FERC to Widen Probe of Enron’s Ownership of Wind-Power Plants

Federal regulators agreed Wednesday to expand their investigation of allegations that Enron Corp. improperly masked its ownership of California wind-power plants to get special regulatory breaks and collect higher rates.

The action by the Federal Energy Regulatory Commission came at the request of Southern California Edison Co. The commission, which agreed in October to examine the eligibility of three Enron wind-power partnerships, said Wednesday that it will extend the review to cover two other partnerships. The five partnerships together operate a dozen or more of the so-called wind farms in California.

“Serious allegations have been made that certain Enron-affiliated wind facilities have not satisfied the ownership criteria” to qualify the partnership for special status under federal regulations, FERC’s draft decision said.

That special “qualifying facility” status was created to encourage alternate energy-producing technologies; it is bestowed upon entities not controlled by utility generators.

Using their qualifying facility designation, the Enron partnerships were able to charge other companies above-market rates for their power. In a petition filed with FERC in late October, SoCal Edison claims it was overcharged by $150 million. It has asked the regulators to order that money refunded, with interest.

The ownership of the California wind-power partnerships came into question in the wake of the federal investigation of Enron’s manipulation of the California energy market. Investigators found a variety of partnerships that were secretly owned by Enron, including the wind entities now being reviewed by FERC.

Enron was required to divest its ownership in those wind-power facilities as part of its 1997 purchase of the Portland General utility. But in its October order, FERC said Enron instead masked its ownership using the secret partnerships.

Enron spokeswoman Karen Denne declined to comment on FERC’s decision, but said the company “has been and continues to cooperate with all investigations.” In regulatory filings, the Enron owners “deny that the ownership structure of the facilities is or has been inconsistent” with the commission’s rules, according to FERC’s draft decision.