Examining Enron: Electricity Market Manipulation and the Effect on the Western States
TL;DR
Enron's 'Death Star' strategy: get paid to solve fake problems. When deception pays better than honesty, markets collapse.
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Primary source documenting how Enron manipulated California's electricity market through deceptive signaling strategies with names like 'Death Star' and 'Get Shorty.' Essential reading for understanding how markets collapse when dishonest signals become more profitable than honest ones—the same mechanism that threatens biological communication systems.
Key Findings from Affairs (2002)
- Enron's 'Death Star' strategy collected congestion relief payments without moving any electricity or relieving any congestion
- 'Get Shorty' involved shorting ancillary services by submitting false information about generation sources
- Damage to California's economy estimated at $40-45 billion; overcharges to ratepayers estimated at $9 billion
- Enron officials met with FERC at least 25 times during the crisis while lobbying against price controls
- Recorded calls showed traders bragging about stealing from 'Grandma Millie' in California
- Enron settled for $1.52 billion—approximately 3% of estimated damages