DukeEmployees.com - Duke Energy Employee Advocate
Deregulation - June, 2001 - Page 2
The Orange County Register - By KIMBERLY KINDY - June 22, 2001
Three former Duke Energy workers say they were ordered to tamper with equipment at a San Diego County power plant - causing mechanical problems that helped drive up electricity prices during the state's energy crisis.
The workers say they will offer eyewitness testimony to a state Senate committee today - the first public accounts from power plant employees of how energy production may have been manipulated.
Duke officials deny most> of the allegations. The whistle-blowers - mechanics Ed Edwards and Glenn Johnson and control room operator Jimmy Olkjer - lost their jobs four months ago.
State Sen. Joe Dunn, the Santa Ana Democrat who is chairing the investigative committee on price-fixing, said his staff will attempt to verify the accounts from the whistle-blowers. But their mere presence in a Capitol hearing room is expected to set off a media circus. And if the accusations are true, it could have wide-ranging effects on the North Carolina company's operations in California. Duke officials were working late into the night to prepare for the hearing and have scheduled a news conference later today.
"They were doing all kinds of things that didn't make sense," Johnson said in an interview. "But if you asked them why, to explain, they told you to shut up and do your job."
The testimony comes on the heels of a Federal Energy Regulatory Commission ruling Thursday ordering Duke to refund $10 million in overcharges for January 2001.
"This information lends credence to the concern that there was a deliberate strategy for outages for the sole purpose of impacting price," Dunn said. "What they are saying is disturbing."
Duke Energy spokesman Tom Williams said the fact that the former workers lost their jobs may be shaping their testimony.
"The proof is in the pudding. Production is up and we've had fewer forced outages since we've taken over,'' said Williams.
But control-room logs obtained by The Orange County Register show Duke's trading arm ordered its South Bay power plant in Chula Vista to reduce production minutes after Stage Three alerts were issued. The logs are for January 2001 - the same month that Duke was accused of overcharging in California.
The three former Duke workers each worked at the Chula Vista plant for more than two decades when it was owned by San Diego Gas & Electric. They lost their jobs when Duke assembled a new team to run the plant.
The three whistle-blowers outlined their accusations in interviews with the Register. The accusations include:
The company ordered workers to throw unopened boxes of bolts, steam seals, valves and other parts into Dumpsters. The parts were needed to perform routine maintenance but were no longer available when repairs were required. Duke officials acknowledge that new parts were discarded, but say the high inventory tax made it more efficient to order parts as needed because they could be delivered within 24 hours.
Edwards and Johnson say they were ordered to dismantle critical equipment necessary for the generating units to run at full capacity. Because parts were thrown away, they couldn't make repairs and generators ran at diminished capacity for days or weeks. Energy experts say this allegation, if true, would allow Duke to withhold energy from the marketplace, which could drive up the price. Duke officials counter that production has increased at its power plants and forced outages have decreased since they took over. But in late 2000, there was a spike in outages at the Chula Vista plant, according to records kept by the state's power-grid operator. The plant reported 3,000 hours of outages from October through December. There were relatively few outages before that.
The mechanics say the inability to perform repairs forced them to use a small, expensive generator that was rarely powered up before Duke took over the plant. Experts say that could have been used to exploit federal rules allowing generators to justify prices based on the costliest units online.
Olkjer says he received orders from Duke's trading arm to reduce production. Then, when energy prices jumped, he would get new instructions to power up again. Duke officials did not respond to Olkjer's claim.
Stanford professor Frank Wolak, an expert in California's energy market, said that if their testimony can be proven, the state could be refunded millions of dollars and future energy prices could be dramatically reduced.
"What they are saying is amazing. This is a classic plot. I've always wondered how they kept the generators out for so long,” said Wolak, who heads an electricity market surveillance for the California agency that oversees the buying and selling of power. "They were very happy to have them off-line because it allowed them to make more money.
Wolak said the testimony seems to back up research conducted by the state Independent System Operator, which runs most of the state's power grid and oversees the buying and selling of electricity in California.
In a report to federal regulators, ISO said that from May to November 2000, Duke withheld electricity from the state's power grid 80 percent of the time. The report accused more than a dozen power plant companies of powering down generators to create scarcity in the marketplace that would in turn drive up prices.
