The Federal Energy Regulatory Commission reacted to the avalanche of evidence on Enron?s alleged manipulation of the California energy market by ordering staff to review recently submitted materials June 17. While FERC reviewed e-mails and transcripts last year, new information has been flooding the media as a result of the Snohomish County Public Utility District?s lawsuit against Enron for canceling a 2001 contract. The recent information ?indicates that this corrosive attitude seeped down from the corporate offices to the employees at the front line,? stated FERC chair Pat Wood. The same day that FERC made its move, California attorney general Bill Lockyer filed suit against Enron in Alameda Superior Court to potentially recover $2 billion. Lockyer intends for the case to be heard in state court to avoid trying to squeeze funds out of the insolvent company through bankruptcy court. ?I am Grandma Millie?s lawyer,? Lockyer declared during a press conference after playing new audiotapes of traders discussing the withholding of energy to drive up prices. Some of the tapes feature Enron personnel crowing about the company sticking it to grandmothers around the state. Both of California?s senators formally requested on June 16 that Wood act on the state?s request for $8.9 billion in refunds. Senator Barbara Boxer called on President Bush to require regulators to return the profits. Boxer told the president that during a meeting with Wood, he was ?defensive about his agency?s lack of redress? and was unmoved to change his views. She added that FERC ?failed miserably? to protect the state from unjust rates. Senator Dianne Feinstein wrote directly to Wood, imploring him to refund profits and ?punish the traders and the energy companies that manipulated the western energy markets, or ask me and other members of Congress to provide you with the additional authority you need to carry these actions out.? Earlier in the week, various California entities asked for a rehearing of FERC?s order that the Department of Water Resources pay Enron $23 million. The state, in its June 14 filing, is also fighting requirements for payments totaling about $270 million to Reliant, Williams, Dynegy, Mirant, and Duke for DWR?s activities during the energy crisis. FERC on May 12 ordered the state to pay refunds to suppliers because it bought energy under the auspices of DWR instead of the California Independent System Operator. ?We have been cooperating, and continue to cooperate with FERC investigations,? said Enron spokesperson Karen Denne. She said the company has not yet seen the attorney general?s lawsuit and couldn?t comment on that litigation. In other FERC news, several parts of the California Independent System Operator (CAISO) MD02 process were dealt with. Included in the commission?s June 17 order (<i>ER02-1656-017<\/i>) was approval of a flexible offer obligation on behalf of sellers to replace FERC?s ?must offer? obligation; a simplified hour-head market with real-time load that is not scheduled in the day-ahead market receiving real-time prices; and conditional approval for residual unit capacity self-provision. The commission rejected CAISO?s proposed $250\/MWh bid cap for residual unit capacity. The commission issued its four-year strategic plan, in which it reiterated its support of competitive markets and promised to provide ?vigilant and effective oversight? of those markets. Also in the strategic plan, FERC stated that it will attempt to expedite development of infrastructure, such as liquefied natural gas terminals. It also plans to ?fairly? address environmental concerns by ?incorporating reasonable environmental conditions into permits.? In FERC?s summer assessment, it expects ?fairly high? electricity prices through next year. Gas prices ?could be more volatile this summer than last,? noted the assessment. Tight electricity supplies are expected for California. To address the near-term concern, FERC is putting a priority on monitoring California?s markets.