The Federal Energy Regulatory Commission (FERC) on Tuesday accepted a deal with Enron Corp worth $1.5 billion to settle allegations that the fallen energy giant manipulated electricity supplies during the 2000-01 Western power crisis.
But Enron, which emerged from bankruptcy last year as a private entity, will likely be able to pay only pennies on the dollar. The Houston-based company's remaining assets are only a fraction of the amount owed to creditors.
The settlement allows the states of California, Oregon and Washington to pursue $875 million in unsecured claims in Enron's bankruptcy proceeding, and entitles them to $600 million in civil penalties, FERC said in a statement.
The dispute centered on claims that Enron - using trading schemes it dubbed "Death Star," "Fat Boy" and "Get Shorty" - manipulated markets during the Western states' power crisis in 2000 and 2001, when California suffered rolling blackouts and bankruptcy of its biggest utility.
The settling parties also include PG&E Corp utility unit Pacific Gas and Electric Co, Edison International's Southern California Edison Co, the California Department of Water Resources, and the California Electricity Oversight Board, FERC said.
They will also receive about $47.4 million of receivables and cash collateral owed to Enron, FERC said.
"The parties are to be congratulated for reaching this comprehensive settlement with Enron, which I view as a product of the commission's strong enforcement posture," FERC Chairman Joseph Kelliher said in a statement.
FERC has been involved with nearly $6 billion in settlements related to the 2000-2001 crisis, Kelliher said.
The state of California and other parties claimed the energy companies withheld power illegally to drive up prices.
In conversations that were recorded during the power crisis and released last year, Enron traders bragged about manipulating the California market and inflicting pain on "Grandma Millie."