Why Enron tried to create a fake power crisis in California during 2000?

Question

During year 2000 Eron was forcing blackouts and telling their subsidiaries to dismantle some of their facilities to create an electical outage in California.Many poeple belived it was Jim Davis fault. It all happend to paved the way to Sept 11? Why was California victim of such attacks? Enron officials were directly involved on those practices. And now Why is still California the state with the higher gas prices when it produces 630,000 barrels of oil per day. 12% of oil production in USA.?

Enron-gate
Where are the investigations of Bush’s liaison with the bankrupt company?


The fact that Ken Lay, Enron'schairman, has been Bush's chief money man and key backer since he first wentinto politics is mentioned only in passing. The media don't want to beimpolite. They have been credulously swallowing Enron's p.r. and overlooking the obvious for years.

The main problem with Enron is that it has never produced muchof anything in the way of either goods or services; it has not added asingle widget to the world widget supply. Enron was in the business of"financializing," making markets, trading in wholesale electricity, water,data storage, fiber-op

Answer 1

According to the documentary "The Smarted Guys In The Room", Enron took advantage of California's electricity deregulation laws to help make an electricity shortage worse (it intentionally ordered the power plants it owned to falsely report breakdowns and stop producing power) in order to jack up the price of electricity and thereby jack up its profits. The floor traders at Enron were laughing about how much they were able to charge this way.

Answer 2

Answering backwards here...

California has the highest gas prices for at least two reasons. One is that we have one of the highest gas taxes in the nation. An additional problem is that California has special rules saying how gasoline must be made. So unlike most of the nation, California gas has to be made special. And it's more expensive, both because of special refining, and also because there is less gas produced.

The electricity problem is what happens when government tries to control the economy. The state government tried to artificially lower the price of electricity. When they did that, companies basically said "No, you can't make me work for less money, so I'm not going to produce more than a certain amount of power." So there were shortages [blackouts]. This happens all the time - it's why there are lines at all the stores in communist countries.

Yes it was in part Grey Davis' fault, and the fault of the legislature, who tried to get something (cheap electricity) for nothing. Their idea to control the power market actually created an unstable market, which was further taken advantage of by Enron. They were able to game the system, and make billions on the backs of California residents. Amazingly, after making so much easy money, they still went bankrupt, so the money is just gone.

How to solve it? The word is deregulation. If electric companies could raise prices a bit during the summer, they wouldn't maintain their power plants when demand was highest - they would stay open and make money! And other companies would follow along, trying to undercut each other to get the most customers (who want the lowest price).

Vote Libertarian - it's better than either Republican or Democratic on this issue.

Answer 3

Enron did it to make outrageous profits.

As to why California got in that mess, blame the environmentalists. We weren't able to build any new power plants for years prior, we couldn't drill for more oil off of the coast, we couldn't open any new refineries while we had to have special gasoline formulations.

At least we are building new power plants now.

Answer 4

It began with California deregulating electricity.

Here's a thorough explanation:
http://members.verizon.net/deleyd/bush/enronca2.htm