"Burn, baby, burn!"
Enron traders celebrated forest fires that shut down transmission lines. They joked about "Grandma Millie" and how they "stole from those poor grandmothers in California." This wasn't an isolated incident - it was the business model.
California crisis cost to consumers
FERC's largest-ever proposed penalty (2024)
Gas price spike during Winter Storm Uri
This manipulation isn't just about numbers on spreadsheets - it's about elderly people dying during engineered blackouts, families choosing between food and electricity bills, and hospitals running on backup generators while traders celebrate.
Manipulation schemes with video game names.
"Death Star"
Created phantom congestion on power grids to collect payments for relieving problems that didn't exist.
"Fat Boy"
Artificially inflated demand by scheduling power to subsidiaries that didn't need it, creating fake shortages that drove prices up 800%.
"Ricochet"
Bought California electricity at capped prices of $250/MWh, exported it out-of-state, then sold it back at $1,200/MWh.
"Get Shorty"
Sold backup power services that companies never intended to provide.
Timothy Belden received a $5 million bonus in 2001 for masterminding Enron's West Coast trading operation. When internal lawyers warned the practices were "deceptive" and potentially criminal, management took no disciplinary action.
"Banging the close" cost billions.
Amaranth Advisors' $6.6 billion collapse in 2006 was the largest hedge fund failure at that time. Head trader Brian Hunter accumulated over 3,000 futures contracts, then dumped them in the final 30 minutes to artificially depress settlement prices.
False Price Reporting
From 2003 to 2008, CFTC brought unprecedented enforcement actions revealing industry-wide fraud. Companies systematically submitted false data to price indices that determined billions in transactions.
42 Companies Caught
The enforcement wave netted 42 companies and 31 individuals, with recorded phone calls showing traders discussing how they would "crap on" markets and coordinate false reporting.
Penalties as Cost of Business
Reliant Energy: $18M. Duke Energy: $28M. Shell/Coral Energy: $30M. These penalties pale compared to manipulation profits.
Manipulation continues with record penalties.
JPMorgan (2013)
$410 millionUsed 12 different "manipulative bidding strategies" to charge grids up to 80 times prevailing power prices.
Barclays (2015)
$488 million655 separate manipulation events from 2006-2008, with internal messages showing traders gleefully discussing how they would "crap on" the market.
Winter Storm Uri (2021)
$9,000/MWhNatural gas prices jumped to $1,250/MMBtu - over 300 times normal levels. Energy Transfer Partners alone estimated to have made $2.4 billion in storm profits.
American Efficient LLC (2024)
$722 million proposedFERC's largest-ever penalty. Allegedly operated fraudulent "energy efficiency" programs that saved no actual energy while extracting $473.7 million in capacity payments.
Vulnerable populations pay the price.
U.S. households struggle to pay energy bills
Report forgoing food to keep the lights on
During Hurricane Maria's aftermath, 9.5% of 4,645 deaths resulted from inability to access electricity for respiratory equipment. Low-income families, particularly Black and Latino households, experience disproportionately high disconnection rates.
California Rate Increases (Past Decade)
- PG&E: 110% increase
- SCE: 90% increase
- SDG&E: 82% increase
- Ratepayers: $27 billion in wildfire costs passed through (2019-2024)
Regulatory capture enables it all.
The revolving door between energy regulators and industry creates systematic conflicts of interest. FERC commissioners leave to join lobbying firms within weeks. Utilities spend $91.6 million annually on trade association dues - costs passed directly to ratepayers.
A 2003 GAO Report Found:
74% of FERC employees believed the agency's ability to monitor markets had improved "little or no extent" - despite the California crisis. The agency's original penalty authority of just $10,000 per day was woefully inadequate compared to daily manipulation profits measured in millions.
Crime pays - even after getting caught.
Despite over $4 billion in penalties and criminal prosecutions, the profits from manipulation far exceed the costs of getting caught. Until structural reforms address regulatory capture and close market design loopholes, American consumers remain vulnerable to exploitation.