Enron settles California price-gouging claim
Last Updated: Friday, July 15, 2005 | 5:34 PM ET
CBC News
The deal gives California $47 million US cash. As well, the state joins Oregon and Washington as an unsecured creditor in Enron's bankruptcy. The states are owed almost $1.5 billion US.
Unsecured creditors typically get a fraction of what they are owed in bankruptcy proceedings, and on its website, Enron says it does not expect to have enough assets to satisfy all the claims against the company.
The U.S. national regulator, the Federal Energy Regulatory Commission (FERC), claimed the deal resulted from its enforcement actions.
"With today's announcement, the tally of settlements stemming from the 2000-2001 western energy crisis that the commission has either accepted or helped realize is now nearly $6 billion," chairman Joseph Kelliher said in a statement Friday.
California Attorney General Bill Lockyer, who has been attacking energy trading companies like Enron for alleged gouging, welcomed the settlement.
He has also gone after Powerex, a subsidiary of Crown-owned B.C. Hydro, filing a new lawsuit in February alleging the B.C. company held the state ransom with manipulated power prices.
Hydro rejected the allegations, calling the case "legal blackmail" and saying California still owes Powerex money for power delivered in 2000 and 2001.
- FROM OCT. 31, 2003: Hydro subsidiary cleared of price gouging
Hydro also says it was cleared of gouging by FERC.
The Enron agreement requires approval by the bankruptcy court and FERC.
The California deal will make it easier for Enron to move on and pay other creditors. It owes an estimated $65 billion to $75 billion US.
