Enron proposals became part of energy plan

02/01/2002

By JIM LANDERS / The Dallas Morning News

WASHINGTON – The Bush administration's national energy plan included two Enron-endorsed provisions that upset some congressional Republicans and Western governors for infringing on state's rights.

The provisions were included in an eight-point memo from former Enron Corp. chairman Kenneth Lay to Vice President Dick Cheney.

The memo, sent in April, urged federal condemnation powers for interstate electric power lines. It also criticized legislation sponsored by Sen. Frank Murkowski, R-Alaska, regarding industry-written utility operating standards, saying it was "ineffective." Enron sought a federal mandate instead.

Both of the Enron-endorsed measures were included in the energy plan Mr. Cheney submitted to President Bush on May 16.

Rep. Henry Waxman, D-Calif., has said Enron wielded extensive influence on the vice president's national energy policy task force. He has demanded that Mr. Cheney release records of those meetings. And the congressional General Accounting Office announced Wednesday that it would file a lawsuit to force the administration to disclose a roster of those who met with the energy policy task force.

The White House has refused. Mr. Cheney's office issued a statement saying the vice president met for 30 minutes with Mr. Lay on April 17 and that other task force officials met on five occasions with Enron lobbyists.

Enron spokeswoman Karen Denne confirmed the contents of Mr. Lay's memo and said the company made it public last year.

Jennifer Millerwise, a spokeswoman for Mr. Cheney, said the vice president's national energy plan disagreed with most of Mr. Lay's suggestions.

"The decisions and recommendations in the national energy plan are based on what's the best energy policy for America," she said. "There was nothing that was put in this report to benefit a specific company or interest group."

Mr. Waxman's analysis was different. "Not withstanding statements from the vice president's staff, a careful analysis shows that seven of eight points mentioned in the memo are included in the White House energy proposal," he said. "It is clear Enron had a very strong influence on the White House energy plan."

Mr. Cheney's energy policy report and Mr. Lay's memo suggest the administration agreed with some – but not all – of Enron's suggestions.

Both opposed price controls during California's electricity crisis last year. Both agreed the nation needs to develop more natural gas resources. Most Republicans and some Democrats also agree with these suggestions.

Some trade association executives say, however, that Enron's influence seems apparent where Enron and the administration agreed to override state prerogatives.

"It wasn't that Enron was trying to hide the ball. Everybody had a pretty good idea where they were going," said Charles Gray, executive director of the National Association of Regulatory Utility Commissioners. "Enron wanted large power markets with as little state regulation as possible. And the administration's proposals did not seem averse to that view, although they were more sympathetic to the states than Enron was."

The coincidence of views between Enron and the administration was even stronger in an Oct. 9 statement of principles for electricity legislation sent from the Energy Department to congressional Republicans.

That list of principles included another of Mr. Lay's eight points – demand auctions where electricity consumers could sell back to utilities unused blocks of power often called "negawatts."

A bill authorizing regional electricity demand auctions was considered last year by the House Energy and Air Quality Subcommittee chaired by Rep. Joe Barton, R-Ennis, as part of a package of emergency relief measures for California. The bill died in committee when Republicans and Democrats could not agree on whether to impose price caps.

Mr. Cheney's energy policy report made no mention of the idea, but it was included in the Energy Department's recommendations.

Enron's hopes for a deregulated, nationwide electric power system have been pressed on Washington policy-makers for many years. Jeffrey Skilling, Enron's president and chief executive officer until his resignation in August, met with Mr. Barton in Washington to discuss deregulation legislation in 2000.

Mr. Barton said he and Mr. Skilling disagreed sharply over Enron's endorsement of a federal deregulation plan imposed on the states. Mr. Barton said he would not draft legislation that did not preserve the right of the states to decide on deregulation for themselves.

"I said he could go run his company as he saw fit and I would run my subcommittee as I saw fit, and that was the end of the meeting," Mr. Barton said.

Western governors have opposed Enron's efforts to give the Federal Energy Regulatory Commission authority over the siting of electric power lines and access to those lines by utilities and independent power generators. They disagreed with the White House when the administration endorsed some of those steps.

Wyoming Gov. Jim Geringer, a Republican, met with Mr. Cheney on Wednesday to once again express the Western Governors Association's opposition to federal control over electric power line sites.

-- (Cheney catered @ to. corrupt corporation), February 03, 2002