Enron Corp. said Friday it reached settlements totaling more than $400 million on disputed electricity and natural gas transactions in the western United States from 1997 to 2003.
The company said it settled with three parties -- the Federal Energy Regulatory Commission (FERC) staff, the city of Santa Clara, California, and its municipal utility, and Valley Electric Association Inc., a Nevada electricity cooperative.
Under the settlements, FERC will receive a $400 million penalty claim against subsidiary Enron Power Marketing Inc. (EPMI), the company said. The FERC staff will also receive up to $15 million in unsecured claims against EPMI.
The settlements come as the fraud and conspiracy trial of former Enron chief executives Jeffrey Skilling and Ken Lay .
An energy trading house that was once the nation’s seventh largest company, Enron declared bankruptcy in December 2001 following disclosures it had inflated profits and hidden billions of dollars in debt.
In the wake of the bankruptcy, state attorneys general, investor-owned and municipal utilities, and state energy agencies throughout the western states filed lawsuits and pressed claims against Enron, accusing the company of manipulating power markets to inflate profits.
Enron also launched legal actions to terminate power supply deals and collect payments from its electricity customers.
In the settlement with Santa Clara and its Silicon Valley Power utility, Enron will get a $36.5 million payment from the city for electricity contracts terminated in 2002. The city will get an unsecured bankruptcy claim of $4 million against EPMI.
Under the Valley Electric deal, Enron will get $8 million to settle power contracts ended in 2002 and Valley Electric will get an unsecured bankruptcy claim of $14 million against EPMI.
The settlements are subject to approval by FERC and the Enron bankruptcy court in New York.
Enron previously negotiated settlements with attorneys general in California, Oregon and Washington and with utilities in California and Nevada, among other parties.
The company said claims remain involving the Snohomish County Public Utility District in Washington state and the Metropolitan Water District of Southern California.