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Date: Tue, 08 May 2001 15:26:40 -0500
From: "Tracey Bradley" <tbradley@bracepatt.com>
To: "Ronald Carroll" <rcarroll@bracepatt.com>, "Randall Rich" 
<rrich@bracepatt.com>
Subject: Court Injunction Suspended in Enron Case Involving CA Universities
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Court Won't Order Enron to Supply Uc Energy / Cal State's Electric Supply for 
Summer Also Could Become Critical
( May 08, 2001 )


A federal appeals court has granted Enron a reprieve from an order requiring 
the Houston-based energy giant to restore direct electric service to 
California's public universities, leaving them subject to uncertain utility 
supplies this summer.

The University of California and California State University systems won an 
injunction April 11 from U.S. District Judge Phyllis Hamilton, who said Enron 
appeared to have broken its contract to supply both university systems with 
power through next March.

But in an order made public yesterday, a three-judge U.S. Court of Appeals 
panel suspended the injunction until the court rules on its legality, 
possibly by late July or early August.

In the meantime, most campuses will continue to get electricity from Pacific 
Gas and Electric and Southern California Edison Co., whose customers are 
expected to face rolling blackouts for much of the summer.

UC spokesman Chuck McFadden said university hospitals and some other 
facilities were exempt from blackouts, but classrooms and administrative 
offices could go dark when supplies dropped.

Enron spokeswoman Peggy Mahoney said the company was pleased with the ruling. 
"This does not change our continued commitment to honor all the financial and 
other terms of the agreement," she said.

Enron signed four-year contracts with the universities in 1998 to supply 
power for 5 percent less than the state's price cap. The company dropped 
direct service abruptly to the universities Feb. 1, forcing them to rely on 
power supplies from PG&E and Southern California Edison.

Enron promised to keep its pledge of low rates through next March. But the 
universities said a return to utility service would hurt their conservation 
efforts, and the loss of direct supplies would threaten blackouts.

The appellate panel did not decide whether Enron had violated its contract, 
but said the company, if it was wrong, could reimburse the universities for 
any losses they suffered.

The court also said Enron faced substantial losses if it had to restore 
direct service and ultimately won the contract dispute.