In a separate report, the state power grid operator accused Duke of overcharging California again in January of this year, resulting in the $10 million refund order. Duke officials say charging $3,880 a megawatt-hour was justified during a short period of time. Federal regulators disagreed and said the power merchant should have charged no more than $273 per megawatt-hour.
Williams, Duke's spokesman, said that the company has been an ethical operator.
"All but 1.1 percent of the time, we were operating. That's very good,'' said Williams, adding that when SDG&E owned the plant forced outages took place 1.8 percent of the time.
But Dunn said that if the testimony from the whistle-blowers is true, and Duke had the ability to manipulate prices, federal regulators would be required under the Federal Power Act to move them out of the competitive marketplace.
This would mean they would be moved back into a "cost-based" market structure and would only be allowed to recover costs at a fair rate of return.
"This would bring the prices down dramatically in California,'' Dunn said. "What generators fear most is being returned to cost-based rate regulation."
The Mercury News - BY DION NISSENBAUM - June 22, 2001
A major energy company accused of gouging California ran one plant like a ``yo-yo,'' scaling back the flow of electricity even as the state was trying desperately to find power to avert blackouts, a former plant worker told state investigators Friday.
In a packed Capitol hearing room, former mechanic Glenn Johnson called such actions at the Chula Vista plant run by Duke Energy ``absolutely, unconscionably wrong.''
Armed with control room logs taken from the plant, Johnson and two other former plant workers publicly offered the special Senate committee investigating alleged price gouging the first inside accounts of power plant operations and provided them with hard evidence for their ongoing investigation.
Lawmakers said they wouldn't draw conclusions until they get a chance later this summer to hear from Duke, which leases the plant from the Port of San Diego.
But one senator, Steve Peace, D-La Mesa, said he is already convinced that Duke has broken its contract, which requires the plant to use ``prudent practices.''
``I believe the evidence is clear that Duke has operated, and is operating, in violation of its lease,'' Peace said. ``I believe the port can take it back.''
While not given a chance to rebut the testimony at the hearing, Duke executives dismissed the three men as misguided former workers who had small roles in a big operation and didn't understand what they were seeing.
``This is one more page in a very long chapter of misinformation disseminated by people who are not telling, or do not know, the full story,'' said Bill Hall, vice president of Duke's West Coast operations.
Duke did change the amount of energy it produced, Hall said. But, in every case, he added, the company did so at the direction of state regulators who oversee the ebb and flow of power.
``Duke Energy is not gouging,'' he said.
Senate investigators plan to match state records to the Duke logs to see if, as the company executives argue, each decision was made at the request of regulators. After reviewing the records Friday afternoon, the committee staff expressed skepticism about Duke's contention that the decisions, some of them made after midnight, were directed by state officials.
Assistant plant operator Jimmey Olkjer decoded the handwritten logs for lawmakers, pointing out when and how Duke shifted power production. In one case on Jan. 16, the logs show, the plant directed workers to slow production from 92 megawatts to 30 megawatts. An hour later, the state issued a Stage 3 alert indicating power reserves were low and blackouts imminent. In the next few hours, Duke pushed production up to 149 megawatts.
Such moves, Olkjer said before the hearing, appeared to be an effort to manipulate the market to boost prices.
California uses complex maneuvers to make sure that it has enough power. At times, because of congestion on transmission lines, regulators actually pay energy companies to scale back production because they can't move it around the state.
But state regulators declined to comment on the allegations or the logs, saying they are prevented from discussing specific arrangements with Duke or other private companies. The Chula Vista plant produces enough power for about 500,000 homes. Duke has leased the plant since 1998.
Along with the state's other major power producers, Duke is under intense scrutiny for its actions in California's dysfunctional electricity markets. The company is facing state and federal investigations, as well as a class-action lawsuit.
Lt. Gov. Cruz Bustamante, who is spearheading a taxpayer lawsuit against Duke and other power companies for alleged price gouging, called the whistle-blower testimony ``the tip of the iceberg.''
This week, federal officials again ordered Duke to refund California what could be millions of dollars for alleged overcharges. Duke has admitted that it charged a record $3,880 per megawatt-hour in January for some of its power. The company said it provided the power at California's request as the state tried to head off blackouts, tacking on an 80 percent surcharge because of Pacific Gas & Electric Co.'s credit problems.
