Santa Clara, Calif. – March 10, 2006 – The City of Santa Clara has agreed to a $36.5 million settlement with Enron and the Federal Energy Regulatory Commission (FERC) staff, ending a four-year litigation.  In 2002 after filing for bankruptcy, Enron unilaterally terminated two long-term power contracts under which the City was buying Enron-supplied energy to meet its obligation to serve its retail customers.  Enron subsequently filed suit against the City to pursue a $147 million early termination payment from the City.  The City disputed Enron’s right to terminate the contracts and the imposition of an early termination payment. 

Although the City and its attorneys continue to believe that it would have ultimately prevailed, the City of Santa Clara and its municipal electric utility, Silicon Valley Power (SVP), consider their decision to settle to be in the best interests of Santa Clara and its electric utility customers.  The settlement ends an expensive and lengthy litigation involving many parties in multiple legal proceedings.  The settlement will be paid out of SVP reserves and will not increase retail rates.

The settlement is subject to review and approval by the FERC and the Enron bankruptcy court.

Silicon Valley Power is the trademark adopted for use by the century-old Electric Department of the City of Santa Clara, California.  Silicon Valley Power provides power for more than 50,000 customers, including Applied Materials, Intel and National Semiconductor.  It also is an active participant in the wholesale energy markets in the Western United States. Visit www.siliconvalleypower.com for more information.