citigroup is Enron's largest unsecured creditor and joe loserman's largest contributor. There is a serious ethical conflict here. Loserman can have significant influence on casting blame and determining just how much of its $3B investment Citigroup ultimately loses. Any bets on whether he recuses himself? I didn't think so.
Federal Energy Regulatory Commission
[Docket No. ER99-4020-000]
Allegheny Energy Supply Company;
Notice of Issuance of Order
October 4, 1999.
Allegheny Energy Supply Company (AE Supply) is a subsidiary of Allegheny Energy, Inc., (Allegheny) the registered holding company for Monongahela Power Company, Potomac Edison Company and West Penn Power Company (collectively, APS Operating Companies). Allegheny is planning to transfer all of West Penn's generating units to AE Supply. On August 6, 1999, AE Supply filed an application seeking authorization to sell electric energy and capacity to the APS Operating Companies and others for resale at market-based rates. AE Supply also requested certain waivers and authorizations. In particular, AE Supply requested that the Commission grant blanket approval under 18 CFR Part 34 of all future issuances of securities and assumptions of liabilities by AE Supply. On September 30, 1999, the Commission issued an Order Accepting For Filing Proposed Market-Based Rates (Order), in the above-docketed proceeding. The Commission's September 30, 1999 Order granted the request for blanket approval under Part 34, subject to the conditions found in Ordering Paragraphs (C), (D), and (F): (C) Within 30 days of the date of issuance of this order, any person desiring to be heard or to protest the Commission's blanket approval of issuances of securities or assumptions of liabilities by AE Supply should file a motion to intervene or protest with the Federal Energy Regulatory Commission, 888 First Street, N.E., Washington, D.C. 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure, 18 CFR 385.211 and 385.214. (D) Absent a request to be heard within the period set forth in Ordering Paragraph (C) above, AE Supply is hereby authorized to issue securities and assume obligations and liabilities as guarantor, indorser, surety or otherwise in respect of any security of another person; provided that such issue or assumption is for some lawful object within the corporate purposes of AE Supply, compatible with the public interest, and reasonably necessary or appropriate for such purposes.
If I understand you correctly, Enron was granted blanket waiver, meaning they are exempt from all requirements of 18 CFR Part 34.
Good work, I think you're right better to get it aired here early. The fact that apparently DOE doesn't have a process of screening before granting waivers? Is the law really just for those who can't get them waived? What kind of government do we have?
That was the closest clause I could find that authorized them to grant a waiver.
There wasn't anything in the code specifically about a "blanket waiver". I assume that's industry shorthand for 34.1c.
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