You might enjoy the following SacBEE Article
A California state senator plowing through boxes of subpoenaed Enron Corp. documents has finally unearthed a smoking gun, the first tangible proof that energy traders tried to manipulate the price of electricity amid short supplies last summer.
One problem: The evidence doesn't implicate Enron so much as the managers of California's electricity grid, whose Folsom-based trader was caught red-handed trying to game the market. In a bizarre twist, it turns out that the state-created Independent System Operator, or ISO, was the one rigging the price of power, not the evil private generators who everyone suspected.
Just in case you are not sure what you read. Here is another version of the same event. The Cal ISO called Enron so that the Cal ISO could "game" the system against others. This is reported as news along with the firing of the dispatcher in this SacBEE article
Then there was the time the Cal-ISO asked the Dept of Water Resources to falsify records to game the system. Again Reported in the SacBEE
Dunn and Hidalgo say the incident unfolded Nov. 14, 2001, when the ISO asked the state to buy more power. This is their account:
Even though the state had enough power, the ISO was anticipating repairs on a transmission line would make it essential to draw electricity from two plants -- one run by Duke Energy Corp. and one by Reliant Energy Inc.
Those plants were not prepared to make themselves available, the ISO reportedly told the Department of Water Resources, and it needed the state to promise to buy their power.
When the state objected to the expense, the ISO offered a variation. If the state would submit a "fictitious load" -- falsely inflate future power needs -- then the department wouldn't have to sell power at a loss.
Remember the Cal ISO was the "cop on the beat." The ISO was created to perform "arm's length control of the transmission system and make sure that the market rules were followed. Yet the Cal ISO was guilty as sin in trying to rig the market.
Finally we have the evil SMUD trying to talk Enron into doing evil price manipulation. Documented right here SacBEE article
... the Sacramento Municipal Utility District, which revealed that, just days before the first rolling blackouts struck California, it had conversations with Enron traders about ways that Enron could profit by dealing with SMUD.
SMUD did not take Enron up on any of its offers, said district lawyer Arlen Orchard, although the utility (i.e. SMUD) did engage in what he called "legitimate arbitrage," a trading practice profiting from price differences between markets.
The tangled webs of explanations, definitions and counter-definitions will now be left to FERC to sift through and reach conclusions about what went wrong in California in 2000 and 2001.
"My guess is that everybody is going to say they didn't break rules. You can say that about almost anything," said Kellan Fluckiger, former chief operating officer of the Independent System Operator, which runs most of the state's power grid.
"We have a structure that is inherently so flawed that the number and scope of these opportunities is staggering," he said. The rules are loose that nothing is specifically outlawed, and there are few consequences for misbehavior, he said.
Finally there is my favorite article (that I can't link to) in the May 27, 2002 issue of Clearing UP (article 20) "I didn't Do It," Traders Tell FERC in Trading Inquiry. "Cal-ISO is increasingly taking criticism for allegedly manipulating its own market for the sake of ensuring reliability." That article was also the first I had heard that Mirant had done some improper things at the request of Cal-ISO.
I can't help but wonder how many careers have been destroyed by Davis's political machinations. I'm sure that most of the folks at the Cal-ISO (upper management accepted) are honest people just trying to do a job.
What are they thinking now that they realized that Davis has used them for whores?