Friday, June 18, 2004 | 11:23 a.m.
While the state of Nevada has not -- as California did on Thursday -- filed a formal lawsuit against Enron Corp., there is no shortage of legal wrangling between the bankrupt energy marketer and Nevada agencies and companies.
Nevada's battle also erupted on the floor of the U.S. Senate on Thursday as Sen. Harry Reid, D-Nev., commented on remarks reported Wednesday on CBS' evening news program.
The Nevada Attorney General's Office's Bureau of Consumer Protection as well as the Public Utilities Commission months ago filed testimony on behalf of Nevada Power Co. in a series of Enron-related disputes with the Federal Energy Regulatory Commission.
Nevada Power and its Reno-based sister utility Sierra Pacific Power are trying to get FERC to reverse its decision to uphold a series of contracts the companies signed with Enron during the Western energy crisis. That ruling caused a New York bankruptcy court judge to determine that the Nevada utilities owed Enron more than $300 million for terminated contracts.
Enron terminated those deals in May 2001 when the utilities' credit rating was slashed in the fallout of the energy crisis. The judge determined that FERC had sole jurisdiction over those contracts. The utilities have been pleading with FERC since June to review its order.
Nevada Power officials are hopeful that the increasing pressure from national media and elected officials will turn the tide with FERC.
"All of this is good," said Lyle Larson, a Nevada Power attorney.
Nevada Consumer Advocate Tim Hay, who runs the Bureau of Consumer Protection, said a state lawsuit against Enron "is still an option" but he added that the Nevada position differs from that of California.
In that state, California regulators became the power provider of last resort when many utilities became insolvent in the face of soaring electricity prices. California -- and Nevada -- officials contend that those prices soared because Enron and other power marketers manipulated the market. That presumption is the basis for the California lawsuit.
Hay and utility executives also questioned whether a direct lawsuit would be effective since Enron is in bankruptcy and there will likely be few assets left once creditors are satisfied.
Nevada Power also has not filed a lawsuit directly against Enron, instead fighting the company in three separate appeals of the FERC rulings as well appealing the bankruptcy court order.
Larson said a lawsuit against Enron is not out of the question.
"In light of the recent evidence it's hard to say one way or another," he said.
Meanwhile, Reid reacted strongly to profanity-laced audio tapes of a conversation between two energy traders. One tape has an Enron trader saying, "I want to see what pain and heartache this is going to cause Nevada Power Co." and "I want to f... with Nevada for awhile."
"This is reprehensible," Reid said. "Enron employees, from their own mouths and in their own words, are maliciously planning to rob Nevadans."
Reid said the remarks and circumstances of gasoline price gouging today are similar to the manipulation of the electricity market orchestrated by Enron.
"It is unclear to me whom exactly FERC is working to protect, but it certainly isn't Nevada rate payers," Reid said.
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