Lieberman Investigation Leads to Over $50 million for California Ratepayers

WASHINGTON – Governmental Affairs Committee Ranking Member Joe Lieberman, D-Conn., Wednesday said the Federal Energy Regulatory Commission’s settlement of its investigation into Enron’s California wind farms was “long overdue good news for California consumers.”

As a result of FERC’s ruling, ratepayers in California will recoup an estimated $52 million to $58 million dollars.

FERC opened its investigation into Enron’s wind farms last fall on the eve of a Senate Governmental Affairs Committee hearing into FERC’s failure to adequately regulate Enron. The hearing, called by Lieberman, who was committee chairman at the time, and a related committee staff investigation documented that Enron overcharged California ratepayers by exploiting weaknesses in FERC’s own regulatory process governing the wind farms.

Under federal law, the wind farms were potentially eligible for special rate treatment – meaning consumers could be charged a higher price for the electricity they generated – but only if the wind farms were not owned by a public utility or any owner of a public utility – which Enron was. Enron filed documents with FERC asserting, first, that it had sold 50 % of its interests in the wind farms, and later that it qualified for an exemption from the law. Although both assertions turned out to be untrue, FERC never scrutinized Enron’s filings to see if the claims were supported. Instead FERC let Enron continue to charge the higher, preferential rates.

“I’m pleased that, at least in this chapter of the Enron debacle, ratepayers in California are going to receive over $50 million of their money back,” said Lieberman. “It should not have taken a Senate Committee investigation to force FERC to do its job and address this problem, but I’m glad that it did.”