Los Angeles, CA — As the Governor is expected to announce special deliberations on utility proposals shortly, Consumer Watchdog offered new information to the legislature about problems with the proposed new Western power market. The group warned that legislation to subsume California’s electricity grid into a giant regional power trading system will not only open the state to trading manipulation, but permanently hobble California when it comes to prosecuting Enron-style manipulation in the future.

“Californians recovered hundreds of millions of dollars from energy manipulators like Enron, Duke, NRG, Williams and others only because of civil lawsuits and resulting settlements filed on their behalf,” Consumer Watchdog wrote in a letter to the Chair of the Senate Judiciary Committee, Senator Hannah-Beth Jackson, where AB 813 will be heard on Tuesday next week. The bill passed out of the Senate Energy, Utilities & Communications Committee earlier this week.

“Conversations with one of the lead attorney in these cases, former City Attorney and private plaintiff lawyer Mike Aguirre, reveals that the scheme envisioned by AB 813 would prevent such lawsuits over electricity manipulation in the future.”

For the letter, see here.

“The cases depended on cooperation with the California Independent System Operator (CAISO), an ally in proving the manipulation and providing evidence. The cases were filed in state court alleging unfair competition and other unfair business practices.

“Under AB 813, CAISO would cease to exist and be replaced with a Western Regional Transmission Operator appointed by unspecified corporate interests in unspecified states. Governance would be dominated by trading industry representatives, rather than California officials vetted by the Senate and appointed by California’s Governor to serve the interests of our state. Consumers would lose a vital ally with no consumer protections in place at the new regional operator.

“…The new multi-state organization would represent the industry, not California consumers, and disputes over energy manipulation or environmental protection would be under the jurisdiction of the Federal Energy Regulatory Commission (FERC).

“FERC would be empowered to invalidate California laws once we participate in a multi-state energy trading system, rather than our current mostly-California-only system…Mr. Aguirre explains that the Western market and FERC could also preempt the very state laws that Californians sued under to recoup their losses during the energy manipulation schemed associated with deregulation at the turn of the century.

“In other words, common law causes of action and state statutes against unfair competition are as likely to be invalidated as other environmental and consumer statutes – leaving Californians at risk of not having a legal remedy under the next manipulation scheme. They would face FERC preemption.”

For more, see Consumer Watchdog’s new report, Betting Against The House: How California’s Leaders Could Gamble Away Our Energy Future On A Western Power Trading Casino: http://consumerwatchdog.org/energy/report-warns-enron-all-over-again-governor-jerry-brown-and-electricity-deregulation-era

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