Energy
Energy Task Force Latest News
Listen For Yourself
"Enron Tapes"
These recordings provide powerful evidence of the market misconduct that inflicted so much harm on California businesses and consumers. Hear for yourself how Enron traders and their partners bragged and laughed about stealing money from "Grandma Millie" and California. (Note: These excerpts are uncensored and may contain vulgar language, such as exchanges in "Grandma Millie," "Needing Blackouts" and "Reliant Making A Killing.")
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Grandma Millie / Let California Float Out To The Pacific / Crushing The Economy
[AUDIO 5250 kb / 11:34 min]
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Burn Baby, Burn
[AUDIO 780 kb / 1:48 min]
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Needing Blackouts / Kill The Californians
[AUDIO 5250 KB / 11:44 min]
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Cause Downfall Of California / Pull Megawatts Out of State
[AUDIO 945 kb / 2:23 min]
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Fat Boy / Scooping Money Into Buckets
[AUDIO 2045 kb / 4:21 min]
"100-Day Tapes"
In March 2003, the Federal Energy Regulatory Commission was presented with transcripts of conversations involving traders for major energy companies showing that power generators and sellers broke FERC rules and the law during the California Energy Crisis. Here are some of the audio excerpts.
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Reliant Stonewalling ISO
[AUDIO 327 kb / 0:41 min]
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Reliant Making A Killing
[AUDIO 3156 kb / 6:43 min]
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Reliant Withholding Power To Get Top Dollar
[AUDIO 3015 kb / 6:25 min]
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Avista-PG&E Withhold Call
[AUDIO 1720 kb / 3:58 min]
During the 2000-01 California Energy Crisis, the electricity market suffered a meltdown in the state. Rolling blackouts plunged businesses and residents into darkness while power companies inflicted financial pain on ratepayers. Responding to the crisis, the Attorney General established the Attorney General's Energy Task Force to investigate and seek remedies for the harm caused by market manipulation and other unlawful conduct.
Taking action against power generators and traders for unfair business practices, commodities fraud and antitrust violations, the Attorney General's Energy Task Force filed dozens of lawsuits and worked to undo price-gouging long-term contracts that had been signed under duress by the state in the midst of the California Energy Crisis.
The task force further pressed the Federal Energy Regulatory Commission (FERC) for billions of dollars in refunds from energy companies that charged unjust, unreasonable rates. Despite legal roadblocks and major hurdles thrown up by FERC, the Attorney General to date has recovered more than $3.3 billion from power companies, including more than $2.5 billion in ratepayer benefits. The Attorney General will continue to pursue before FERC and in the courts the long-delayed justice California ratepayers deserve. [See Chart: Getting Our Money Back]
In 1999, the first full year of deregulation, California expenditures on wholesale electricity totaled $7.4 billion. Just one year later, those costs rose 277 percent, to $27.1 billion. In 2001, wholesale prices remained at the exorbitantly high level of $26.7 billion. Deregulation was supposed to bring cheaper, more reliable power. What California businesses and consumers got instead was gouged.
The tools energy traders used to pour profits into their pockets were market gaming devices bearing such provocative names as Fat Boy, Death Star, Get Shorty and Ricochet. The evidence shows generators lied to power grid operators and withheld electricity to further increase prices. In audio tapes one of the masterminds of market manipulation, Enron, even bragged about stealing money from "Grandma Millie" in California. [To hear the conversations yourself, go to Listen Here - The Energy Tapes]
When the state's investor-owned utilities could no longer afford to pay sky-high wholesale prices, the state stepped in to make sure the lights stayed on. Energy companies then proceeded to hold up the state, both in the day-to-day market and in long-term contracts that sought to guarantee hefty profits.
Unfettered by federal energy regulators, power generators and traders plundered California, overcharging ratepayers by some $9 billion. They wreaked havoc on the state's economy, with some experts putting the total tab at more than $40 billion. PG&E went bankrupt, and Southern California Edison came close.
The Attorney General examined the breakdown in the state's deregulated energy market from a law enforcement perspective. The review yielded the Attorney General's Energy White Paper: A Law Enforcement Perspective On The California Energy Crisis 
[PDF 1.24 mb / 90 pg] that called for major reforms of the legal and regulatory framework that governs California's wholesale electricity market. The findings conclude that the oversight and enforcement system failed during the California Energy Crisis, worsened the effects of the energy crisis and has undermined the ability of ratepayers to obtain redress for price gouging.
"California is still reeling from the Energy Crisis of 2000-01 and trying to understand what went wrong," The Attorney General said in releasing the report. "From a law enforcement perspective, substantial reforms are needed to fix the defects. The current system serves to shelter wrongdoers, provides powerful incentives for energy sellers to game and gouge and too often leaves ratepayers in the dark."
The 90-page report has been sent to Congress, the California Legislature, the governor and state and federal regulators with recommendations for needed changes.