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Wednesday, Jul 24, 2024

Editorial Lockyer’s anger at Enron is justified

California state Attorney General Bill Lockyer drew heat late last month when he suggested to reporters he would like to personally escort Enron Corp. CEO Kenneth Lay into a prison cell containing an amorous male inmate named Spike.

Perhaps that kind of comment is best made off the record, but Lockyer’s determination to tackle price-gouging energy producers and traders can only be admired in light of recent revelations about Mr. Lay’s back-room activities aimed at continuing the energy crisis in this state and elsewhere.

Kenneth Lay’s Texas-based Enron has made a fortune off of California’s misfortune with energy deregulation, reporting first-quarter revenues of $50.1 billion , almost 281 percent more than the same period last year.

Enron doesn’t produce much electricity; instead, it is involved in energy arbitrage, the act of buying energy at one price and immediately selling it at a higher price. In other words, Enron is in the business of jacking up prices.

Lay is also a powerful behind-the-scenes player in Washington and Sacramento. He was a major contributor to fellow Texan George W. Bush’s presidential campaign and is said to have virtually authored the president’s recently released energy policy.

He was also a big promoter of energy deregulation in the nation, and actively lobbied in support of California’s deregulation plan , the same one that brought us outrageously high electricity prices and Enron outrageously large profits.

These days, Lay is again lobbying California politicians to protect the deregulation plan that has been so beneficial to his company. According to the San Francisco Chronicle, Lay has been shopping around his own plan for correcting California’s energy woes in secret meetings with potential GOP gubernatorial candidates as well as Michael Milken, the high-flying junk-bond king convicted of securities fraud in 1990.

According to the Chronicle, Lay’s solution is simple: Make the ratepayers pay off California’s multibillion-dollar utilities debt, drop all state investigations into price gouging by energy companies (including Enron), and let the over-priced energy market simply keep on keeping on.

Apparently, Lay’s only concern is to let the good times roll on for his company.

A recent New York Times interview with Federal Energy Regulatory Commission Chairman Curtis H & #233;bert, however, reveals what may be a more insidious side to the Enron executive’s political influence.

H & #233;bert recalled for the Times a phone conversation he had with Lay earlier this year, within days of being appointed chairman of the nation’s top energy regulatory agency by President Bush. In that conversation, reportedly witnessed by one of H & #233;bert’s aides, Lay allegedly offered to support H & #233;bert’s chairmanship if he changed his


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