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New York PSC Approves Ravenswood Energy Storage Project

LCG, October 18, 2019--The New York State Public Service Commission (PSC) yesterday approved construction of the largest battery storage facility in New York State history. The 316-MW Ravenswood Energy Storage Project will be built in Long Island City, Queens, New York and scheduled to be partially operational by March 2021.

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Xcel Energy, EVRAZ North America and Lightsource BP Announce 250-MW Solar Project in Colorado

LCG, October 1, 2019--Xcel Energy, EVRAZ North America and Lightsource BP announced Friday that they have reached a long-term agreement to develop a 240-MW solar facility in Colorado. Lightsource BP will finance, build, own and operate the Bighorn Solar project and sell all the electricity it generates to Xcel Energy under a long-term power purchase agreement (PPA). The project will be built on EVRAZ Rocky Mountain Steel property in Pueblo, making it the largest on-site solar facility dedicated to a single customer in the country.

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Industry News

Enron Admits Padding Profits by $591 Million

LCG, Nov. 9, 2001--Enron Corp. admitted yesterday that it had padded its reported profits by $591 billion over the past four and three-quarters years and said its earnings reports would have to be restated.

"Financial statements for and the audit reports relating to the year-end financial statements for 1997 through 2000 should not be relied upon," the company said. The first three quarters of 2001 were also off the mark.

Should not be relied upon? It is more difficult to produce financial statement which should not be relied upon than it is to simply post the numbers fair and square. Moreover, a lot of people have to sign off on those financial statements -- the company's financial executives, its chief executive and its independent auditors.

Enron's chief executive, Jeff Skilling, resigned in August, saying he needed a change in lifestyle. In October, the company sacked its chief financial officer, Andrew Fastow. Both Skilling and Fastow had made a lot of money, over and above their regular compensation.

As to the padded profits, Enron says it should have reported 1997 earnings as $9 million, and not $105 million. Earnings for 1998 should have been reported as $590 million, and not $703 million. In 1999, the company earned $643 million and not $893 million. Last year, earnings should have been reported as $847 million and not $979 million. So far this year, Enron has reported earnings of $211 million, but has actually earned $216 million, the company now says.

Enron told the Securities and Exchange Commission, which is investigating the company's dealings with partnerships controlled by Fastow, that the confusion stemmed from accounting for profits earned in transactions with those partnerships. By way of explanation, Enron offered this less than edifying bit of foggy English:

"Many of these transactions involve 'special purpose entities,' or 'SPEs.' Accounting guidelines allow for the non-consolidation of SPEs from the sponsoring company's financial statements in certain circumstances. Accordingly, certain transactions between the sponsoring company and the SPE may result in gain or loss and/or cash flow being recognized by the sponsor, commonly referred to by financial institutions as 'monetizations.'"

During the period Enron overstated its profits, its shares enjoyed a spectacular run-up on the New York Stock Exchange. Skilling is said to have made an extra $84.5 million between 1996 and 2000, before he became chief executive. Fastow, according to people close to the company but not part of it, earned more than $100 million from transactions between Enron and the partnerships he controlled.

The bloodletting at Enron is not over. Yesterday, the company said it was terminating the employment of Ben Glisan, managing director and treasurer of Enron Corp., and Kristina Mordaunt, a managing director and counsel of an Enron division. The company said it believes that these two employees, along with four other former Enron employees, were involved as partners in one of Fastow's partnerships that had dealings with Enron.

In recent years, support for Enron in the investment community has been an article of faith -- sort of like belief in Tinker Bell or the tooth fairy. The Internet version of Forbes Magazine, had this comment:

"During the fat years, Enron's books were known for being as complex as a Thomas Pynchon novel. Even those who actually read them had trouble understanding. But everyone--whether or not they deciphered what was going on--seemed confident they were in the presence of genius and felt good about themselves, too."

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