FERC last week ordered bankrupt Enron Corp. to pay penalties of $1,000 per day for failing to turn over evidence to a public utility in Washington State as part of an agency proceeding exploring the company’s exploitation of West Coast energy markets in 2000-2001.
“We find that the ALJ [administrative law judge] may impose daily monetary sanctions upon Enron for willfully failing to comply with, in fact, ignoring, our discovery rules,” the Federal Energy Regulatory Commission order said [EL03-180]. “As Enron’s conduct at issue in these consolidated proceedings has involved manipulative and obfuscatory conduct, the Commission agrees…that monetary sanctions are the most appropriate remedy available.”
The FERC judge had given Enron Power Marketing Inc. and Enron Energy Services Inc. until Nov. 10 to provide the Public Utility District No. 1 of Snohomish County, WA, with the requested documents and materials. The deadline “passed, however, and Enron provided nothing to Snohomish, nor did Enron seek from the ALJ either an extension of time…or any other relief,” the order noted.
On Nov. 18, the ALJ issued an order holding Enron in default for failure to comply with FERC discovery rules. The judge recommended that the Commission order Enron to pay a penalty of $500 per day for each day of non-compliance between the deadline date of Nov. 10 and the Nov. 18 default order, and $1,000 per day for each day of non-compliance thereafter. The ALJ proposed that the penalties be paid to Snohomish to compensate it for the trouble it encountered in trying to obtain the documents from Enron.
FERC approved the penalty amounts, but it decided that the penalties should be deposited in a dedicated fund that has been set up to help customers harmed by Enron’s practices, rather than go to Snohomish. “We find that those same customers have also suffered harm from Enron’s failure to abide by the Commission’s discovery rules,” it noted.
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