Town Square

Enron wins again, Palo Alto and other cities lose

Original post made by Diana Diamond, Palo Alto Online blogger, on Jun 20, 2006

Enron wins again! The company that manipulated natural gas and electricity prices, gouging thousands of Californians, including Palo Alto residents, has just won a $50 million settlement from two utilities – Silicon Valley Power, part of the city of Santa Clara, Calif., and Valley Electric Association a cooperative that serves the region west of Las Vegas.

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Posted by Art Kraemer
a resident of Crescent Park
on Jun 20, 2006 at 3:15 pm

Where were the legal staffs of Palo Alto and the other cities when they signed contracts that contained the temination clauses that gave Enron protection but no protection to the cities? "Due diligence" obviously didn't happen.

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Posted by Diana Diamond
Palo Alto Online blogger
on Jun 20, 2006 at 4:13 pm

Diana Diamond is a registered user.

Great question, Art. I can't understand why Enron would have a termination penalty but the cities did not include any protection if Enron failed to deliver. Maybe they were so anxious about ensuring that customers continued to get gas and electric that they rushed into the contract.

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Posted by Art Kraemer
a resident of Crescent Park
on Jun 20, 2006 at 5:31 pm

Diana, You are probably correct. They rushed into the contract. Did those in charge, namely, Utilities Director Ulrich skip the legal review or did the legal staff just miss it? Now that the Weekly has access to the Palo Alto Utilities investigation information, perhaps someone should investigate whether allowing Ulrich to retire on a very large pension and full medical coverage was proper or should he have been fired for cause.

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Posted by Jeramy Gordon
a resident of another community
on Jun 22, 2006 at 10:47 pm

Diana, congrats on your new position at the Weekly. I look forward to reading your blog so I can keep up on all the crazies in Palo Alto. Shoot me an e-mail sometime, we need to catch up. — Jeramy