UCSD finds new energy provider after Enron Corp. goes bankrupt

    A new quarter starts this week and so does UCSD’s new energy contract. The University of California’s former energy contract with bankrupt energy giant Enron Corp. expired March 31. The University of California signed a new seven-month contract with Arizona Public Service Company that went into effect the same day.

    The new contract with APS, an $8 billion subsidiary of Pinnacle West Capital Corp., will supply seven UC campuses and 19 California State University campuses with electricity.

    Prices are still being discussed for the initial seven-month contract.

    “”We are still talking about the rate. The way [the contract] was written, the kilowatts per dollar is still up in the air,”” said UC spokesperson Charles McFadden.

    If the contract is renewed, the price the university will be charged for its electrical power will be determined by the lowest cost of energy during the initial seven months.

    Legislation from 1997 called for the deregulation of energy corporations and allowed the University of California to purchase its energy directly.

    In 1998, the university signed a direct energy contract with Enron that was extremely advantageous financially.

    “”It was a very, very low rate,”” McFadden said. “”It was the average rate in 1996 minus 5 percent.””

    The current contract with APS will also allow the University of California to purchase its energy directly. This direct contract is projected to save the university millions of dollars as compared to the university’s contracts before deregulation.

    Although the new contract will cost more than the one with Enron did, it will still save the university money compared to what it paid prior to 1998.

    “”We estimate that we will save $12 million a year with this new contract,”” McFadden said.

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