Court Grants Temporary Order Sought by Attorney General, ISO to Keep Power Available for Purchase by California

(SACRAMENTO) – US District Judge Frank C. Damrell Jr. today extended the temporary restraining order sought by Attorney General Bill Lockyer and the California Independent Systems Operator, requiring four major power generators to continue to sell electricity to California.

Rejecting arguments advanced by the energy companies, the judge agreed to require Reliant, Dynegy, AES and Williams to sell power to California until another court hearing is held February 16. The next hearing will determine whether the temporary restraining order will be converted to a preliminary injunction, which would remain in effect until a trial is held on the merits.

In issuing his early evening decision, Judge Damrell said, "The State of California is confronting an energy crisis of catastrophic proportions."

The temporary court order was sought after the power companies would not commit to selling electricity to California. A federal Department of Energy order that required out-of-state generators to sell to California expired at midnight Tuesday.

"While the precise amount of electricity available from defendants to respond to emergency dispatch orders is uncertain and in dispute, it is nevertheless significant, and its loss poses an imminent threat of blackouts," the judge said. "The parties do not dispute that such blackouts pose a dire threat to public health and safety."

Reliant controls approximately 3,800 megawatts of generating capacity in California. Dynegy has approximately 2,000 megawatts of capacity. AES has approximately 4,083 megawatts of capacity, and Williams markets AES' output.

In seeking the court order, the Attorney General had argued that the State of California would suffer irreparable harm, most notably in trying to stabilize and resolve the State's energy crisis as proclaimed in the Governor's Declaration of State of Emergency. The court was told that another consequence of having Reliant able to withhold power would be the imbalance in the market with power generators seeking to sell power in the markets in which they know they can make more money. The result would be to make it nearly impossible for the California Department of Water Resources to negotiate the long-term contracts at reasonable rates and cause prices to continue to soar.