Campus: Office of the Chancellor -- April 12, 2001
UC, CSU, Attorney General Win Preliminary Injunction Against Enron Energy
The University of California and the California State University today
won a preliminary injunction preventing Enron Energy Services from unilaterally
jettisoning the two university systems as direct access electricity
U.S. District Court Judge Phyllis Hamilton, ruling from the bench in
San Francisco, issued the preliminary injunction effective immediately.
The ruling directs Houston-based Enron to return the California State
University (CSU) and University of California (UC) to Direct Access
service from Enron and voids Enron's attempt to switch the Universities
to bundled electric service as provided by the Pacific Gas & Electric
Company and Southern California Edison.
California Attorney General Bill Lockyer filed a friend of the court
brief on behalf of the two universities and appeared in court to argue
for issuance of the preliminary injunction.
The CSU, UC and the attorney general argued that Enron could not legally
breach its contract merely because the changing economic picture for
power in California made it less financially attractive for Enron to
continue to honor the contract.
CSU and UC also argued that removing them as direct access customers
lessened their ability to manage their power use in the most sophisticated
manner possible to lighten the load on the state's electricity grid.
They also said Enron's attempt to abrogate the contract had the potential
for costing California taxpayers millions of additional dollars.
Enron signed the four-year contract to provide electricity at predetermined
rates in 1998; it is due to expire on March 31, 2002.
In issuing the preliminary injunction, Judge Hamilton said there is
a "strong possibility" that UC and CSU would prevail if the
matter comes to trial.
CSU and UC are two of the largest energy users in the state.
UC generates approximately 21 percent of its power needs through its
own cogeneration plants and has a systemwide peak load of 332 megawatts.
A megawatt powers approximately 1,000 homes.
CSU generates approximately 10 percent of its total power needs, and
its systemwide peak load is about 117 megawatts.
CSU's annual electric bill is approximately $40 million and its natural
gas bill is about $20 million.
UC's annual electric bill is approximately $87 million, and its natural
gas bill is approximately $26 million.