The author of this piece
has been wrong before, but I suspect he's on to something here:
Cheney Suppressed Evidence in California Energy Crisis
By Jason Leopold
t r u t h o u t | Investigative Report
Thursday 19 July 2007
In-depth investigation shows how Vice President Dick Cheney pressured federal energy regulators to conceal evidence of widespread market manipulation by energy companies during the California electricity crisis in 2001.
In March 2001, while California's two largest utilities were teetering on the brink of bankruptcy, and the state's electricity crisis was spiraling out of control, Vice President Dick Cheney summoned Curt Hebert, the chairman of the Federal Energy Regulatory Commission (FERC), to his office next to the White House for a hastily arranged meeting.
Cheney had just been informed by his longtime friend Thomas Cruikshank, the man who handpicked the vice president to succeed him at Halliburton in the mid-1990s, that federal energy regulators were close to completing an investigation into allegations that Tulsa, Oklahoma-based Williams Companies and AES Corporation of Arlington, Virginia had created an artificial power shortage in California in April and May of 2000 by shutting down a power plant for more than two weeks.
Cruikshank was a member of Williams's board of directors, and perhaps more importantly, had been one of many energy industry insiders advising Cheney's energy task force on a wide-range of policy issues, including deregulation of the nation's electricity sector, that would benefit Williams financially.
Cruikshank informed the vice president he had learned about the preliminary findings of FERC's investigation during a Williams board meeting earlier in March 2001. FERC, Cruikshank told Cheney, was in possession of incriminating audio tapes in which a Williams official and an AES power plant operator discussed keeping a Southern California power plant offline so Williams could continue to receive the $750 per megawatt hour premium for emergency power California's grid operator was forced to procure to keep the lights on in Southern California.
AES was the operator of two power plants in Los Alamitos and Williams marketed the electricity. The power plants were designated by the California Independent System Operator (ISO), the agency that manages the state's power grid, as crucial in order to ensure a reliable flow of electricity in the Southern part of the state. To stave off the potential for blackouts, the ISO was given the authority to pay top dollar for power if the power plants operated by AES, as well as power plants operated by other companies, were not in operation.
California's electricity crisis wreaked havoc on consumers in the state between 2000 and 2001. The crisis resulted in widespread rolling blackouts and forced the state's largest utility, Pacific Gas & Electric, into bankruptcy. California was the first state in the nation to deregulate its power market in an effort to provide consumers with cheaper electricity and the opportunity to choose their own power provider. The results have since proved disastrous. The experiment has cost the state more than $30 billion.
According to a copy of the March 2001 Williams transcript, Rhonda Morgan, a Williams official, told an AES power plant operator "it wouldn't hurt Williams's feelings" if the power plant that was down for repairs was kept offline for an extended period of time so the company could continue to be paid the "premium" for its emergency energy supplies from the ISO. In a separate conversation with Eric Pendergraft, a senior AES official, Morgan said, "I don't wanna do something underhanded, but if there's work you can continue to do ..."
Pendergraft responded to Morgan, saying, "I understand. You don't have to talk anymore."
The collusion between Williams and AES allowed Williams to earn an extra $10 million over a period of 15 days and set in motion a series of events that resulted in the California power crisis between 2000 and 2001, a crisis that was based almost entirely on manipulative practices by energy companies.
This story is based on a two-month investigation into Cheney's energy task force; how the vice president pressured cabinet officials to conceal clear-cut evidence of market manipulation during California's energy crisis, and how that subsequently led Cheney to exert executive privilege when lawmakers called on him to turn over documents related to his meetings with energy industry officials who helped draft the National Energy Policy and also gamed California's power market. Truthout spoke with more than a dozen former officials from the Energy Department and FERC as well as current and former energy industry executives all of whom were involved in personal discussions with Cheney relating to the National Energy Policy.