Executives for Duke and other power producers will head to Washington, D.C., next week to take part in marathon settlement talks over alleged price gouging. Gov. Gray Davis and other California leaders contend that the companies overcharged the state by nearly $8.9 billion.
At the hearing, Olkjer and Johnson were joined by former mechanic Ed Edwards. All three worked for the plant's former operator, San Diego Gas & Electric, and continued working during a two-year transition period when Duke took over. They were all let go in April.
Edwards and Olkjer told the committee that they had stellar personnel records. Johnson conceded that he was not considered a model employee because he sometimes complained to his union about mistreatment and spent a lot of time off work serving in the California National Guard.
Johnson and Edwards told lawmakers that they were directed to throw out perfectly good spare parts to clear space in the plant. They said that sometimes caused delays of days or weeks in getting it back up-and-running.
Duke said it threw out the spare parts to get rid of old or obsolete equipment.
The hearing drew sharp criticism from the state's largest independent power producer group.
In a letter to Sen. Joe Dunn, the Garden Grove Democrat heading the committee, the group accused lawmakers of setting aside facts in pursuit of a media event ``giving credence to the unsustainable allegations of disgruntled employees.''
``The committee is at a crossroads,'' wrote Jan Smutny-Jones, executive director of the Independent Energy Producers. ``It can choose to engage in fact-finding and analysis, or it can be reduced to a witch hunt in pursuit of headlines.''
Dunn angrily challenged the characterization of his hearings and said he plans to give Duke and other power companies plenty of time to respond in the coming weeks.
Sen. Bill Morrow of San Juan Capistrano, the ranking Republican, agreed with Dunn and rejected notions that the committee is a ``kangaroo court.''
The Charlotte Observer - By PETER WALLSTEN - June 22, 2001
Three former Duke Energy workers will tell California lawmakers today that the Charlotte company deliberately manipulated production at a San Diego-area power plant to drive up profits.
One worker will describe entries in a plant log book from several days in January showing the plant's production varied greatly from hour to hour, specifically under orders from officials at Duke's energy-trading headquarters in Salt Lake City.
"Sometimes the charts looked like a yo-yo," Jimmy Olkjer, 56, a former assistant control operator who worked 18 years at the South Bay plant, told The Observer on Thursday. "The charts would go up when they got the megawatts they wanted and then they'd go down when they wanted it down."
The three men scheduled to testify lost their jobs in April under a Duke reorganization.
Duke officials, taken by surprise late Thursday by news that the workers would testify, denied the workers' claims.
Duke spokesman Tom Williams said the variations in power production were a result of orders by the California Independent System Operator, the agency that directs the state's power grid and monitors demand.
"There are good reasons for all of this," he said.
Williams said the plant increases and decreases production based on the needs of the market.
"If the price goes down, we ramp it down," he said. "It's not our intent to run power plants whose units you lose money on when the cost of production is higher than the sales price."
The former workers are scheduled to testify this morning in Sacramento at a hearing of the state Senate Select Committee to Investigate Price Manipulation of the Wholesale Energy Market.
The hearings have been going on for several months, and will continue in July, when Duke and other generators are expected to make their case.
In previous testimony to the committee, economists from Stanford University and the ISO cited their reviews of confidential pricing data to demonstrate that each of the five largest power generators to enter California since that market was deregulated, including Duke, deliberately withheld power to limit supply and drive up prices.
Duke sold some electricity to the state ISO in January for $3,880 per megawatt hour. That price, first reported by The Observer, is the highest known sales price in California's energy crisis and is thousands of dollars higher than a normal rate.
One of the economists, Stanford's Frank Wolak, compared the generators' actions - and denials - to an employee who calls in sick to his job.
"You can't go to his house and check to make sure he's sick; you just take his word for it," Wolak said.
The three workers, whose testimony was arranged by a San Diego lawyer suing the state's generators on claims of price manipulation, would provide the first eyewitness accounts alleging price manipulation.
Duke took over the South Bay plant in April 1999 from San Diego Gas & Electric, which was required to divest its plants as part of the state's deregulation. Duke leases the plant from the Port of San Diego, which purchased it from SDG&E for $110 million and struck a deal with Duke to operate the plant for about 10 years.
In interviews with The Observer, the former workers cast an array of claims against Duke that they plan to detail under oath at today's hearing.
