EVERETT - The Snohomish County Public Utility District said Friday it will pay $18 million to settle all claims made by Enron Corp. against the Everett-based utility.
The agreement ends five years of litigation. Houston-based Enron had been seeking $180 million for electric power contracts made during the West Coast power crunch of 2000-01.
The utility, which serves 300,000 customers, canceled the contracts and refused to pay because it accused Enron of fraud.
The settlement will be paid out of the utility's reserves and will not affect its customers or cause a rate increase, said Steve Klein, general manager of the utility.
"Ten cents on the dollar was the maximum we would have settled for," he said. "It's sending the message that we have won."
The agreement was reached a few days before the utility was scheduled to begin binding arbitration and ring up more legal fees and risk the possibility of being forced to pay the entire $180 million.
The utility has spent about $16 million in legal expenses on this case as of Friday, Klein said.
Enron originally sought $116 million from the PUD for contracts it canceled in 2001.
The $180 million Enron was seeking included interest.
Phone messages asking for comment at Enron headquarters and New York and Chicago public relations firms that have represented the company were not immediately returned.
A year ago, the Federal Energy Regulatory Commission ruled that the Snohomish utility didn't owe Enron anything for canceling a nine-year contract to purchase power.
That decision did not end the utility's dispute with Enron and its creditors, however, because the bankruptcy judge handling more than 100 claims against Enron did not agree with the federal regulator's interpretation of the law and ordered the binding arbitration, Klein said.
He said the settlement makes sense from a business perspective and allows the utility to put all its energy toward serving its customers.