Wash. programs to benefit from Enron settlement

Nick Rees Dec. 1, 2009, 4:13pm


SEATTLE (Legal Newsline) - Utility customers who were gouged by Enron's manufactured energy crisis in 2000 and 2001 will see payback this week as Washington Attorney General Rob McKenna has sent over $9 million to programs to benefit those customers in his state.

Reportedly, Enron made close to $2 billion in profits from its electricity trading operations in the Western states during 2000 and 2001. Investigations into manipulation of the energy market by Enron traders revealed schemes with such names as "Death Star," "Fat Boy," and "Ricochet," meant to scam others.

"How fitting that Enron will pay to provide warmth to low-income families and to help Washington residents make their homes more energy-efficient," McKenna said. "These programs are especially needed in today's economy and will benefit those least able to bear the burden of higher power bills."

As a result of those schemes, the states of Washington, California and Oregon and some California utilities and other organizations settled with Enron in the summer of 2005 for $1.52 billion.

"Although our settlement with Enron called for significant consumer restitution, we expected to receive only pennies on the dollar due to the company's bankruptcy," McKenna said. "In the end, we were able to recover nearly half of the $22.5 million we were owed under the settlement. That's more than anyone expected."

Of the amount recovered by the State of Washington, nearly $6 million in checks were sent to utilities rather than distribute small refunds to individuals. The money will aid in reducing heating expenses for low-income households and will support weatherization program that improve heating efficiency. Allocation of the checks were made based on the number of customers served by each utility.

Businesses will benefit from the settlement as well as individuals, with more than $1.6 million being sent to fund a Battelle program that teaches commercial building owners how to make their structures more energy efficient and more than $1.2 million sent to the Washington State University Extension Program to help conduct energy audits and teach businesses how to become more energy-efficient.

Battelle and WSU were both chosen by a committee comprised of stakeholders and legislators to receive the grants.

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