California Edison v. Arizona Electric Power Cooperative, also known as In re: Electric Refund Cases, is scheduled to begin November 1, 2010 in Los Angeles, before Hon. Judge Carl J. West.
In 1996, California deregulated its power markets and created the California Power Exchange Corporation (CalPX). CalPX auctions resulted in a single market clearing price that applied to all sellers and buyers.
However, sellers, including Enron traders, discovered that the energy markets could be manipulated by withholding power — for example, by unnecessarily shutting down power plants to create an illusion of scarcity — and then demanding extremely high prices.
From May 2000 to June 2001, unjust and unreasonable rates were passed through to the public utilities, which were statutorily forced to buy power through CalPX.
In April, 2007, the utilities sued various governmental entities for breach of contract and unjust enrichment to recover the amounts received by the governmental entities for wholesale power in excess of the lawful rates.
The case was dismissed on procedural grounds in 2008, but the dismissal was reversed in 2010, and the case is proceeding to trial.