Background
This investigation represents another chapter in the unraveling history of the California energy crisis 2000-2001. On December 2, 2001, Enron Corporation announced that it and a number of its subsidiaries (collectively Enron) had filed voluntary petitions for Chapter 11 reorganization with the U.S. Bankruptcy Court for the Southern District of New York. Of most relevance to California were Enron's retail energy operations. At the time of the bankruptcy, a number of Enron-affiliated entities affected by the bankruptcy filing were doing business in California as ESPs. Enron Energy Marketing Corp. (ESP #1015), Enron Energy Services, Inc. (ESP #1083), and The New Power Company (ESP #1356) were registered with this Commission.2
The sudden financial collapse and ensuing bankruptcy of Enron Corporation and its subsidiaries caused concern. We believed that the collapse and bankruptcy might impair Enron's ability to serve its retail direct access (DA) energy customers in California. We were also concerned that the collapse and bankruptcy might have other impacts on California energy markets, including the investor-owned energy utilities, the Independent System Operator (ISO), and the California Department of Water Resources (DWR).
Our primary concern was that California retail energy customers continue to receive reliable energy service. We put parties on notice that facts in this investigation related to the assignment of the ESPs' direct access contracts to an investor-owned utility or to an alternative ESP might be incorporated into other proceedings.
The Scoping Memo of the Assigned Commissioner set forth the issues to be considered, whose salient points are summarized:
2 Enron Power Marketing's ESP registration #1086 was cancelled October 25, 2001; Enron Energy Marketing Corp. and Enron Energy Services' ESP registration was cancelled December 22, 2003. The New Power Company's ESP registration was canceled February 13, 2002.1. What effect will the financial collapse and ensuing bankruptcy of Enron and its subsidiaries have on:
a. the Enron affiliated companies' ability to serve their California retail energy customers?
b. price increases, and operational effects on other entities such as the investor-owned utilities, the ISO, and DWR?
c. the operations of the California electric and natural gas markets, and how will these impacts affect California energy customers?
2. What specific steps are the Enron affiliated ESPs and investor-owned utilities taking to ensure that the retail customers of the Enron affiliated companies will continue to receive reliable energy services?
3. What actions should the Commission take or recommend to protect California consumers in light of the bankruptcy filing?
