The full story of the Federal Energy Regulatory Commission’s wide-ranging response to the 2000-2001 Western energy crisis is a detailed and complex narrative, and one that is still unfolding today. In a series of orders in the late 1990s, the Commission approved California’s consensus market design, which had been negotiated by state officials and industry stakeholders and adopted into law by the California Legislature. This first-in-the-nation electricity market restructuring program had broad political support.
California’s market worked well and delivered value to customers until May 2000 after a serious drought diminished the region’s supplies of typically abundant and inexpensive hydropower. The underlying imbalance between supply and demand, along with inadequate infrastructure and flawed market rules, triggered the crisis in the California markets. The Commission staff’s March 2003 final investigation report on the Western energy crisis concluded that these conditions made possible the market manipulation that prolonged and exacerbated the economic harm caused by the crisis.
The Federal Energy Regulatory Commission has been a critical player in disclosing
the role Enron and other energy providers played in exploiting and exacerbating
the energy crisis in California and other Western states in 2000 and 2001. The
Commission collected and analyzed more than 5 terabytes of data, issued subpoenas
and show cause orders, and held hearings over the course of many months. To date,
the result of this unprecedented and comprehensive investigation has been $4.3
billion in monetary settlements stemming from the crisis, and findings by the
Commission contributed to numerous criminal prosecutions by the Department of
Justice and $300 million in civil penalties imposed by the Commodity Futures
Trading Commission.
Significant proceedings are still under way before the Commission. A final Commission order directing refunds for power sales in the California market during 2000 and 2001 is still pending. And in the Enron market-gaming proceeding, FERC administrative litigation staff has recommended that Enron be required to forfeit more than $1.6 billion, the company’s entire profits earned in the Western states from 1997 through 2003.
The legacy of the 2000-2001 Western energy crisis is threaded throughout the Commission's subsequent policy decisions and rules affecting market conduct and price transparency. And since 2002, the Commission's Office of Enforcement, formerly the Office of Market Oversight and Investigations, has provided a real-time window into the workings of electricity and natural gas markets. This information provides the Commission with the analysis and tools to respond to market problems.
California’s high-profile market meltdown helped overshadow other, more successful, market restructurings elsewhere in the country that have saved customers billions of dollars while enhancing power-grid reliability. Today, centralized power markets with independent power grid operators are in place not only in California, but in Texas and throughout the Northeast and Midwest, serving areas representing two-thirds of our nation’s $10 trillion economy.
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2000
Summer 2000
Sharp rise in Western energy prices, frequent system emergencies, severe financial distress to California
utilities and customers
July 26, 2000
Commission directs staff to undertake a fact-finding investigation of the conditions in electric bulk power markets (including volatile price fluctuations) in various regions of the country and report its findings to the Commission by November 1, 2000 News Release 
August 2, 2000
San Diego Gas & Electric files a complaint seeking price controls Complaint Filing [TIF]
August 23, 2000
Commission initiates a formal investigation of the electric rates and structure of the CAISO, PX and market-based sellers in the California wholesale market, in coordination with a nationwide fact-finding probe of electric wholesale markets, and a refund date is set. This ‘converts’ the earlier staff investigation into a public proceeding with opportunity for comment and refund protection Order
November 1, 2000
A Staff Report on Western Markets issues and the Commission orders that bids above $150 cannot set the market-clearing price in California. The period for which refunds can be made is broadened
- Order ;
- Part I of the Staff Report to the Federal Energy Regulatory Commission
on Western Markets and the Causes of the Summer 2000 Price
- Part II of the Staff Report to the Federal Energy Regulatory Commission
on the Bulk Power Markets In the United States
November 9, 2000
Commission holds a technical conference with all California and Western Parties, including the California PUC as well as then Governor Gray Davis Transcript [eLibrary]
December 8, 2000
Commission temporarily waives its rules regarding the operating and efficiency standards for jurisdictional (QF) generators to increase power supply in California Order 
December 15, 2000
Commission eliminates the mandatory PX buy-sell requirement, sets a benchmark price for wholesale bilateral contracts, orders market monitoring, adds a penalty charge for underscheduling of power, orders the establishment of independent, non-stakeholder Governing Boards for the PX and the ISO, and orders generation interconnection procedures Order
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2001
February 14, 2001
Commission addresses CAISO’s creditworthiness tariff revisions. Order
March 9, 2001
- Commission staff issues a proposal for monitoring and mitigating prices prospectively in California’s wholesale sport power
markets. Staff Proposal [TIF]
- The Commission also issues the first refund order directing sellers to provide refunds of excess amounts charged for certain electric energy sales during the month of January 2001. Order
March 14, 2001
Commission issues an order seeking to increase energy supplies and reduce energy demand in California and the West. Order
March 28, 2001
Commission orders hearing on anti-competitive issues relating to El Paso Natural Gas. Order [TIF]
April 6, 2001
April 26, 2001
Commission orders prospective mitigation and monitoring plan for California wholesale electric markets and establishes investigation into wholesale western energy markets. Order
April 30, 2001
June 19, 2001
Commission issues orders calming market volatility by requiring generators to run and capping prices. Order’s price-control limits on wholesale electricity prices in California ISO and PX markets are never triggered. Order [TIF]
July 25, 2001
Commission orders separate hearing on energy prices in California and the Pacific Northwest. News Release
December 2001
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2002
February 13, 2002
Commission institutes a staff-level investigation into Enron and the Western Energy Crisis in Docket No. PA02-2-000. Order
August 13, 2002
- Commission issues Initial Report on Investigation of Potential Manipulation of Electric and Natural Gas Prices in Western Markets, PA02-2 :
- At the same time, Commission issues three Enron-related Enforcement orders, involving Enron’s activities with:
December 13, 2002
California with the assistance of FERC ALJ reaches settlement with Williams to
restructure energy contracts (estimated $1.4 billion savings).
