California Consumer Group Says Enron, Lay Must Be Held Responsible For Energy Deregulation Fallout
Kenneth Lay, who is expected to avail himself of his Fifth Amendment rights during Congressional hearings, should be asked to respond to a series of questions concerning his firm’s role in the California deregulation debacle that will cost Californians over $71 billion, according to consumer advocates with the Foundation for Taxpayer and Consumer Rights (FTCR).
“Lawmakers must not let Ken Lay off the hook. He should be asked each and every question that the public needs answered, even if he chooses to take the Fifth every time,” said Doug Heller of FTCR.
Because the public deserves an airing of the questions that Congressional investigators and others had prepared for Ken Lay, FTCR is calling on legislators to fully question the former Enron chief. Consumer advocates with FTCR have presented the following questions concerning Enron‘s relationship to the California energy crisis to members of the Senate Committee questioning Lay on Tuesday:
1. If California spot market prices had remained as high in the second half of 2001 as they had in the first half of 2001, is there a chance that Enron would have been able to avoid bankruptcy? (Former Enron CEO Jeffrey Skilling said, in testimony on Thursday February 7, 2002, that Enron faced “terrible problems” because the California energy crisis had been “solved.”)
2. Enron‘s profitability in the first six months of 2001 increased 32% over the same period in 2000. How much of that increase was attributable to profits in the California market?
3. Power companies signed very lucrative contracts with the state of California during the spring of 2001 totaling at least $43 billion over two decades. Why didn’t Enron sign any long-term contracts with the state?
4. What percentage of the electricity sold in California’s wholesale market between June 2000 and June 2001 went through the Enron system, either because Enron traded the power, or others did so using Enron Online? (Lawmakers should demand a record of all Enron‘s energy trades involving power produced or consumed in California.)
5. How much money did Enron earn as a result of buying and selling electricity generated in California and/or consumed by Californians
6. How much did the company make as a result of California power traded by other companies on Enron Online?
7. What was the highest price Enron charged for power sold into the California grid during the California energy crisis?
8. On an average day in California, how many megawatt-hours of California power would Enron trade?
9. How many contacts did Ken Lay have with members of the Bush Administration or FERC, including any meetings and phone calls between Ken Lay and President Bush, the Vice-President, members of the Cabinet or FERC Commissioners. What was the substance of those contacts?
10. What was the purpose and substance of the May 11, 2001 meeting with then-Mayor Richard Riordan, former junk bond king Michael Milken, and Arnold Schwarzenegger? Lawmakers should obtain the materials Ken Lay provided at that meeting.
“Among all the victims of Enron‘s shenanigans, none have received as little attention as the taxpayers and consumers of California, who were squeezed out of billions of dollars by Enron and the power industry as a result of energy deregulation.”
Read FTCR’s report HOAX: How Deregulation Let the Power Industry Steal $71 Billion From California.