Enron reaches settlement agreement on western U.S. gas and electricity transaction claims

By Caroline Salls

Pittsburgh, July 15 - Enron Corp. reached an agreement to settle civil claims in connection with natural gas and electricity transactions in the Western United States from 1997 to 2003, including claims filed in proceedings with the Federal Energy Regulatory Commission (FERC), according to a company news release.

The parties entering into the settlement agreement with Enron are Pacific Gas & Electric Co., Southern California Edison Co., San Diego Gas & Electric Co., the People of the State of California, the California Department of Water Resources, the California Electricity Oversight Board and the attorneys general of Oregon and Washington.

Other potential Western U.S. energy market participants may opt in to the settlement at a later date.

In exchange for the dismissal and release of claims against Enron, the parties in the settlement will receive a shared unsecured bankruptcy claim of $875 million against Enron Power Marketing, Inc., an Enron subsidiary, and will receive distributions under Enron's confirmed Chapter 11 plan of reorganization.

The settling parties also will receive up to $47.3 million in receivables and cash collateral owing to Enron.

The governmental units in the settlement will also receive a civil penalty claim against Enron Power Marketing for $600 million.

According to the release, Enron has not admitted to any wrongdoing on any matter covered by the settlement.

"This settlement represents the latest in a series of significant issues that have been resolved in Enron's bankruptcy proceedings," Enron interim chief executive officer and chief restructuring Stephen Cooper said in the release.

"Settlements such as this one allow us to remove claims against the estate so that we can accelerate distributions to all other creditors."

The settlement remains subject to the approval of the FERC, the California Public Utilities Commission and the U.S. Bankruptcy Court for the Southern District of New York.

Enron, a Houston-based energy company, emerged from bankruptcy on Nov. 18, 2004.

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