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

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Page 72 <strong>of</strong> 76SEATAC-400since there is no penalty for non-delivery.Fat Boys placed enormous pressure on the complex California system. They pulled energyfrom the PX and the IS0 markets and delivered the energy to the "back door" in a waywhere its delivery was uncertain. Enron's commitment to Fat Boy was enormouF over$200 million placed at risk on the gamble that the power scheduled to imaginary loads wouldbe paid for?6Figure 87Enron Fat Boy's Over The California Crisis8 Q. Were Fat Boys a significant issue in the operations <strong>of</strong> the Power Exchange and the"Id.97~d.
Page 73 <strong>of</strong> 76SEATAC-400ISO?A. Yes. The scheduling <strong>of</strong> energy to non-existent loads was common. The following chart showsFat Boys for the first declared emergency <strong>of</strong> the California crisis.Figure P8FaiBoys on May 22,2000Q. Why was the energy dedicated to Fat Boy effectively withheld from the CaliforniaPower Exchange?A. A Fat Boy removed energy from the supplies <strong>of</strong>fered to the Power Exchange. In effect, the FatBoy moved the supply curve at the power exchange to the left. The following chart showssupply and demand at the Power Exchange on May 22,2000 at 12:OO P.M. The blue linereflected the actual market. A large block <strong>of</strong> energy was scheduled to non-existent loads (moreprecisely, schedules much larger than the likely load) at the ISO. If this energy had been placedin the market as the design <strong>of</strong> the California system intended, the supply curve would have"Id.
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Prepared Direct Testimony of Robert McCullough on Behalf of the ...

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