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Tapes: Enron plotted to shut down power plant

Move came day that rolling blackouts hit California, utility says

• CNN/Money: Scandal Inc.
• Interactive: The Enron scandal
Enron Corporation
Federal Energy Regulatory Commission

(CNN) -- A Washington state utility released audiotapes Thursday that it said revealed bankrupt energy trader Enron Corp. plotted to take a power plant off-line in 2001 to jack up electric prices in Western states.

That same day, shortages of power forced rolling blackouts in northern California that affected about 2 million customers.

Snohomish Public Utility District in Everett, Washington, released the tapes as part of its effort to void a $122 million lawsuit Enron has filed against it seeking payment for electricity it was contracted to provide.

The utility says an Enron employee and a worker at a power plant in Las Vegas, Nevada, made up phony repairs, taking the plant off-line January 17, 2001.

"We want you guys to get a little creative ... and come up with a reason to go down," the Enron worker tells the plant employee on one of the tapes.

"Anything you want to do over there? ... Cleaning, anything like that?" the Enron employee says.

"Yeah, yeah," the other replies. "There's some stuff we could be doing."

Eric Christensen, the utility's assistant general counsel, said the tapes show Enron was planning to manipulate Western power markets as early as 1998 -- before California's deregulated energy market opened.

Others imply that Enron used similar tactics in Canada and that traders were aware the actions were illegal.

One Enron employee tells a colleague in another recorded conversation, "I'm just trying to be an honest camper so I only go to jail once."

"Well, there you go. At least in only one country," the other replies, and laughs.

"Yeah, [expletive], this isn't a joke," the first employee says.

Earlier tapes obtained during the Enron-Snohomish lawsuit indicated Enron had manipulated the Western power grid for a year and a half.

Those tapes include traders gloating profanely about overcharging "Grandma Millie" in California.

The utility has asked federal regulators to throw out the $122 million contract with Enron to provide electricity -- a contract it says was inflated by Enron's manipulation of Western energy prices in 2000 and 2001.

Christensen said the tapes could force the Federal Energy Regulatory Commission to "aggressively deal with Enron."

"I think the evidence is now so overwhelming that they're going to be forced to act," Christensen said.

Enron, headquartered in Houston, Texas, collapsed in December 2001 and filed for bankruptcy protection after revelations that its chief financial officer was running partnerships that allowed the company to keep $500 million in debt off its books.

Twenty-three of Enron's executives -- including former CEOs Jeff Skilling and Ken Lay -- have been brought up on federal charges related to its collapse. Lay and Skilling have pleaded not guilty. (Lay plea) (Skilling plea)

Enron spokeswoman Jennifer Lowney said company officials "are continuing to cooperate with ongoing investigations."

Democratic Sen. Maria Cantwell of Washington accused FERC of dragging its feet in reviewing the case, even though its staff, she said, has found "documentation of criminal activity."

"That means a little utility in the state of Washington has actually had to become the private investigator, the policeman on the beat, their own counsel and attorney before the FERC -- and at their own expense do the job that federal investigators and regulators should do," Cantwell said.

FERC spokesman Bryan Lee said the commission has recommended that Enron be forced to disgorge more than $1.6 billion in profits it was found to have earned improperly.

He said the commission is acting as quickly as it can in the course of proceedings.

"It's understandable that the folks out West would like to hang Enron from the nearest tree -- that's, after all, Western justice," Lee said.

But, he said, the commission has to engage in due process. "That's what the courts demand."

And he said FERC officials "spent considerable sums" to convert the tapes released over the past few months into an audible format.

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