FERC Deadline Looms for Energy Traders

Federal regulators could yank power-selling privileges from four major energy companies as early as today.

The companies -- Avista, El Paso Electric , Portland General Electric and the trading arm of Williams (WMB Quote) -- are due to supply regulators with additional proof they didn't manipulate Western power markets to drive up electricity prices in 2000 and 2001. Otherwise, the Federal Energy Regulatory Commission could take the unprecedented step of revoking the companies' authority to set electricity prices in wholesale markets.

Williams confirmed that FERC visited its Tulsa headquarters Wednesday to examine the company's trading records. In a conference call Monday, Williams said it extended the invitation to FERC in an effort to reassure the public that it has done nothing wrong.

"We want to be the star pupil in cooperating with FERC," said Williams Chief Executive Steve Malcolm. "Hopefully, this will be a show of our good faith -- not only to FERC but to the rest of the world -- that we have nothing to hide."

Malcolm said he doubts Williams faces any risk of losing its rate-setting authority "at this point in time."

FERC offered no details Thursday on the progress of its investigation. However, the agency did host a closed session Wednesday that triggered speculation that additional companies could be targeted with possible enforcement actions.

In the meantime, the three other companies already slapped with FERC mandates have said they're cooperating with the investigation as well.

El Paso Electric said Thursday that it was still compiling information but will meet today's filing deadline.

Documents released last week by FERC show the small Texas utility reaping millions of dollars in revenues through a questionable arrangement with Enron, the fallen energy giant whose collapse last year into bankruptcy has fueled a meltdown throughout the merchant energy sector.

Enron applauded El Paso Electric's actions, stating in a July 2000 letter, "While other utilities may be indifferent to such opportunities, lacking incentive and personal desire, this is clearly not the case with El Paso."

Avista, whose director Bobby Schmidt voluntarily resigned Tuesday for "personal" reasons, blamed its original shortfall of documentation on a speedy response to FERC. The company could not be reached Thursday for an update on its situation.

Portland General Electric, a division of Enron, promised an update but had not provided one by Thursday afternoon.