The University of California, California State University and Enron Energy Services announced today a settlement agreement that will extend their contract for two years and return the two university systems to direct access service from Enron.

As part of the agreement, UC and the CSU will drop their lawsuit against Enron and Enron will dismiss its appeal. The two university systems had brought suit in federal court seeking to retain their status as direct access Enron customers after Enron had resourced their power procurement to the Southern California Edison and Pacific Gas & Electric utility companies.

"We are delighted that our negotiations with Enron have ended with retention of the two university systems as direct access Enron customers," said Joseph Mullinix, UC senior vice president for business and finance.

"The California State University is pleased that we have been able to resolve our differences with Enron and retain our direct access status," said Richard West, CSU executive vice chancellor and chief financial officer. "This agreement means considerable savings for the universities and allows us to continue with our energy conservation efforts."

"Enron has always been a strong advocate of the benefits of direct access, and we are pleased to be able to extend our contract for two years with UC/CSU," said Marty Sunde, vice chairman, Enron Energy Services. "Separately, with the potential elimination of direct access for California customers, Enron is once again directly serving its commercial customers in California, including UC and CSU. As more and more customers in California see the importance of managing their price risk in power markets, commercial energy users have increased interest in our product offerings."

The current four-year contract with Enron is scheduled to end on March 31, 2002. The two-year extension, approved in principle, would continue the two university systems as direct access Enron customers until March 31, 2004.

Enron and the universities will negotiate price and other terms of the extension between now and Dec. 1, 2001. Both parties have the right to terminate the extension if an agreement is not reached by Dec. 1.

The agreement covers all UC campuses and the Office of the President, with the exception of UCLA and UC Riverside, who have agreements with their local municipalities. All CSU campuses, except Los Angeles, Northridge, Sacramento and Stanislaus, are part of the Enron contract, as is the CSU Office of the Chancellor.

Together, UC and CSU rank as the largest single customer of electricity in California. UC's systemwide peak load is 332 megawatts, and CSU's is 117 megawatts. One megawatt powers approximately 1,000 homes.

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Last Updated: July 11, 2001

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