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Inslee listens to a constituent.

Montage of Wing Point in Bainbridge Island and the Edmonds Ferry.

Jay Inslee: Washington's 1st Congressional District

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Legislative Issues

Enron Fraud

Snohomish owes Enron nothing

29 June 2006

In a decision that will save Snohomish County ratepayers more than $120 million, the Federal Energy Regulatory Commission (FERC) ruled late last night that Snohomish County Public Utility District (SnoPUD) does not have to pay Enron for ending its energy contract early.

The ruling came just one month after the House of Representatives made a clear stand against Enron collecting more from American consumers. It approved an amendment offered by U.S. Rep. Jay Inslee (D-Wash.) that would prohibit the federal government from using taxpayer funds for the purpose of collecting the so-called termination fees.

“This is long overdue,” said Inslee, who represents south Snohomish County. “Enron demanding millions more is like Bonnie and Clyde asking for a refund from banks they just robbed.”

Between January 1, 2000, and June 20, 2001, Enron illegally manipulated the electricity market to inflate rates, costing businesses and families on the West Coast over $1 billion. SnoPUD was overcharged an estimated $40 million.

During this period of market manipulation, SnoPUD entered into a long-tem energy contract with the now bankrupt energy company. Until now, Enron has maintained SnoPUD owed $116 million in penalties plus interest for ending the contract early, even though it was entered under fraudulent circumstances and electricity promised never was delivered.

Yesterday, FERC ruled that Enron’s contract with SnoPUD was unenforceable. Their press release stated, “The Commission denied Enron’s termination claim upon a finding that Enron’s financial fraud induced Snohomish to enter into the contract.”

Since 2001, Inslee has been leading the fight in the House against Enron’s market manipulation and advocating ratepayer relief. In addition to his Enron amendment, he recently wrote a letter to FERC, calling on the federal agency to reject a proposed $2.3 million settlement with four power providers in western Washington that were overcharged when Enron manipulated the market.