Enron's Power Play

On this cold January day in Houston, Enron President Jeffrey K. Skilling could easily play the pirate that California consumer groups are casting him as these days. After two weeks of sailing with his three children in the Virgin Islands, Skilling's face is slightly sunburned, and he sports a rakish post-vacation beard. But the CEO-elect isn't buying the buccaneer image that some have slapped on his company. He clearly thinks Californians should be thanking Enron, not castigating it, for its role in trying to push open the state's power markets. "We're on the side of angels," he says. "We're taking on the entrenched monopolies. In every business we've been in, we're the good guys."

Alas, the nation's largest energy merchant is garnering no such accolades from California's great deregulation experiment. Soaring power prices have pushed the state's utilities to the brink of bankruptcy and forced Third World-style blackouts across the world's sixth-largest economy. Enron and other electricity marketers and generators are being investigated by the state attorney general and sued by consumers amid accusations of profiteering and market manipulation. "Every trading company in the country has been feasting on California, and Enron is the shrewdest of them all. They are like sharks in a feeding frenzy," says Michael Shames, executive director of the Utility Consumers' Action Network in San Diego. Enron, an early critic of California's deregulation plan, hotly denies those charges.