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After conducting a hasty review, the Alberta government is expected to address allegations today that Enron Corp. secretly used it as a testing ground for power-trading schemes as the province was deregulating its electricity sector in 1999.

"It's being taken very seriously. Our No. 1 priority is to protect Alberta consumers," Cathy Housdorff, spokeswoman for the province's Energy Minister Greg Melchin, said yesterday.

The government first learned about the damning claims after a media report surfaced on Friday that, according to documents in a lawsuit, the now-bankrupt American energy trader made $45-million (Canadian) in a single day by creating a fake power shortage on Alberta's deregulated power grid.

"It was testing for more extensive market manipulations they had planned later for the California market," claimed Eric Christensen, a lawyer for a public utility in Washington state.

The company's gaming tactics, with names such as "Death Star" and "Fat Boy," became known for reaping large profits in California for the company, while the state dealt with surging prices and rolling blackouts.

The public utility in Washington state, which is currently being sued by Enron, claims information about the alleged Alberta connection is contained in documents and phone transcripts it unearthed.

Ms. Housdorff said that over the weekend, government officials pored over previous investigations into Enron's dealings in Alberta. The Houston-based company collapsed in 2001 and its executives were accused of engineering a web of secretive, off-the-books deals that concealed its soaring debt, fraudulent accounting and artificially inflated profits.

Alberta's Energy Minister told a Calgary newspaper yesterday that he was skeptical the alleged scheme, which was believed to have been code-named "Project Stanley," in honour of the Stanley Cup hockey trophy, would be proven true.

"There is nothing to suggest any wrongdoing here in Canada," Mr. Melchin told the Calgary Sun. He also said that even if the claims are true, it would be difficult for the province to recover any money.

"Enron is in bankruptcy . . . there is nothing to get," he said.

Martin Merritt, president of the Alberta Market Surveillance Administrator, has also publicly questioned the allegations.

In December, 1999, the federal Competition Bureau in Ottawa investigated "behaviour that appeared to be consistent with criminal bid-rigging" on the part of Enron and Powerex Corp., a unit of BC Hydro, after receiving a tip from Alberta's power pool. However, the investigation stopped in 2000 when the bureau said it found no evidence of wrongdoing.

The Competition Bureau is aware of the latest allegations, but an official would not say if it intends to re-launch its probe.

With files from Reuters News Agency