Investigation

The market oversight division of the Public Utilities Commission of Texas(PUCTT) has launched an investigation into bid activity in the Electric Reliability Council of Texas (ERCOT) markets late last month to determine whether any market participant exacerbated significant power price spikes seen at that time.

Standard & Poor’s Ratings Services lowered El Paso Corp.’s credit ratings to ‘B+’ from ‘BB’ on Friday, ending a long and difficult week, that included a 42% collapse in El Paso’s stock price to $4.92/share on Friday from Monday’s open. Investors dumped the company’s stock after it announced that it would cut its dividend 82% to 16 cents annually, sell off another $2.9 billion in assets and exit the rapidly growing liquefied natural gas (LNG) business.

As part of its continuing investigation into the manipulation of western energy markets, the Federal Energy Regulatory Commission last week sent out data requests to the top natural gas marketers based on their 2001 physical sales volumes, seeking information related to gas prices submitted to energy trade newsletters that publish gas price indexes.

FERC late Thursday said it is launching an investigation as a result of allegations that former Enron Chief Financial Officer Andrew Fastow and Enron executive Michael Kopper created partnerships to mask the former energy trading giant’s stake in three wind power farms.

FERC late Thursday said that it is launching an investigation as a result of allegations that former Enron CFO Andrew Fastow and Enron executive Michael Kopper created partnerships to mask the former energy trading giant’s stake in three wind power farms.

With an initial investigation of several special purpose entities (SPEs) used by Enron Corp. completed, the court-appointed examiner now will carefully scrutinize “a number of significant questions” about the complex off-balance-sheet transactions, including what role they played in the company’s collapse, whether they were illegally used to manipulate financial statements, and if the SPEs were illegal, whether the officers, directors or professionals involved may be liable.

With an initial investigation of several special purpose entities (SPEs) used by Enron Corp. completed, the court-appointed examiner now will carefully scrutinize “a number of significant questions” about the complex off-balance-sheet transactions, including what role they played in the company’s collapse, whether they were illegally used to manipulate financial statements, and if the SPEs were illegal, whether the officers, directors or professionals involved may be liable.

Peoples Energy CEO Thomas M. Patrick said a review by the Illinois Commerce Commission (ICC) of the utility’s purchasing practices last year “will show that the company conducted its business prudently and that none of our practices increased costs to customers.” He added that the case is on a typical procedural schedule that would bring it to conclusion early in 2003.

Responding to news accounts of a motion to compel that the Illinois Commerce Commission (ICC) staff recently filed as part of an annual review of gas purchasing practices for fiscal year 2001, Peoples Energy CEO Thomas M. Patrick said that the review involving the utility Peoples Gas “will show that the company conducted its business prudently and that none of our practices increased costs to customers.” He added that the case is on a typical procedural schedule that would bring it to conclusion early in 2003.