By the time Peace arrived . . . promoting electricity deregulation: Peace, Cooper, interviews by author, 2016; “Electricity Industry Restructuring: History and Background,” The State Factor, ALEC report, November 1996; ALEC Model Bill: “Electric Industry Restructuring Act”; Corporate America’s Trojan Horse in the States.
During the 1990s . . . key members of the ALEC task force: Stuart Eskenazi and Mike Ward, “Lawmakers’ Corporate Classmates,” Austin American-Statesman, November 2, 1997; Eskenazi and Ward, “2 Learning Styles: Seminars and the Golf Course,” Austin American-Statesman, November 2, 1997; Corporate America’s Trojan Horse in the States.
Even though . . . Peace remained uneasy: Peace, interviews by author, 2016.
Peace and Brulte passed the bill in August of 1998: Dan Moran, “Deregulation Bill Signed by Wilson,” Los Angeles Times, September 24, 1996.
Koch Industries had constructed its own intelligence network: O’Neill, Beckett, speaking on background, interviews by author, 2016.
Traders on the electricity desk analyzed the new marketplace: Antrich, FERC testimony, October 25, 2011, 5–6.
Darrell Antrich helped lead . . . West Power Clearing Model: Beckett, interviews by author, 2016; Antrich, FERC testimony, December 3, 2003, 1; photos of Beckett and Antrich from Barboza, “Energy Traders Continue to Prowl.”
The bill created a new market . . . buy and sell megawatt-hours: Peace, interviews by author, 2016; McLean and Elkind, Smartest Guys, 264–83; Russell, “Dim Bulbs.”
When Melissa Beckett started her day: Beckett, interviews by author, 2016; photos of Beckett’s desk and surroundings from Barboza, “Energy Traders Continue to Prowl.”
West Power Clearing Model began to produce some very strange numbers: Beckett, interviews by author, 2016; Antrich, FERC testimony, October, 25, 2011, 7.
The thinking of Enron traders was captured in recorded phone calls: “Blackout: The California Crisis,” Frontline, 2001; “Enron Traders Talking About Grandma Millie,” video, 2:11, uploaded to YouTube by irwinmcraw on March 17, 2009, www.youtube.com/watch?v=DOLNWF5QMxY.
It would be up to the traders . . . make the markets work: Beckett, interviews by author, 2016; Antrich, FERC testimony, October 25, 2011, 7.
Antrich wasn’t . . . met with Tom Nesmith: Beckett, interviews by author, 2016; Antrich, FERC testimony, December 3, 2003, 3–6, and October 25, 2011, 6; Gary Taylor, FERC testimony, February 27, 2004, 60.
Antrich and his team . . . information-sharing agreement: Consulting agreement between Koch Energy Trading and PNM, dated to take effect January 2001. The KET representative on the document is David Owens, vice president of Koch Energy Trading, while the PNM representative is Duane Farmer, director of Wholesale Power Marketing.
Enron traders . . . while the power from California was not: The author is grateful to energy consultant Gary Taylor, who served as an expert witness for federal authorities investigating illegal trading schemes in California, for his detailed and patient explanations of the parking trade. Readers with more interest in the topic are urged to pick up the thorough and well-researched book he coauthored, Market Power and Market Manipulation in Energy Markets: From the California Crisis to the Present (Reston, VA: Public Utilities Reports, 2015); Taylor, interviews by author, 2016; Taylor, FERC testimony, January 31, 2005, 33–35, and February 27, 2004, 64–82.
Once PNM learned . . . it started pitching the service to trading companies: Taylor, FERC testimony, February 27, 2004, 64–82; transcript of Nesmith phone call in ibid., 76–78.
On February 28, 2000, Koch Energy . . . in the coming months: Contract between Koch Energy Trading and PNM, dated February 22, 2000, and signed February 28, 2000.
“I am excited about practicing”: Darell Antrich to Tom Nesmith, e-mail, May 5, 2000.
