News Release - MSA Concludes Enron "Project Stanley" Review (March)

NEWS RELEASE

February 11, 2005

For Immediate Release

MSA CONCLUDES ENRON “PROJECT STANLEY” REVIEW

The Alberta Market Surveillance Administrator (“MSA”) has issued this News Release to report upon its review of information pertaining to recent media reports concerning the activities of ENRON Corp.  The MSA has confirmed that the reports are referencing matters already addressed in 1999 by the MSA and by the federal Competition Bureau.  Based upon the information reviewed, the MSA has concluded that there is no reason for its previous investigation to be reopened.  The MSA also noted that certain media coverage contained material factual errors.  These conclusions are described below and in a related Backgrounder document.

See attached.

On February 5th, 2005 certain Alberta media began publishing articles and commentary in relation to an allegation that ENRON Corp. had reaped large profits through manipulation of the Alberta power pool in 1999.   The profits were apparently related to a scheme known as “Project Stanley”.  The media coverage was based upon allegations made in a U.S. lawsuit between Snohomish County Public Utility District (“Snohomish”), a Washington State utility, and ENRON Corp. 

The MSA reviewed information provided by Snohomish, to assess whether the allegations pertain to new matters or to matters already known to the MSA; specifically, a 1999 investigation relating to ENRON Canada Corp. and Powerex Corp. (“Powerex”).  The MSA assessed the effect of any new information on its previous conclusions.  The MSA also assessed the steps previously taken in Alberta to address the activities at issue.  Finally, the MSA has also been in contact with the Competition Bureau.

The activities described as “Project Stanley” were, in fact, previously addressed by the MSA and the Alberta power pool.  As a result of those specific events, design improvements were identified and implemented.  The changes put in place in 1999 and 2000 to protect the Alberta market have functioned as intended, and the conduct at issue has not repeated.  The allegations in the U.S. lawsuit do not point to any aspect of the activities which was not well understood by the MSA at that time.  Accordingly, the MSA will not be reopening its 1999 investigation.  The MSA will continue its communications with the Competition Bureau, in the normal course.

Alberta's Market Surveillance Administrator is in place to monitor Alberta's electricity market for fairness and balance in the public interest, and keeps a close watch on the overall performance of Alberta's electricity market - checking that it operates fairly, efficiently and in an openly competitive manner. 

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A copy of this News Release and the Backgrounder are available on the MSA website at: http://www.albertamsa.ca/

For further information, please contact:
Martin J. Merritt
Market Surveillance Administrator
Tel:               (403) 233-4682         (403) 233-4682; Email: martin.merritt@albertamsa.ca