Davis Loses Before High Court
California lost a U-S Supreme Court appeal today over Governor Gray Davis´ seizure of electricity contracts at the height of last year´s power crisis. The contracts allow state utilities to purchase electricity in advance, at a set price. The power marketer, Duke Energy, claimed California utilities defaulted on power contracts during the state energy crisis, and that federal law allowed suppliers to respond by having the contracts voided. The energy could then be resold at higher prices. North Carolina-based Duke Energy sued the governor last year, alleging that Davis illegally took control of the long-term contracts. The Ninth U-S Circuit Court of Appeals agreed. The state then appealed to the Supreme Court, couching the case as a states´ rights matter. The case is rooted in California´s decision to deregulate its energy market in 1996. Davis said he acted to prevent the power from being resold to buyers outside California.