Senator Feinstein Asks Energy Committee Chairman for
Hearing Into Enron's Role in the California Energy Crisis
January 28, 2002

Washington, DC - U.S. Senator Dianne Feinstein (D-Calif.) today asked Senator Jeff Bingaman (D-NM), Chairman of the Senate Energy Committee, to hold a hearing into Enron's role in the California energy crisis.

In a letter to Senator Bingaman, Feinstein wrote: "I appreciate your continued willingness to explore problems with energy markets and specifically Tuesday's hearing to look at what Enron can teach us about the need for additional regulations."

"I am writing to request an additional hearing to pursue what role Enron had in the California energy crisis with respect to market manipulation and price gouging. Enron's ability to deal in complex unregulated financial derivatives in the natural gas market while controlling a tremendous share of the gas trading market, provided Enron the ability to manipulate market prices. This was very likely a key factor in driving up gas and electricity prices leading to the California energy crisis."

At tomorrow's hearing, Senator Feinstein plans to address the connection between Enron's staunch opposition to any sort of price caps during the California energy crisis and the economic windfall it accrued from volatile electricity and natural gas prices.

Senator Feinstein has long been concerned about the ability of energy companies to use their market power to increase their profits:

  • In the midst of the California Energy Crisis, Senator Feinstein introduced legislation to impose a temporary regional wholesale price cap or cost-of-service based rates on energy prices in the western region. Enron strongly opposed this legislation.

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  • Furthermore, Senator Feinstein later introduced legislation to give the Federal Energy Regulatory Commission to have additional oversight authority over on-line trading firms such as Enron that deal in natural gas and electricity.

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