Attorney General Bill Lockyer sued Enron Corp. on Thursday, alleging that the bankrupt energy trader manipulated market prices during the state’s energy crisis three years ago, at a cost of as much a $2 billion to Californians.
Filed in Alameda County Superior Court, the lawsuit seeks restitution and damages for Enron’s use from 1998 through 2001 of a “startling array of manipulative and fraudulent schemes” to boost profits at the expense of California energy users.
Lockyer played excerpts of profanity-filled recordings of Enron traders gloating over scamming California’s energy market and stealing money from “Grandma Millie” in excess of $1 million a day.
“I’m the person that is Grandma Millie’s lawyer,” Lockyer told reporters at a Santa Monica press conference announcing the lawsuit.
“California ratepayers should be entitled to well in excess of $1 billion — probably closer to $2 billion — in profits Enron took that were illegal,” Lockyer said.
The Houston-based energy company, which declared bankruptcy in 2001, is also being investigated by the U.S. Justice Department.
Three Enron traders have been charged with manipulating California prices. Two have pleaded guilty. The third awaits trial. The company has declined to comment on the tapes.
The lawsuit is Lockyer’s first against Enron. It accuses the company of intentionally causing congestion along the state’s power transmission lines, then profiting by relieving the congestion it caused.
Seven earlier lawsuits filed by Lockyer against state utilities and energy suppliers have resulted in settlements totaling $1.9 billion in ratepayer relief.
That relief could come in many forms — rebates, reductions in the price of long-term contracts signed by the state. In setting its case with the state, for example, Pacific Gas and Electric Co. agreed to reduce ratepayer financial obligation for the utility’s bankruptcy.