According to the workers, soon after Duke's takeover of the plant, company officials made clear that the environment had changed.
"Duke told us personally at one big meeting that they were in the business of making money, not service," Olkjer said. "They said if they could make more money off natural gas that we burned than the megawatts we produced, they'd shut the units down and sell natural gas."
The most serious charge involved the log books and the claim that Duke traders were responsible for deciding how much power to produce at any given time.
A portion of Duke's electricity is sold on the "spot market," which means the price it receives can change hour to hour, depending on supply and demand. Economists and other critics of the generators have alleged that, as the state's reserves shrink during peak times, the companies withhold supply to drive up prices.
The former Duke workers say the practice was engineered directly from the headquarters of Duke Energy Trading and Marketing, where traders buy and sell power on a trading floor.
"A lot of times, I would answer the phone, and they would say, `This is Sherry at DETM. I want you to run the unit at this or that number of megawatts,'" Olkjer said.
The log book pages, which Duke officials say were stolen, represent several days in January when ISO declared emergencies because state reserves were perilously low.
One worker said he was often ordered to do unnecessary maintenance on certain equipment, taking some generation units offline. "They never told us why we had to do it," said Glenn Johnson, 52, a plant mechanic for about 25 years.
"It was their legal way of decreasing load."
The workers also will testify that Duke ordered them to throw away hundreds of pieces of usable equipment to avoid paying inventory taxes and frequently used an inefficient gas turbine to drive up costs, and, therefore, justify higher prices for power sold by the more efficient units.
In both instances, Duke denies wrongdoing. Williams said there was no need for excess inventory, and said the gas turbine is a useful tool that helps Duke operate more efficiently.
In Washington, meanwhile, the Federal Energy Regulatory Commission has directed Duke to repay what could amount to millions of dollars for the January sales at $3,880 per megawatt hour, Bloomberg News reported Thursday.
The commission said Duke should have charged no more than $273 per megawatt hour. Duke's sales at the high rate totaled $19.4 million.
Duke said 80 percent of the rate represented a poor-credit surcharge to the ISO, which had not been paying its bills. On Monday, the commission limited such surcharges to 10 percent.
Duke has said it was never paid for the sales but will refund anything over the commission's price when it collects on the bill.
Duke Energy Employee Advocate - June 22, 2001
Developments in California's energy crisis
Power plant foes fired up over ruling
Showdown next week in Western energy wars
Board wants to take back control of setting plants' property taxes
Enron CEO gets pie in the face from a protester
Bush Loses Favor
The Washington Post - By P. Behr, J. Eilperin - June 21, 2001
Two members of the Federal Energy Regulatory Commission said yesterday that they are prepared to order California's energy suppliers to make heavy refunds because of overcharging during the state's energy crisis.
But the two commissioners -- Pat Wood III and William T. Massey -- agreed with their FERC colleagues to give California officials and energy companies a chance to settle the multibillion-dollar refund dispute in the next three weeks before the commission acts.
Wood, who was appointed by President Bush and is expected to be named chairman later this year, according to administration officials, has called for FERC to take tougher action on the California matter than it has in the past.
Wood and Massey commented on the refund issue after testimony yesterday before the Senate Governmental Affairs Committee, which held hearings on FERC's response to California's energy problems and its demands for $8.9 billion in refunds to cover alleged overcharges.
On Monday, FERC imposed price ceilings on California and 10 neighboring states. Wood and Massey said they were ready to require generators and marketers to refund revenue that exceeded those price ceilings.
Depending on the time period and whether private generators and municipal utilities would be required to pay, the refunds could exceed $1 billion, some energy lawyers calculated yesterday.
That would be sharply higher than the $124.5 million in refunds that FERC has tentatively ordered for the first three months of this year. It has not made a final ruling on the issue.
California Gov. Gray Davis (D), the leadoff witness at the hearing, urged senators to pressure FERC to require the repayment. "The ordering of refunds is not a matter of discretion. It's a matter of law," Davis said. "Give back the money that was wrongfully taken from us."
Enron Corp., Reliant Energy Inc., Duke Energy Corp., Williams Cos., Dynegy Inc. and Mirant Corp. are among the companies facing allegations of overcharges. The companies say the high prices were based on high costs of natural gas used to generate power.