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2003
January 31, 2003
Commission approves $13.8 million settlement with Reliant for 2 days of physical withholding.
March 26, 2003
Commission issues Final Report on Price Manipulation in Western Markets, moves to strip Enron of its market-based rate authority and alters natural gas pricing methodology for calculating refunds in a move expected to increase anticipated final refund amount.
March 26, 2003
Commission Expects Jump In California Energy Refunds
March 26, 2003
Commission issues Show Cause Orders that Address Manipulation
March 26, 2003
June 25, 2003
Commission issues Show Cause Orders on Gaming and Partnerships, against 67
entities, and orders OMOI to conduct anomalous bidding investigation of all
market participants, including Enron, that had bid into the California electricity
market at prices above $250.
June 25, 2003
Commission revokes Enron’s market-based rate authority
June 25–26, 2003
Commission Upholds Western Power Contracts, Connecticut Contract
June 26, 2003
In order to prevent market abuse and provide clear "rules of the road"
for all market participants, the Commission proposed
rules to curb improper market manipulation while tightening communication and reporting
requirements for electric power and natural gas markets.
July 15, 2003
A FERC Administrative Law Judge issues an Initial Decision finding that Enron
must disgorge $32.5 million in profits earned in violation of its market-based
rate authority Initial Decision
July 18, 2003
July 23, 2003
October 2, 2003
Commission approves settlement with Reliant for up to $50 million in disgorgement of profits in the anomalous bidding investigation
November 14, 2003
November 17, 2003
Commission finalizes anti-manipulation rules Order
.
December 18, 2003
December 19, 2003
Commission approves $2.5 million settlement with Duke Energy in the anomalous
bidding investigation
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2004
January 22, 2004
Commission approves gaming and partnership settlements with:
January 26, 2004
The FERC Chief Administrative Law Judge consolidates for hearing the remaining Gaming and Partnership cases with outstanding Enron issues (EL03-180). Order
February 2004
Snohomish obtains recordings of Enron trader conversations with the help of Commission trial staff.
March 4, 2004
Commission approves gaming and partnership settlements with:
March 8, 2004
Commission approves gaming and partnership settlements with:
March 26, 2004
April 19, 2004
May 6, 2004
July 2, 2004
July 22, 2004
- Commission orders Enron to forfeit at least $32.5 million in unjust profits because
it violated its market-based rate authority;
- Commission set for expedited hearing
a complaint by Nevada Power Company and Sierra Pacific Company against Enron
Power Marketing, Inc relating to a contract termination payment of $300 million;
- Commission directed the ALJ to determine how much more of Enron’s profits
earned between January 1997 and June 2003 Enron should be required to forfeit
since it was not in compliance with its market-based rate authority.
August 2, 2004
Commission approves gaming and partnership settlements with:
August 5, 2004
September 21, 2004
September 22, 2004
October 25, 2004
October 27, 2004
December 3, 2004
The Chief Judge suspends the hearing in Docket No. EL04-1-000 at the request of Nevada Power Company and Sierra Pacific Power Company, after bankruptcy judge enjoins the Nevada utilities from participating in the Enron contract dispute proceeding. Order
December 7, 2004
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2005
January 31, 2005
FERC trial staff testifies in Enron Gaming case that Enron’s profits in Western states from 1997 through 2003 was more than $1.6 billion, and recommends that Enron be required to surrender the full amount.
March 11, 2005
The Commission clarifies that the disputed terminated contracts between Enron
and various utilities (executed during the period January 16, 1997 to June 25,
2003) are within the scope of this proceeding, and shall be addressed in the
ongoing hearing in Docket No. EL03-180, et al., subject to any applicable bankruptcy
restrictions. Order
on Clarification
April 13, 2005
November 15, 2005
Enron: The Commission approved a settlement for (a) $47 million in cash; (b) $875 million in an allowed unsecured claim; and (c) $600 million
civil penalty in favor of the Attorneys General for California, Washington, and Oregon
December 2, 2005
Public Service Company of Colorado: The Commission approved a settlement for $7.3 million
December 22, 2005
Reliant: The Commission approved a settlement on December 22, 2005, valued at $512 million. Reliant must also submit monthly reports for a year that staff reviews.
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2006
June 28, 2006
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May 22, 2006
Idaho Power Company and IDACORP Energy: The Commission approved a settlement for $24,250,000
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January 25, 2006
Agreement accepted between Enron and Nevada companies settling matters stemming from Western Energy Crisis
News Release | Decision
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2007
November 19, 2007
FERC denies rehearing of framework for evidence in California refund methodology
(EL00-95-136)
Decision
October 18, 2007
FERC vacates California refund orders relating to non-public entities (EL00-95-164) Fact Sheet | Decision
July 6, 2007
June 21, 2007
June 21, 2007
March 17, 2007
FERC approves Settlement and Settlement and Release of Claims Agreement filed on March 12, 2007 by Portland General Electric Company (PGE) and the California Parties. The Settlement consists of a "Joint Explanatory Statement" and a "Settlement and Release of Claims Agreement. The Settlement resolves matters and claims in the Refund Proceedings related to PGE and arising from events and transactions in the Western Energy Markets during the period January 1, 2000 through June 20, 2001 Decision
March 1, 2007
Commission approves multiparty APX settlement resolving matters related to western energy crisis News Release | Decision
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2008
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June 30, 2008
June 4, 2008
May 23, 2008
April 2, 2008
March 20 , 2008
January 8, 2008
January 4, 2008
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Updated: January 7, 2008
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