El Paso Electric Hopes To Settle Accusations

WASHINGTON -- El Paso Electric Co. said it hoped to reach an agreement to settle charges by federal regulators that it schemed with Enron Corp. to manipulate the electricity market in California during a power crisis.

Gary Hedrick, chief executive officer of El Paso Electric, told CNNfn television the Texas utility has held settlement talks with the Federal Energy Regulatory Commission.

"We have had a period of settlement negotiations which was initiated by the hearings examiner. We're still in that process," Hedrick told CNNfn. "The company remains hopeful that we can find some way to settle this process and put it behind us."

El Paso Electric is not related to El Paso Corp., the natural gas pipeline company.

In August, FERC launched a formal investigation into whether El Paso Electric and Avista Corp. were used by Enron to circumvent trading rules when California was reeling from blackouts and soaring wholesale power prices in late 2000 through mid-2001.

FERC attorneys accused El Paso Electric of giving control of some its power plants to Enron without FERC approval, and failing to notify the agency of an arrangement in which Enron sold power on its behalf.

The companies have denied any wrongdoing.

FERC lawyers face a deadline this week to detail their accusations against El Paso Electric in a filing with an administrative law judge. If no settlement is reached, the case will proceed to a formal hearing before a FERC judge in the spring, followed by an initial decision.

The case is pending before FERC in docket EL02-113.

SOURCE: Reuters