The significance of Monday's FERC ruling is that, for the first time, it establishes a benchmark level of "just and reasonable" electricity prices in California and western states, creating a basis for calculating refunds, energy lawyers said.
The addition of two new commissioners to the FERC panel, President Bush's appointees Wood and Nora Brownell, and a heightened sense of urgency about California's energy plight has pushed federal regulators to go considerably further than the commission had previously been willing to venture.
The question of refunds has quickly become the focal point for Democratic lawmakers, who argue that FERC's ruling this week didn't go far enough. Two party lawmakers from California, Sen. Barbara Boxer and Rep. Anna G. Eshoo, announced today that they plan to introduce legislation instructing the commission to order refunds for consumers.
Governmental Affairs Chairman Joseph I. Lieberman (D-Conn.) also suggested at the outset of the hearing he might support large refunds for Californians.
Duke Energy Employee Advocate - June 21, 2001
Bush Waffles on Price Caps
Energy Problems Spread
New York Price Problems
ABC News - June 20, 2001
The investigative arm of Congress has launched an inquiry into Vice President Dick Cheney's energy task force and its ties to energy companies, ABCNEWS has confirmed.
The General Accounting Office is investigating the Bush administration's energy task force and its ties to the energy industry, ABCNEWS has confirmed.
The GAO, the investigative arm of Congress, has launched an inquiry into the White House National Energy Policy Development Group at the request of Rep. Henry Waxman of California, the ranking Democrat on the House Government Reform Committee.
Administration sources say the White House is refusing to turn over certain documents to the GAO relating to the group's meetings with industry officials.
Vice President Dick Cheney headed up the task force, which formulated President Bush’s plan to dramatically expand the nation's ability to produce energy. The national energy policy unveiled by the administration last month calls for increasing domestic supplies of oil, gas and coal and boosting production of electric and nuclear power.
Democrats on Capitol Hill complained about the task force's closed-door meetings with energy industry representatives and portrayed the administration's proposals as a boon to special interests, noting that Bush and Cheney were both former Texas oilmen.
Waxman has also urged the Government Reform Committee's Republican chairman, Rep. Dan Burton of Indiana, to hold hearings on the task force.
The vice president's lawyer has objected to the GAO probe on the grounds that it might intrude on executive deliberations.
The news that the investigation is underway - a development first reported by Newsweek magazine - comes as Bush's chief political strategist Karl Rove has come under scrutiny for meeting with the executives of a company he had a large financial stake in.
The AP reported last week that Rove owned at least $100,000 in Intel Corp. stock when he met privately with company officials at the White House in March. Waxman has asked Rove to detail his contacts with Intel and other companies and called for congressional hearings on the matter.
Duke Energy Employee Advocate - June 20, 2001
The New York Times reported that the California power price caps will now apply at all hours and will also include ten other states.
CNN reported that on the Bush trip to California, an adviser to the House Republican leadership said: "It was a total disaster... He came out there to let every Californian, including Republicans, know he was against price caps. Now everyone in California knows Gray Davis is for them and the president is not.”
Duke Energy Employee Advocate - June 18, 2001
So far, the California energy struggle between the state and the generators has been a “he said, she said” battle of words. Each side’s version of the truth is completely different from the other's. When the case of Duke Energy Corporation, and others, goes before the grand jury, maybe the truth will come out.
One thing to make finding the truth more difficult is the fact that the energy wheeler-dealers are exempt from much record keeping. Hey, that comes in mighty handy when appearing before a jury (I don’t remember and I don’t have any records). The article: “Energy traders' profits: Good business - or fraud?”, The Charlotte Observer, revealed: “In 1993, the trading of energy products received an exemption from oversight by the Commodity Futures Trading Commission, a federal agency that oversees commodity and options trading to protect markets from fraud and manipulation. Energy is the only commodity that has received a blanket CFTC exemption."
There may just be some forensic investigators who can shed some light on the matter. The Orange County Register gave an interesting report about Williams Energy Services. State Attorney General Bill Lockyer says that Williams manipulated the market. Williams said that it did not. Who can prove anything?
The Environmental Protection Agency may come to the rescue. They have smokestack monitors to track pollution. It seems that these work great to tell when the plant was operating. A few more data sources, such as this, may provide the needed answers.
