The Commodity Futures Trading Commission (CFTC) has subpoenaed more than two years of energy trading records from embattled Dynegy Inc., Reliant Resources and Enron affiliate Portland General Electric as part of its parallel investigation into sham natural gas and power round-trip, or “wash,” trading transactions. Spokane, WA-based Avista Corp. had disclosed earlier that it was the target of a CFTC subpoena as well (see NGI, June 24).

The CFTC, which regulates the commodities and futures markets, is seeking all trading documents from January 2000 to the present, said Portland General spokesman Kregg Arnston. “We’ve already done pretty much of that work with the FERC inquiries” about round-trip trades, he noted. Still, Arnston said the Portland, OR-based utility had requested and received a two-week extension to turn over the documents to the commission. Much of the information was due at the CFTC last week.

“We understand that we’re being scrutinized because of our connection with Enron, so we are cooperating fully,” Arnston said. As it did with FERC, Portland General said it planned to tell the CFTC that it did not participate in any bogus round-trip trades that were intended to artificially boost its trading volumes and revenue.

FERC threatened in May to pull Portland General’s license to sell energy at unregulated rates because it distrusted the utility’s response to another aspect of the agency’s probe — energy suppliers’ use of questionable Enron-style practices. Portland General had said it engaged in only a limited number of so-called “ricochet” transactions to take advantage of the price spread between capped energy prices in California and uncapped prices in out-of-state markets, but FERC argued that the company’s trading transcripts revealed these were a “standard and routine practice.” FERC questioned the credibility of Avista’s reply as well.

Likewise, Dynegy confirmed that it received a subpoena from the CFTC, but it declined to go into details. “We’re reviewing it, and we will respond appropriately,” said company spokesman Steve Stengel.

Dynegy, which is struggling with credit rating agencies and has seen a sharp drop in its stock price, already is being investigated by FERC and the Securities and Exchange Commission (SEC) for its round-trip trading activities. At FERC, Dynegy has denied participating in any gas or power round-trip trades in western and Texas markets (the scope of the agency’s probe), but the SEC is investigating Dynegy’s “Project Alpha,” a complex gas transaction, and possibly some power deals that were transacted outside the western markets.

Reliant Resources, which admitted in May that more than 10% of its energy trading revenues over the past three years have come from round-trip trades, had its records subpoenaed by the CFTC in late June. The company, which also is under formal investigation by the SEC, reported that it was involved in nearly 140 million MWh of bogus power trades between 1999 and 2001, and 45 Bcf of gas “wash” trades in 2001.

“We believe it’s part of an industrywide inquiry” by the CFTC, said Reliant spokesman Richard Wheatley.

Williams dismissed reports that it also had gotten a subpoena from the CFTC. But “it wouldn’t be a surprise if we received one,” said Williams spokeswoman Paula Hall-Collins. “Certainly, we would cooperate.”

In its response to FERC’s probe, Avista also had denied any involvement in the bogus round-trip trades. “Avista’s business practices are legal and ethical,” said Chairman Gary G. Ely, adding that the utility was complying with the CFTC subpoena.

A spokesman for the CFTC’s enforcement section declined to comment on the subpoenas. Only when an administrative complaint is filed against a company does a case become public, he said. He noted that the CFTC was working closely with the FERC in investigating the round-trip trading activities of energy companies.

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