Calif Grid Operator Issues Power Alert, Supplies Tight

A heatwave in the U.S. Southwest forced California's grid operator to issue a power alert because of tight electricity supplies.

Bill Simon's Enron Ties

by Jason Leopold
The Nation

California GOP gubernatorial candidate Bill Simon Jr. has portrayed himself as a savvy businessman who can deal successfully with the state's financial woes. But Simon's ties to Enron, the bankrupt energy company that has been charged with manipulating the electricity market in California and is under federal investigation, raise questions about his business acumen and his fitness for the state's top post.

White Should Go--Now

by Jason Leopold
The Nation

Army Secretary Thomas White appears to be inching closer to becoming the first Bush Administration casualty of the Enron scandal. Senators Dianne Feinstein and Barbara Boxer of California have asked Attorney General John Ashcroft to launch a criminal probe into Enron's role in manipulating California's electricity market, after Enron memos released by the Federal Energy Regulatory Commission showed how Enron boosted electricity prices in California and created shortages

Murdoch Has The Voice Of Drake, Lyrical Gifts of Chapin and Good Looks of Buckley

By Jason Leopold

The singer-songwriter movement of the new millenium is slowly making a comeback in Los Angeles much in the way the folk music scene dominated Greenwich Village in the 60s and early 70s. Leading the pack is a scrappy European named Alexi Murdoch who has the voice of Nick Drake, the lyrical gifts of Harry Chapin and the good looks of Tim Buckley. At Genghis Cohen Wednesday night, Murdoch performed an intimate 45-minute set of original material that showcased his lyrical gifts not heard since Chapin made a name for himself with "Cats n The Cradle." Murdoch's genuine charm during the performance is a rarity and a refreshing change from the candy-coated pop made famous by so-called singer-songwriters like Dave Matthews. Songwriters in recent years have paid more attention to their music, the sound of the guitar, drums or other instruments, instead of focusing on the craft of lyrics. But Murdoch can tell a story and make a person forget about the music and he recognizes that, albeit by default. He's bound to gain a strong grassroots following, one that is sure to include interest from record companies. Let's just hope the labels don't turn him into a product.

Power Struggle At Calif Grid Operator Could Cost CEO His Job

By Jason Leopold

California's grid operator is in the midst of its own power crisis. An internal struggle between Michael Kahn, the chairman of the California Independent System Operator, and Terry Winter, president and chief executive of the ISO, about allegations of market manipulation by Enron Corp. and other energy companies could cost Winter his job, people close to the matter said Thursday. At issue are the internal Enron memos which describe the trading strategies the company used to boost power prices in California. Winter testified before a Senate committee in Washington, D.C. two weeks ago that California's two-year old power crisis was not caused by manipulative trading tactics detailed in the memos but was instead the result of a poorly designed electricity market and the ability of generators to influence wholesale prices because of an imbalance between supply and demand. Kahn, however, an appointee of Gov. Gray Davis, has said that the Enron memos prove that the company manipulated the energy market in California and has renewed his call for at least $9 billion in refunds. Winter, according to people who work closely with him, is coming under scrutiny because he does not agree with Davis and has not publicly villified the generators. "Terry is a friend of the energy companies," a person who has worked with him at the ISO said. "If there is proof they willfully manipulated the market he'll speak out about it. But he believes these Enron memos aren't the smoking guns. And he's not about to jump on the bandwagon."

Winter has been at odds with Davis since at least December 2000, when Winter went behind Davis' back to ask the Federal Energy Regulatory Commission to remove a cap on wholesale power prices in California because generators were selling their supplies to other states. Davis spokesman Steve Maviglio said at the time that Winter was "adding gasoline to the fire." Shortly after that episode the state Legislature dismantled the 26-member ISO board and appointed six members from his administration. Kahn, an attorney by trade, was appointed chairman. Under Kahn, the ISO board has been criticized for not being an independent body largely because of its anti-generator rhetoric.

But market watchers believe the Enron memos give Kahn the credibility he needs to renew his demand for refunds. Market watchers have criticized Winter's testimony and a recent report by the ISO's market monitoring committee because it clears the ISO for many missed opportunities to spot the alleged market manipulation. "The ISO does not like to admit that they've been outsmarted," said Robert McCullough, a Portland-based energy analyst. "They are willing to accept they were outsmarted on bidding but not on the operation of the grid. Simply put, the ISO's department of Market Analysis is part of their mandate to protect Winter's expertise."

The ISO has managed to escape much of the blame for California's power crisis even though the Enron memos say that traders were able to outfox the ISO and reap windfall profits because of loopholes in the system. While it's too soon to tell how much of an impact Enron or other energy companies have had on California's electricity crisis it's clear that the ISO believes the company barely contributed to it.

Frank Wolak, the head of the ISO's Department of Market Analysis, said that Enron's trading strategies played a small role in the state's power problems, contributing only about $500 million to California's request for $10 billion in refunds from power suppliers. FERC, meanwhile, is conducting its own investigation into Enron's role in California's electricity crisis. The agency is expected to release its findings later this year.

--Jason Leopold; (310)_551-9940; jasonleopold@hotmail.com

California's Power Crisis Caused By Poorly Designed Market, Report Says

A report released Wednesday by an economist at the Pacific Research Institute suggests that California's two-year old power crisis was the result of a flawed market, not the result of manipulation by energy companies such as Enron Corp., Dynegy Inc., and other out-of-state generators villified by Gov. Gray Davis.

May 26, 2002.

BP Reportedly Puts Calpine In Its Crosshairs
--V.K. & Peter Thompson


Oil and gas leviathan BP is reportedly considering acquiring embattled San Jose, Calif.-based independent power producer Calpine, according to market officials in the U.S. The potential sale price could not be determined by press time. Colum Doyle, communications director for gas, power and renewables at BP in London, scotched the talk, noting "there is absolutely no truth in the [rumor] that BP is about to acquire Calpine." Bill Highlander, spokesman at Calpine, declined comment.
BP Reportedly In Deal To Buy Calpine

A number of energy companies have signed affadavits saying they have not engaged in "Enron-like" transactions in the California electricity market.....While it's true that California's power market was designed to allow these companies to exploit loopholes, thus maximizing profits to shareholders, there is evidence that suggests these companies did use manipulative trading tactics similar to that of Enron...STAY TUNED

For months, Democrats on Capital Hill have been trying to glean information from the Bush administration about their contacts with Enron prior to the company's bankruptcy filing in December. Each time the administration says it will comply with the request--whether it be through threats of lawsuits or subpoenas--new information is released that shows top officials in the Bush administration have had more contact with Enron's Ken Lay than they previously said. Much like the questions surrounding what Bush knew prior the september 11 attacks on the Pentagon and the World Trade Center, the administration seems to have had lengthy conversations with Ken Lay and possibly other Enron officials during California's energy crisis and just days before Enron's bankruptcy. Like September 11, lawmakers want to know what the administration knew and when they knew it. On Tuesday, the Senate Governmental Affairs Committee voted along party lines to subpoena the White House to provide contacts with Enron. A short list was delivered to the committee Tuesday afternoon with some new contacts the Bush administration had that hadn't been disclosed previously, but the list still falls short. One can only assume that the administration's contacts with Enron and its involvment with the company is far deeper than they let on.