Review requested for Enron, Powerex

Scott Simpson, with files from Grant Robertson
Vancouver Sun
04-Mar-2005

COMMENT:See as well these two other recent articles, especially the notes by us in the "Hydro tied" piece.

California demands $1 billion from BC Hydro

Hydro tied to power scheme

Alberta's energy market regulator is asking the federal Competition Bureau to reopen its file on allegations of market manipulation and collusion by Powerex and Enron, the agency announced Thursday.

The Market Surveillance Administrator (MSA) said it will ask for the review after examining documents obtained from U.S. investigators who are looking at the role of Enron and other energy companies in connection with the California energy crisis of 2000-2001.

New evidence, including recorded phone conversations where Enron traders can be heard negotiating with B.C.'s Powerex, requires closer inspection, said Martin Merritt, head of the MSA.

The MSA says the new material includes "transcripts and summaries of communications alleged to have occurred between Enron and Powerex in 1999."

"The nature of the communications shown in the new information is of concern to the MSA. Those communications appear to reflect arrangements which might be challenged under federal competition law," the MSA says in a news release.

Potential new evidence of collusion in Alberta first came to light in January after a Washington state utility came across references to a "Project Stanley" -- as in Stanley Cup -- in Enron documents they were examining in a lawsuit against the disgraced Houston-based energy trading company.

California Attorney General Bill Lockyer has filed a $1 billion lawsuit against BC Hydro in connection with the crisis.

The Enron documents talk about successful bidding strategies in the newly deregulated Alberta power market, and make reference as well to Powerex, the power trading arm of BC Hydro.

The Bureau originally examined allegations of market gaming by Powerex, in combination with Enron, in 1999 but came away satisfied no illegal action had occurred.

The Bureau will look at the evidence to determine if it alters the watchdog's 2000 decision, said Denyse MacKenzie, senior commissioner in the office's criminal matters branch.

"At that time [2000] this new evidence wasn't available," MacKenzie said. "We will look at that very closely and see whether or not there is any evidence of a violation of the act and ... then proceed with the appropriate action."

BC Hydro stated in an e-mail that it has not been contacted by MSA "regarding any reopening of its investigation of Powerex transactions."

"Powerex was investigated and cleared by the Canadian Competition Bureau in December 2000, of an allegation of collusion between itself and Enron Canada Corp. related to trade transactions with Alberta," said the e-mail from Hydro media relations manager Elisha Moreno.

"The Competition Bureau found that Powerex and Enron acted independently. Powerex does not have knowledge as to what Enron was doing in the Alberta market at the time in question, but has reviewed all its own transactions and found nothing improper. Powerex is confident that its transactions were within the rules."