By WENDY STUECK
Thursday, May 9, 2002 Print Edition, Page A1
VANCOUVER -- The Enron scandal enmeshed several Canadian companies yesterday, including an arm of British Columbia's provincially owned power utility.
The companies have been asked by U.S. regulators to "admit or deny" using trading strategies to manipulate the power market during California's energy crisis.
The U.S. Federal Energy and Regulatory Commission ordered yesterday that companies selling energy or related services to California in 2000 and/or 2001 supply information and documents related to their trading strategies.
The Wall Street Journal also reports today that Enron Corp. teamed up with at least two other power sellers -- including B.C. Hydro's Powerex subsidiary -- to reap outsized profit by submitting false information to California's electric-grid manager in 2000. The story quotes internal Enron memos.
The disclosures could broaden a new front of inquiry into the practices of Enron, the once-mighty Houston energy company already collapsed under the weight of its aggressive accounting practices. The company now is facing calls for criminal inquiries over evidence that first surfaced Monday -- when the memos were released by the FERC -- that it used false claims of energy demand and supply to manipulate the huge California energy market for its financial gain.
The FERC order requires about 150 sellers, including Powerex, to report by May 22 whether they used trading techniques such as ones revealed in Enron memos as ways to create shortages and boost prices.
Canadian energy companies TransAlta, Enmax and TransCanada Pipelines, all based in Calgary, are also subject to the order.
BC Hydro spokeswoman Elisha Odowichuk said the company would supply any information the FERC requested.
"We'll comply and provide them all the data they are looking for," she said.
The FERC's order also applies to big U.S. energy sellers including Duke Energy Corp., Williams Cos. and Mirant Corp. The internal Enron memos refer to company strategies designed to create artificial energy shortages in California and drive up prices for power sellers.
The memos, which include nicknames such as "Death Star" and "Fat Boy" for market-manipulation strategies, led to demands from California politicians for a criminal investigation into alleged abuses by Enron and other energy companies.
Powerex sold millions of dollars worth of electricity to California during 2000 and 2001 when the state was short of supply and wholesale prices soared.
The company has been named in several cases of alleged market abuses by energy sellers at the height of the crisis in California, including a $1-billion (U.S.) lawsuit filed last month by California Attorney-General Bill Lockyer against four energy companies.
Powerex is fighting all those allegations, and maintains it acted within market regulations at all times.