Final Report on Enron Price Manipulation

'Fat Boy.' 'Death Star.' 'Get Shorty.' Enron traders named their manipulation strategies like video game characters. This FERC investigation documents how a company exploited newly designed markets through false supply-and-demand information, deliberate grid overloading, and undisclosed partnerships. The crisis cost California $40-45 billion. Enron submitted false schedules, withheld available electricity, and created congestion to receive payments for relieving it—exploiting the gap between market rules and actual behavior. The manipulation succeeded because California's market design assumed honest participation. Like a signaling system corrupted by deceptive signals, the market couldn't distinguish genuine supply constraints from manufactured ones. FERC revoked Enron's market-based rate authority in June 2003—effectively its license to trade. The investigation yielded $6.3 billion in monetary settlements and contributed to criminal prosecutions. The report documents the specific mechanisms of deception that new markets must defend against.