While government regulators turned a blind eye, electricity traders at Enron (under the leadership of current U.S. Army Secretary Thomas White) drove up prices during the California power crisis using manipulations that may have contributed to severe power shortages in the state, according to internal Enron documents released today by federal regulators. In one strategy described in the memos, Enron would buy power from a state-run exchange and resell it outside California for almost five times as much. "Thus, traders could buy power at $250 [per megawatt-hour] and sell it for $1,200," according to one memo. "This strategy appears not to present any problems," the memo stated, "other than a public relations risk arising from the fact that such exports may have contributed to California's declaration of a Stage 2 Emergency yesterday."
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