Duke Energy Employee Advocate - June 18, 2001
The Federal Energy Regulatory Commission will meet today to consider power price caps for Duke Energy, and others, according to The Charlotte Observer. The caps would re-regulate wholesale power prices in the California market.
It is about time. Deregulation has been a total failure in California. Other states have also had problems with deregulation. States that have not deregulated would do well not to.
The Charlotte Observer - By STELLA M. HOPKINS - June 14, 2001
The California attorney general will convene a grand jury next month to investigate whether power producers engaged in illegal business activities during the state's energy crisis.
Power generators, including Duke Energy, face lawsuits and investigations, but Wednesday's announcement is the first indication the state Department of Justice is considering criminal as well as civil charges.
"Through the grand jury we will further focus our criminal probe to determine whether the California market was manipulated and profits taken illegally, and whether there was fraud against the public," Attorney General Bill Lockyer said in a statement.
The attorney general and state regulators already were investigating whether power generators shut down plants to reduce supply or colluded to boost prices.
Generators have repeatedly denied taking such actions.
Duke argues it can't afford to shut down plants because 90 percent of its power is sold on long-term contracts. If the company doesn't make the power to deliver on those sales, it must buy from other producers at what are usually high, last-minute rates.
"We have done absolutely all of our business in California very legally and very ethically," said Cathy Roche, a spokeswoman at Duke's Charlotte headquarters. "We have no concern that the grand jury will find anything different from that."
Duke, the largest Carolinas utility, owns three California power plants and leases a fourth, giving it about 5 percent of the state's power-generating capacity. The company is one of at least five out-of-state generators under investigation for their role in the nation's worst energy crisis.
Duke says its average selling price in California during the first quarter was $136 per megawatt hour, which was below the average market price. But the company has acknowledged that in January it sold nearly $20 million of power at $3,880 per megawatt hour - about as much power as the average Carolinas home uses in one month. Duke has not been paid on the sale.
Duke Energy Employee Advocate - June 14, 2001
The L. A. Times has taken notice that energy companies are profiting from deregulation in more ways than one. One way executives cashed in was by exercising stock options.
“…Critics say it is the energy crisis in California and the West that has driven up corporate profits at these companies--including AES Corp. of Virginia, Duke Energy Corp. of North Carolina and Houston-based energy concerns Enron Corp. and El Paso Corp. The crisis created a bull market for publicly traded power companies--and made the shares held by the executives especially lucrative.”
“Said Loretta Lynch, president of the California Public Utilities Commission: ‘It stands to reason that if the companies are making exorbitant profits, then the individuals who run the companies are also making exorbitant profits.’ ”
“Harvey Padewer, president of Duke Energy Corp.'s Energy Services division, sold Duke stock for $12.26 million in February, netting $2.99 million.”
It does not matter if their companies go down in flames; many executives will walk away well off, no matter what. But they will likely only walk away after they have milked the last drop from their companies.
We commented on the stock option feeding frenzy on January 1 and on April 1, 2001, and the end is not in sight:
Poor Magazine - L. Washington, L. Gray-Garcia - June 12, 2001
Low income people across California are forced to pawn off their belongings just to pay for their inflated PG&E bills
I have lived through a lot… the death of my first son - teen pregnancy of my daughter - a job doing manual labor for 32 years and the endless struggle to get through every day with the severe arthritis that I have had for the last six years and yet nothing has made me feel quite as defeated as I did the other day...It all started at about 6 am when I got up for work - the sun seemed to light up my tiny kitchen more than usual - but it wasn’t a bright cheery light that made me feel like my usual hopeful self - it was just a glare... an odd glare that made every thing look dull and disordered - but perhaps it was me - a dull and disordered me who didn’t want to have to pick one of several favorite belongings to take to the pawn shop on that day - so I could get enough money to pay my PG&E bill - but that was another story -
You see, two months ago when this whole mess started with the alleged “energy crisis” I began to get a sinking feeling in my stomach because I knew something was seriously wrong - and yet almost everything I read about the “crisis” confused me more - so I stopped trying to figure it out and ended up just feeling angry - angry that the big money corporations were duping me so blatantly and that I was truly unable to do anything about it - I kept up with some of the activism launched by Global Exchange but I wasn’t much of an activist and besides, after struggling to get through each day - I barely had time to sleep - much less, be “pro-active” so on I went, angry and impotent. Then I got my bill... $346.00 - this was a 120 percent increase - this was more than I spent on food, clothing and medication- this was more than I had to my name...
