Senate to investigate market power/price manipulation

Could be a move to create some negotiating leverage to persuade suppliers to
take a haircut on the utilities undercollection.
----- Forwarded by Jeff Dasovich/NA/Enron on 03/14/2001 10:57 AM -----

Jean Munoz <jmunoz@mcnallytemple.com<
03/14/2001 10:32 AM

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cc:
Subject: Senate to investigate market power/price manipulation

Senator Burton and Senator Joe Dunn will "Make an announcement regarding
potential manipulation in the wholesale energy market" today at 11am in room
1190 at the state capitol." (See article below for details).

We will keep you posted.

Thanks,
Jean

--
Jean Munoz
McNally Temple Associates, Inc.
916-447-8186
916-447-6326 (fx)

State Senate panel will probe power pricing

March 14, 2001

By KIMBERLY KINDY
The Orange County Register

SACRAMENTO A newly formed Senate committee will investigate whether power
producers manipulated the electricity market and overcharged the state for
energy.

State Sen. Joe Dunn, D-Santa Ana, will chair the committee, which will
immediately request records from the power merchants and next month will
interview employees in an attempt to determine whether allegations of
collusion among energy producers are true.

"What has really caused me to push for this investigation is their behavior
mirrors one another,'' Dunn said. "I don't know how that could occur. They
seem to be clones of each other."

The power producers said the investigation is a waste of time, that they have
done nothing to manipulate the marketplace.

"They can look all they want,'' said Gary Ackerman, executive director of the
Western Power Trading Forum, a trade group representing power merchants.
"They aren't going to find evidence."

Dunn said hearings will be held to review the documents and to conduct the
interviews in public. The investigation is expected to be completed within
two months.

The aim is to identify problems with the structure of the market that may
have allowed generators to manipulate prices, and to determine whether there
was any illegal activity.

In the case of market structure flaws, Dunn said senators would work to make
necessary changes through legislation or by working with federal regulatory
officials. Any proof of illegal activity would be forwarded to state Attorney
General Bill Lockyer, whose office is conducting its own investigation.