On May 22, 2000 . . . parking transactions: Date and volumes of parking transactions taken from “Response of Koch Energy Trading, Inc., to Order to Show Cause,” filed with FERC, July 31, 2003, 5–6; Antrich, FERC testimony, December 3, 2003, 8; a detailed overview of Koch’s “parking” activities is also provided in Taylor’s testimony to FERC, February 27, 2004, 82–89.
The state was facing a shortage . . . Independent System Operator: Nancy Rivera Brooks and Zanto Peabody, “Heat Triggers Moderate Power Emergency,” Los Angeles Times, May 23, 2000.
Koch’s parking arrangement . . . desperation: “Response of Koch Energy,” filed with FERC, July 31, 2003, chart breakdown of May 22 parking transaction, chart 1-1; Antrich, FERC testimony, October 25, 2011, 9–11.
Of the 650 megawatt-hours that Koch parked with PNM: Ibid.
Gaming the system was creating dire, real-world effects: Rivera Brooks and Peabody, “Heat Brings Outages and Emptied Offices.”
On June 14 Koch’s traders executed . . . complex parking transaction: “Response of Koch Energy Trading,” filed with FERC, July 31, 2003, chart breakdown of May 22 parking transaction, chart 2-2.
Darrell Antrich e-mailed . . . Brian Arriaga: Antrich to Arriaga, e-mail, June 15, 2000.
On June 14 and 15, temperatures rose above 100 degrees: Mara Dolan, “California and the West: S.F. Cools Off but Outages Persist,” Los Angeles Times, June 16, 2000.
Lights blinked . . . inside the cavernous control room: Images from ISO office control room taken from ABC News reports of blackouts.
By the afternoon of the fourteenth . . . fall short: Nancy Rivera Brooks and Charles Piller, “Bay Area Heat Wave Strains Power Grid,” Los Angeles Times, June 15, 2000.
Throughout the autumn . . . incomprehensibly complex schemes: McLean and Elkind, Smartest Guys, 264–83.
Steve Peace . . . knowing more than anybody: Peace, interviews by author, 2016.
a similar fatalism playing out at the ISO offices: Ibid.; ABC News report on blackouts; “Blackout: The California Crisis.”
Gray Davis was a popular, if somewhat bland, governor: John Balzar, “Bright Days for Gray Davis,” Los Angeles Times, July 7, 2006.
The weekend of January 12, 2001: Peace, interviews by author, 2016; Lynda Gledhill, “Davis to Seek State Role in Energy Pricing,” San Francisco Chronicle, January 15, 2001; Nancy Vogel, Bob Drogin, and Nicholas Riccardi, “Energy Players Deeply Divided on Rescue Plan,” Los Angeles Times, January 15, 2001.
Davis quickly discovered . . . Market prices were nonnegotiable: Nancy Vogel and Miguel Bustillo, “Power Firm Demands Utilities Pay Bills Now,” Los Angeles Times, January 16, 2001.
FERC also refused to compromise: Peace, interviews by author, 2016; Steve Johnson and Mark Gladstone, “Federal Panel Blasted over Emergency Moves, Davis Calls Commissioners ‘Pawns’ of Electricity Sellers,” San Jose Mercury News, December 16, 2000; Bart Jansen, “Davis Asks FERC to Order Refunds for Power Customers,” Associated Press, November 9, 2000; Jon Sarchie, “Western Governors Turn Up Pressure for Electricity Price Cap,” Associated Press, December 20, 2000.
Mike Bowers steered his semitruck off the freeway: Peace, interviews by author, 2016; Seth Rosenfeld, Janine DeFao, and Jaxon Van Derbeken, “Capitol Suspect ‘Flopped’—Mom Says Prison Mental Health Systems Failed Him,” San Francisco Chronicle, January 17, 2001; Jim Williams and Alison Stewart, “California’s Energy Crisis Forces Governor to Declare State of Emergency; Truck Driver Who Hit California Capitol Was Ex-Convict,” ABC News, January 18, 2001.