Bring it on

The suit, announced last week by state Attorney General Bill Lockyer, represents the first in what we hope will be a series of legal actions that prove what we’ve suspected all along—that energy executives fattened their wallets at the expense of California consumers during the state’s energy crisis. Basically, the $160 million suit charges the companies—Dynegy, Mirant, Reliant and Williams—with “gaming the market,” double-selling electricity by accepting $49 million from the state to keep so-called reserves, then turning around and selling that power on the lucrative, hourly spot market.

We were at first surprised to see Lockyer going after the companies on civil charges only, especially after all the aggressive talk last year about criminal wrongdoing. (Remember the predictions that certain energy execs would soon be wearing orange jumpsuits?) But it looks like Lockyer has pursued a civil suit—claiming a section of the state business law was violated—in a calculated move to bring the case to the state courts instead of before federal courts or the Federal Energy Regulatory Commission, which would tend to go softer on energy companies.

It’s certainly true that $160 million is a drop in the bucket when you consider that billions were siphoned out of California during this period. But we’re willing to trust Lockyer when he tells us that more legal actions are underway in addition to this one and the related $4 billion suit he’s got going against PG&E’s parent company, who he claims diverted billions so as to drive its subsidiary into bankruptcy.

How will the collapse of energy giant Enron tie into all this? It no doubt will. Indeed, it’s likely that Enron has not yet been named in a California lawsuit related to the deregulation debacle because the company was quick with the shredder. Lockyer’s office subpoenaed records from Enron in relation to the California crisis long ago but the company has yet to produce a single document.

Federal investigators continue to seek answers from Enron too. And the admission that Vice President Dick Cheney met with Enron’s then-CEO Ken Lay six times during this period has prompted theories that the administration’s “hands off” policy toward California during the crisis was the recommendation of Lay, whose company made enormous profits during this time. Cheney so far refuses to turn over the documents that might elaborate on his discussions with Lay.

No doubt, we’ll be watching the truth about these matters being revealed for a long time to come. Meanwhile, kudos to Lockyer for taking the first step to right some of the wrongs.