Prepared Direct Testimony of Robert McCullough on Behalf of the ...

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1 Q. Was this difficult for Enron to execute?Page 54 <strong>of</strong> 76SEATAC-400
Page 55 <strong>of</strong> 76SEATAC-400Not at all. Despite the number <strong>of</strong> steps involved, this scheme, once invented, was apparently quitesimple to execute. Each <strong>of</strong> these transactions can be completed in a minute or two by a competenttrader. So for the investment <strong>of</strong> a few minutes' time, Enron was able to pocket hundreds,thousands, or tens <strong>of</strong> thousands <strong>of</strong> dollars.An even more interesting set <strong>of</strong> transactions took place on 5/5/2000. On that day, PGE's affidavitshows4' PGE doing a 45 MW "top half' transaction from hour-ending 12 through hour-ending 17.On that day, PGE also filed an LADWP schedule to wheel power from COB to Mead -- 45 MWfrom hour 12 through hour 16. For hour ending 17, Enron filed a single additional hour for thesame path, and the same number <strong>of</strong> megawatts. On the same day, for hours 12 through 17, Enronfiled exactly <strong>of</strong>fsetting IS0 schedules -- import 45 MW at Mead, export 45 MW at COB. Thisset <strong>of</strong> transactions speaks volumes about how tightly their trading desks were integrated. We canenvision no way that this set <strong>of</strong> transactions could have taken place without close coordinationbetween the two companies and the full knowledge <strong>of</strong> the implications <strong>of</strong> the transactions beingknown to PGE staff and management.Table 5 presents several more examples <strong>of</strong> Enron's Death Star transactions during the summer <strong>of</strong>2000.
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Prepared Direct Testimony of Robert McCullough on Behalf of the ...

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