Updated from 3:44 p.m. EST

Federal regulators are painting dozens of energy companies with the dirty Enron brush.

In several long-awaited decisions issued Wednesday, the

Federal Energy Regulatory Commission

declared that 37 energy companies and municipal utilities should turn over ill-gotten profits reaped from questionable trades with Enron during the Western energy crisis of 2000-01. Those companies -- including

Calpine

(CPN)

,

Dynegy

(DYN)

,

Reliant Resources

(RRI)

and

Williams

(WMB) - Get Report

-- must now prove they did not manipulate the Western power market or forfeit unspecified gains.

In the meantime, FERC hiked some previously ordered refunds by 83%. The agency now expects several wholesale energy suppliers to pitch in with $3.3 billion worth of refunds to California. FERC originally suggested $1.8 billion in refunds -- far less than the $8.9 billion California was seeking -- but tacked $1.5 billion onto that total Wednesday after weighing damaging evidence against the power companies.

Grime and Punishment

While critical of all participants in the alleged power manipulation scheme, FERC took a particularly damaging shot at Reliant. During opening remarks at Wednesday's long-awaited hearing, the agency singled out Reliant and three other power marketers for the strongest punishment. FERC Chairman Pat Wood said the agency plans to revoke the wholesale trading rights of Reliant, two Enron subsidiaries and a unit of London-based BP PLC because of inappropriate trading activity during the power crisis.

FERC specifically accused Reliant of engaging in trades that drove up natural gas prices in the Southern California market.

"Reliant often bought and sold many times its needs in quick bursts, which significantly increased the price of gas in that market," FERC said in a lengthy report issued Wednesday.

In a brief rebuttal, Reliant tried to downplay the ruling as less than final. But the company, presumed guilty of manipulative practices by FERC, must now scramble to prove its innocence over the next three weeks if it hopes to trade wholesale electricity in the future. The unexpected blow comes just days before Reliant was set to finalize a multibillion-dollar financing package that's been delayed once already.

The company's stock took a massive hit, plunging 43% to $2.29, on news of FERC's harsh stand.

"People felt that the banks would roll over the loans if there wasn't any regulatory or legal risk," said one utility fund analyst who asked to remain unnamed. "The hit

to the stock is simply reflecting the increased liquidity risk. And I think that's appropriate."

Jon Cartwright, a senior bond analyst at Raymond James, said Reliant appears to be feeling the worst of the FERC's wrath.

"There are other companies mentioned" in the ruling, Cartwright said. "But Reliant's name is all over this."

Hub and Spoke

FERC cited incriminating telephone transcripts between Reliant and the BP unit in reaching its conclusions on wrongdoing. The agency said the two companies "engaged in coordinated efforts to manipulate energy prices" at a busy hub in California. But FERC has yet to specify just how much Reliant and other individual companies must pay.

"Clearly, FERC is drawing the conclusion that some of these companies

engaged in wrongdoing -- and Reliant is at the top of the list of companies being chastised," Cartwright said.

At least one troubled energy merchant took control of its own fate instead of risking a day in court. Last week,

El Paso

( EP) hammered out a $1.7 billion settlement with the state of California that eliminated the company's prominent spot on today's FERC agenda. The company followed up with yet another settlement today, agreeing to a $20 million penalty that ends a price-reporting dispute with the Commodity Futures Trading Commission.

Cartwright said El Paso was wise to ink the deals in advance, particularly the big one stemming from charges that the company had withheld critical natural gas supplies during the California energy crisis.

"That was a massive positive for El Paso," he said. "They're not out of the woods, but they're probably not a bankruptcy candidate anymore."

El Paso has been racing to shore up its finances and clear away longstanding problems ahead of a shareholder meeting that could see the company's entire board of directors replaced. The company's stock slipped 2.8% to $5.81 during FERC's afternoon session.

But some other energy merchants fared much worse.

Mirant

( MIR) tumbled 11% to $1.61.

Aquila

( ILA) fell 9.5% to $2. Williams dropped 7.8% to $4.37. And Dynegy slid 7.5% to $2.33.