Federal Regulators Bar Enron from Selling Energy
Ron Scherer writer of The Christian Science Monitor, The Christian Science Monitor
The Federal government says it's pulling the plug on Enron - the company that became notorious for cooking its books and manipulating the price of electricity in California.
In a first-ever move, the Federal Energy Regulatory Commission (FERC) barred the company from selling electricity and natural gas in the US. FERC chairman Pat Wood says it is the first time FERC has ever imposed a "death penalty" on companies it regulates.
Enron became a household word for millions of Americans after revelations about its inflated profits, accounting tricks, and corporate greed. Its stock, once a high flier, became worthless.
Thousands of employees in Houston lost their jobs, and the company was forced to take its name off the Houston Astros stadium. The company's demise also resulted in the failure of Arthur Andersen, the giant accounting firm, which had audited Enron's books.
It's not clear what impact the FERC order will have on Enron. The company is in bankruptcy and is reorganizing its businesses. Through its Portland General subsidiary, the company will continue to provide electricity to 1.4 million people in Oregon. This includes hydroelectric and thermal plants.
"It is more of a signal to the rest of the market that FERC does have authority to discipline this kind of conduct, and it's pretty powerful authority," says Craig Pirrong, director of energy markets at the University of Houston's Global Energy Management Institute. "Although it may not have that big an impact on Enron, which has markedly diminished its presence in the marketplace, others still do have a strong presence. …