07.01.04

Cantwell: Enron lawsuit could cost Snohomish County $2.5 million, enough to pay for textbooks for 40,000 students

Cantwell, Inslee meet with Snohomish County educators on financial impacts of Enron's market manipulation to local schools

EVERETT, WA – U.S. Senator Maria Cantwell (D-WA) today announced that Enron's $122 million lawsuit against Snohomish PUD could cost Snohomish County Schools $2.5 million, enough to pay for textbooks for 40,000 students for a full year. Snohomish County schools have already paid more than $9 million in increased energy costs due to energy market manipulation and the western energy crisis despite cutting usage by nearly ten percent.

Cantwell joined Congressman Jay Inslee (D-WA) at the Everett School District to discuss the ongoing financial impacts of Enron's market manipulation on local schools with Snohomish County educators and the Snohomish PUD.

"Students are still paying the price for Enron's market manipulation," Cantwell said. "I'm going to take their story to Washington, DC because federal regulators need to know that there are real and continuing costs to what Enron did. It's time that federal regulators do their job to protect us from Enron's illegal activity."

"While Washington State schools are facing huge financial challenges, the Majority Leadership continues to prevent a vote on our efforts to reduce the energy costs for our schools and families," Inslee said. "The House had a chance last week to provide relief to Snohomish County ratepayers, but the Leadership decided to put their friendship with Enron above common sense refunds for Snohomish County."

Enron has filed a $122 million lawsuit against Snohomish PUD, claiming that Snohomish should be forced to pay the remaining value on a manipulated energy contract that the utility cancelled in 2001. The case is currently being considered by the Federal Energy Regulatory Commission (FERC) which has repeatedly refused to protect Snohomish PUD by using its power to void the contract.

The Snohomish PUD Board has not determined how to collect the $122 million from customers in the event the utility loses the litigation battle with Enron. However, if one assumes that the $122 million would be collected on a per kilowatt-hour basis (which would reflect the varying usages between various types of customers, i.e. a residential customer uses much less electricity than a large commercial business) the estimated collective financial exposure to all of the school districts is $2.5 million. Everett School District would bear approximately $480,000 of that burden and Snohomish School District $200,000.

"To put things in perspective, $2.5 million is enough to pay for textbooks for 40,000 students for a full year," Cantwell said. "School administrators in Snohomish County have done a superb job of insulating students from the effects of higher power costs, but now we need help from the federal government to protect our schools from energy market manipulation."

According to the Association of American Publishers, the average cost per student per year for textbooks is $60. That means that in real-world terms the cost of Enron's lawsuit could pay for textbooks for 40,000 students for a full year.

Snohomish County schools served 105,712 students in the 2003-4 school year, 18,064 in the Everett School District and 8,904 in the Snohomish School District.

Snohomish PUD was forced to raise rates after energy market manipulation and the western energy crisis. As a result, through June 30 of this year, Snohomish schools have paid $9.4 million in increased costs, despite cutting usage by nearly 10 percent. The schools have paid approximately $30 million for electricity since January 1, 2004 and will pay nearly $10 million in 2004 on electricity alone.