Last summer's California energy crisis was a gold mine for Enron Corp., which acted as a sort of energy middleman, buying power from wholesalers and then selling it to customers for more money. Now, CBS News Correspondent Sharyl Attkisson reports, federal officials are asking if Enron not only profited from the energy crisis, but also helped perpetuate it.
"It's a good thing that the federal regulatory commission has finally decided to take a serious look at whether Enron and others manipulated the prices and supplies," said Sen. Barbara Boxer, D-Calif.
While Enron has denied manipulating prices and supplies, former CEO Jeff Skilling embraced the runaway prices in a conference call with analysts back in October 2000.
"I hate to say that prices are rising. I know that's hurting consumers. But it certainly has been beneficial for Enron," Skilling said. "There is no question that the uncertainty and the volatility that we're seeing in power and gas markets around North America, and increasingly around the world, has been beneficial for Enron."
As the lights went out on the West Coast, Enron's "wholesale services" revenues – money made trading in energy – quadrupled from $12 billion to $48 billion, and doubled again three months later.
But if the California crisis helped make Enron rich, it also helped break the company. It caused federal regulators to step in last June and impose strict around-the-clock price controls on the Western market.
"That immediately ended their ability to be profitable," said Tyson Slocum, energy analyst with Public Citizen. "And you can draw a straight timeline from June 19th to today and you can see the demise of Enron take place over that time period."
The federal investigation isn't limited to just Enron. It will also look at other companies that cornered California's energy market and try to find out if they got together with Enron to manipulate the market.
© MMII, CBS Worldwide Inc. All Rights Reserved
"It's a good thing that the federal regulatory commission has finally decided to take a serious look at whether Enron and others manipulated the prices and supplies," said Sen. Barbara Boxer, D-Calif.
While Enron has denied manipulating prices and supplies, former CEO Jeff Skilling embraced the runaway prices in a conference call with analysts back in October 2000.
"I hate to say that prices are rising. I know that's hurting consumers. But it certainly has been beneficial for Enron," Skilling said. "There is no question that the uncertainty and the volatility that we're seeing in power and gas markets around North America, and increasingly around the world, has been beneficial for Enron."
As the lights went out on the West Coast, Enron's "wholesale services" revenues – money made trading in energy – quadrupled from $12 billion to $48 billion, and doubled again three months later.
But if the California crisis helped make Enron rich, it also helped break the company. It caused federal regulators to step in last June and impose strict around-the-clock price controls on the Western market.
"That immediately ended their ability to be profitable," said Tyson Slocum, energy analyst with Public Citizen. "And you can draw a straight timeline from June 19th to today and you can see the demise of Enron take place over that time period."
The federal investigation isn't limited to just Enron. It will also look at other companies that cornered California's energy market and try to find out if they got together with Enron to manipulate the market.
© MMII, CBS Worldwide Inc. All Rights Reserved
