LOS ANGELES (AP) — Newly released federal documents suggest that the Los Angeles suburb of Glendale helped Enron Corp. traders manipulate California's energy market to drive up prices, a newspaper report reported Saturday.
The Federal Energy Regulatory Commission documents show municipal utility managers even quizzed employees on a Fat Boy strategy — the nickname Enron gave a trading scheme to create the appearance of power shortages. Several wrote on a February 2000 test that it involved splitting profits or losses with Enron, the Los Angeles Times reported.
The Glendale utility was among several public agencies that allegedly engaged in price gouging during the state's 2000-2001 power crisis, but it stands out due to the sheer volume and detail of evidence against it, the newspaper said.
City officials have said that they agreed to share profits with Enron from the sale of surplus electricity produced by the city's power plant but that an investigation found no wrongdoing.
"It made no sense for Glendale to try to manipulate the market to drive up prices," Glendale City Manager James Starbird said. "We were buying three times as much energy as we were selling."
State and federal officials have not provided estimates of Glendale's profits from its partnership with Enron; however, Starbird put the number at $3.9 million.
Glendale, along with Burbank, Turlock, and the Imperial Irrigation District, previously told federal regulators they provided quantities of power too small to influence prices.
California this month gave FERC more than 3,000 pages of confidential documents to illustrate how energy traders and some municipal utilities manipulated the state's power market to drive up prices. The state is hoping for $9 billion in refunds.
FERC estimated that the now-bankrupt Enron made more than $500 million in online trading in 2000 and 2001. FERC investigators recommended the companies be forced to give up unfairly earned profits.