Federal regulators question legality of Enron contracts

[JURIST] The Federal Energy Regulatory Commission (FERC) [official website] released a six-page order Friday evening suggesting that the Enron Corp. [official homepage] was engaging in illegal activity when it entered contracts with utility companies and cities during the energy crisis of 2000-01. The order marked the first time the commission has noted that such contracts may have been signed fraudulently. The invalidation of the contracts would be a major victory for utilities and cities who ended their dealings with the disgraced energy giant during the company's 2001-02 downfall. Upon bankruptcy, Enron sued power companies in Nevada and Washington and the California cities of Palo Alto and Santa Clara for the hundreds on millions of dollars that it would have made had the contracts been fulfilled. Rather than raise $122 million alone, the Snohomish County Public Utility District [official website] produced evidence [press release] that Enron's conspiracy began in 1997. The FERC stated that a hearing is necessary to determine Enron's ability to collect future profits. The hearing is expected in May, and FERC's final decision is anticipated late this year. AP has more.

 

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