Editing Enron (section)

==California's deregulation and subsequent energy crisis==
{{See also|California electricity crisis}}
In October 2000, [[Daniel Scotto]], the most renowned utility analyst on Wall Street, suspended his ratings on all energy companies conducting business in California because of the possibility that the companies would not receive full and adequate compensation for the deferred energy accounts used as the basis for the California Deregulation Plan enacted during the late 1990s.<ref>{{cite book|url=https://books.google.com/books?id=dQugpO2TGVwC&pg=PA208|title=Financial Statement Analysis: A Practitioner's Guide|first1=Martin S.|last1=Fridson|first2=Fernando|last2=Alvarez|edition=4th|publisher=John Wiley & Sons|year=2011|isbn=9781118064207|access-date=July 20, 2017}}</ref> Five months later, [[Pacific Gas & Electric]] (PG&E) was forced into bankruptcy. Republican Senator [[Phil Gramm]], husband of Enron Board member [[Wendy Gramm]] and also the second-largest recipient of [[Political campaign|campaign]] contributions from Enron,<ref>{{cite web|url=http://www.citizen.org/congress/article_redirect.cfm?ID=6693%2F|title=Public Citizen Access to Justice, Financial Reform and Government Accountability|website=Citizen.org|date=December 3, 2010|access-date=July 12, 2013|archive-date=March 4, 2016|archive-url=https://web.archive.org/web/20160304000751/http://www.citizen.org/congress/article_redirect.cfm?ID=6693/|url-status=dead}}</ref> succeeded in legislating California's energy commodity trading deregulation. Despite warnings from prominent consumer groups which stated that this law would give energy traders too much influence over energy commodity prices, the legislation was passed in December 2000.

As the periodical [[Public Citizen]] reported:<blockquote>Because of Enron<nowiki>'s new, unregulated power auction, the company's "Wholesale Services''</nowiki> revenues quadrupled – from $12&nbsp;billion in the first quarter of 2000 to $48.4&nbsp;billion in the first quarter of 2001.<ref>{{cite web|url=http://www.citizen.org/documents/Blind_Faith.PDF|title=Blind Faith: How Deregulation and Enron's Influence Over Government Looted Billions from Americans|website=Citizen.org}}</ref></blockquote>After the passage of the deregulation law, California had a total of 38 Stage 3 [[rolling blackout]]s declared, until federal regulators intervened in June 2001.<ref>{{cite web|url=http://www.eia.gov/electricity/policies/legislation/california/subsequentevents.html|title=Subsequent Events California's Energy Crisis|website=EIA.gov|publisher=US Energy Information Administration|access-date=September 6, 2017}}</ref> These blackouts occurred as a result of a poorly designed market system that was manipulated by traders and marketers, as well as from poor state management and regulatory oversight. Subsequently, Enron traders were revealed as intentionally encouraging the removal of power from the market during California's energy crisis by encouraging suppliers to shut down plants to perform unnecessary maintenance, as documented in recordings made at the time.<ref>{{cite news|url=http://www.cnn.com/2005/US/02/03/enron.tapes/|title=Tapes: Enron plotted to shut down power plant|website=CNN.com|date=February 3, 2005}}</ref><ref>{{cite news|url=https://www.nytimes.com/2005/02/04/national/04energy.html|title=Tapes Show Enron Arranged Plant Shutdown|last=Egan|first=Timothy|date=February 4, 2005|work=The New York Times|access-date=June 26, 2009}}</ref> These acts contributed to the need for rolling blackouts, which adversely affected many businesses dependent upon a reliable supply of electricity, and inconvenienced a large number of retail customers. This scattered supply increased the price, and Enron traders were thus able to sell power at premium prices, sometimes up to a factor of 20 times its normal peak value.

The callousness of the traders' attitude toward ratepayers was documented in an evidence tape of a conversation regarding the matter, and sarcastically referencing the confusion of retiree voters in Florida's [[Miami-Dade County]] in the November 2000, presidential election.<ref>{{Cite web |last=Rosenfield |first=Harvey |date=2010-07-04 |title=Grandma Millie, Widows and Orphans |url=https://www.huffpost.com/entry/fking-grandmothers-widows_b_563398 |access-date=2024-07-29 |website=[[HuffPost]] |language=en}}</ref><ref name="Millie">{{Cite web |last=Connelly |first=Richard |date=2009-03-02 |title=Enron's "Grandma Millie" In High School Classrooms, F-Bombs And All {{!}} Houston Press |url=https://www.houstonpress.com/news/enrons-grandma-millie-in-high-school-classrooms-f-bombs-and-all-6730608 |url-status=dead |archive-url=https://web.archive.org/web/20210216202038/https://www.houstonpress.com/news/enrons-grandma-millie-in-high-school-classrooms-f-bombs-and-all-6730608 |archive-date=2021-02-16 |access-date=2021-03-13 |website=[[Houston Press]]}}</ref>
<blockquote>"They're fucking taking all the money back from you guys? All the money you guys stole from those poor grandmothers in California?"
"Yeah, Grandma Millie man. But she's the one who couldn't figure out how to fucking vote on the [[butterfly ballot]]." (Laughing from both sides.)
"Yeah, now she wants her fucking money back for all the power you've charged right up, jammed right up her ass for fucking $250 a megawatt-hour."</blockquote>

The traders had been discussing the efforts of the [[Snohomish PUD]] in Northwestern Washington state to recover the massive overcharges that Enron had engineered. [[Morgan Stanley]], which had taken Enron's place in the lawsuit, fought the release of the documents that the PUD had sought to make its case, but were being withheld by the [[Federal Energy Regulatory Commission]].<ref name=Millie/>