I began to look around my room - I prayed, I wept… I prayed again... I had always paid my bills…mostly on time or if I couldn’t - I would hold off on that purchase or vow to stop buying anymore furniture...or - well, this was different - I could never stop being in this form of debt - and even worse - I could never see being able to pay these bills – That’s when I started to look around my little apartment for something to sell - something to hand over to the omnipresent jaws of the neighborhood loan shark, pawn shop - call it what you like - it meant one thing - I would never see one or more of my valuables ever again -
“$85.00,” he spit out the words without as much as a glance up from his papers.
“You’ve got to be kidding that’s worth at least $200.00,” I said, pointing a shaking finger at my VCR. I had chosen the CD player and the VCR, this meant no more movies from the Video store - this meant no more soft music to soothe me to sleep - and yet he didn’t look up…
“I said 85.00 – that’s all I can give you lady- take it or leave it.” He was shaking his head in unison with his words.
“OK,” I said, knowing that I would have to take the only piece of jewelry I owned back to the store. If I was lucky, it might make the rest of the bill...
San Jose Mercury News - BY JENNIFER BJORHUS - June 11, 2001
State officials investigating California's extraordinary energy prices are zeroing in on how energy traders use the technology tools of their profession -- from e-mail and specialized software to Internet energy data sites and online trading floors.
This technology may be key, they say, to helping traders acquire the intimate knowledge needed to manipulate California's troubled energy market. With minute-to-minute knowledge of market conditions, some traders went even further, two lawsuits charge, illegally coordinating bids and sending electricity prices to record-breaking levels.
The state Attorney General's Office has subpoenaed from power generators software used to formulate bidding strategies, names of employees providing computer support, communications with a prominent industry Web site and the name of firms that handle computer networks.
And a state Senate committee has hired an information technology consultant to help them look into how traders tracked patterns on the state's Internet-based spot market, among other things.
``Once you were knowledgeable about its operations, the opportunity to game it became pretty obvious,'' said Sen. Joe Dunn, D-Garden Grove, who chairs the committee.
Working together, or colluding, to fix prices is illegal and violates state and federal anti-trust laws.
Sharing sensitive industry data, if it involved financial markets, would be considered insider trading and would be treated far differently, said Anjali Sheffrin, head of market analysis for the Independent System Operator, which manages the state's power grid.
The Securities and Exchange Commission polices the nation's stock markets, but wholesale energy trading goes largely unwatched by federal regulators.
San Diego attorney Mike Aguirre agreed with Sheffrin. Aguirre is part of a team of lawyers who have filed two lawsuits against leading power generators such as Dynegy, Duke Energy and Williams Energy Services.
``It's basically an embryonic kind of trading market that involves the sharing of inside information, and the only reason they're getting away with it is there's no SEC cop,'' he said.
``All of these `What ifs?' '' said Dynegy spokesman Steve Stengel. ``The fact of the matter is we've played by the rules, we've acted ethically, we haven't done anything wrong…''
L. A. Times - By NANCY VOGEL - June 9, 2001
Cal-ISO wants U.S. action to bar alleged gouging by power plant operators. The companies deny market manipulation.
State officials intensified their assault on power plant owners in California on Friday by asking the federal government to ban four large companies from selling power at whatever prices the market will bear.
Mirant Corp., Duke Energy, Dynegy Corp. and Reliant Energy--owners of more than a dozen power plants in California--have charged excessive prices and manipulated the state's market, the California Independent System Operator in alleges formal petitions to the Federal Energy Regulatory Commission.
Given evidence of abuse, Cal-ISO argues in its filings, federal regulators cannot legally allow the companies to continue selling electricity in California at market-based rates. FERC granted that privilege to the companies three years ago, when California opened its power industry to competition. That privilege is now coming up for renewal. By refusing to renew and setting prices instead by how much it costs the companies to produce electricity, FERC could quickly control the high wholesale electricity prices that have plagued California for the last year, state officials say…
"We're gratified that market forces are clearly at work," said Tom Williams, spokesman for Duke Energy, which owns major power plants on the central coast…