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Enron redux: Shell bilked California in energy crisis, judge finds
Key Excerpts from Article on Website of San Francisco Chronicle (San Francisco's leading newspaper)
Posted: April 24th, 2016
http://www.sfgate.com/business/article/Enron-redux-Shell-bil...
A Federal Energy Regulatory Commission judge has found that a division of Shell Oil engaged in fraud and market manipulation during Californias energy crisis, with company traders joking on tape about burning the evidence if they were ever caught. The tentative decision ... holds Shell and Spanish energy company Iberdrola liable for $1.1 billion in ill-gotten profits, money that could be refunded to Californians if the decision stands. It could end the last legal case over the expensive, long-term power purchase contracts that California signed under duress during the 2000-01 crisis. The state has already settled with all other companies accused of unjustly profiting from the long-term contracts, settlements worth a total of $7.7 billion. Officials are still pushing complaints against 13 companies involved in short-term contracts during the crisis, but have settled with others for a total of roughly $4 billion. The initial decision ... details Shell traders using schemes similar to those employed by Enron to drive up day-to-day power prices, which then increased the price California had to pay on its long-term contracts. As a result, Californians ended up overpaying Shell by $779 million and Iberdrola by $371 million. One scheme the judge cited, called Ricochet by Enron and more commonly known as megawatt laundering, involved buying electricity within California to ship to a destination outside of the state while simultaneously selling the same power back into the states market at a higher price.
Note: Read the text of tape recordings of Enron traders laughing at the misery they caused in California. For more along these lines, see concise summaries of deeply revealing corporate corruption news articles from reliable major media sources.
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