Jun 6, 2002 By Leslie Miller Associated Press Writer 3 min read

WASHINGTON (AP) – The stock prices of several power companies were hammered on Wednesday as investors reacted to news that federal regulators had threatened to revoke their privileges to sell electricity in wholesale markets. The Federal Energy Regulatory Commission issued the warning to Avista Corp., El Paso Electric Co., Portland General Electric Co. and Williams Energy Marketing & Trading Co., saying they haven’t cooperated with an investigation into possible manipulation of the Western power markets.

FERC accused Avista, El Paso Electric and Portland General of lying about their involvement with Enron Corp. in schemes to drive up electricity prices in 2000 and 2001. Williams Energy Marketing & Trading simply refused to answer questions, FERC said.

The utilities “are not fully cooperating with the investigation, thus hindering the commission’s ability to determine whether the Western markets have been manipulated, and, as a result, whether rates charged may have been unjust and unreasonable,” FERC wrote in its order on Tuesday.

The commission gave the companies 10 days to answer its questions or they will strip them of their ability to sell wholesale, or unregulated, power. Stock prices for all companies named fell on Wednesday.

“This is a signal that we’re not going to treat this casually,” commissioner Nora Brownell told The New York Times.

Brownell said she expected the companies to ultimately cooperate, and FERC would not strip them of their authority to sell power in the wholesale market – something it has never even threatened to do before.

The order would be retroactive to Feb. 13, the day the investigation began into allegations that Enron and other energy traders manipulated power markets in California and other parts of the West, driving up prices sharply in 2000 and early 2001.

FERC said it is investigating more than 150 other energy companies and may issue similar orders to them.

Portland General’s spokesman Kregg Arntson told the Houston Chronicle the company was “surprised and perplexed” by the regulators’ order.

El Paso Electric said it thought the order resulted from “a procedural misunderstanding” that it would correct.

Williams said it would amend its response to the commission to deny that it engaged in the manipulation FERC had questioned the company about.

An Avista spokesman said the company is reviewing the relevant materials and will respond soon.

The regulators’ threatened action is only the latest blow to the energy trading industry, which has seen the collapse of Enron and allegations of accounting irregularities along with the accusations of market manipulation.

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On the Net:

FERC’s order:

http://www.ferc.gov/electric/bulkpower/pa02-2/pa02-2.htm#showcause