Resistance grows to proposed deal on Enron charges

WASHINGTON — The backlash is gaining momentum against a proposed federal settlement between Enron and the Snohomish County Public Utility District over the bankrupt energy company's disputed electricity charges.

On Monday, Snohomish County PUD officials said they will fight a proposal to seal certain Enron files, which they say would prohibit the utility from using hundreds of hours of unreleased Enron tapes and e-mails against the company in any federal litigation.

Utility officials and their allies in Congress also complained about the size of the offer to settle claims of excessive charges by Enron to the PUD, the Port of Seattle and the Grays Harbor Public Utility District.

"Washington state consumers deserve justice. They deserve relief from Enron," Democratic U.S. Sen. Maria Cantwell said Monday.

Her Republican challenger in the upcoming November election, Mike McGavick, also objected to key elements in the settlement, which was proposed last month by the Federal Energy Regulatory Commission (FERC).

"FERC is doing our region a disservice by not advocating for the interests of our ratepayers, and by possibly aiding Enron by sealing further evidence of wrongdoing," he said in a written statement.

The PUD says Enron overcharged Snohomish County PUD ratepayers about $40 million through market-manipulation schemes during the 2000-01 energy crisis. Under the settlement, Enron would pay about $2.3 million to resolve those claims.

In a separate issue, Enron is suing the PUD for $120 million in fees for canceling its long-term contracts in 2001.

The settlement recommends releasing Enron from the Cantwell Amendment, which Congress passed last year in an attempt to block Enron's creditors from collecting the cancellation fees.

"If this proposed settlement isn't Enron's wish list, then I'm not sure what is," said U.S. Rep. Rick Larsen, D-Lake Stevens.

U.S. Rep. Jay Inslee, D-Bainbridge Island, said FERC is "aiding and abetting" Enron's influential creditors on Wall Street, which include JP Morgan, Citigroup and Merrill Lynch.

In a letter to FERC, Larsen and Inslee called the cancellation fees "tantamount to theft."

The FERC trial staff, which developed the settlement, said the proposal fairly and appropriately produces "just and reasonable results" and is in the public interest.

The trial staff, in a written response to the PUD's concerns, called the complaints baseless and disingenuous. In an interview, FERC spokesman Bryan Lee also said the agency is not trying to "seal" Enron evidence files.

But a March 10 filing by the agency says that if the settlement is accepted, FERC will withdraw all pleadings, exhibits and testimony from the public file and join Enron in opposing any motion to stop that.

"If we cannot put those new tapes into evidence or make them public, then FERC has sealed the file from our use," said Snohomish PUD attorney Eric Christensen.

Alicia Mundy: 202-662-7457 or amundy@seattletimes.com