University of California System Litigation

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The 9th Circuit of the U.S. Ct. of Appeals granted EES' request to stay an
injunction granted by the District Court in the UCS litigation, which would
have required EES to continue to directly serve UCS. The stay allows EES to
return the customer UCS to PG&E and SCE for utility service and thereby save
the future accrual of an additional $144 million of negative CTC
receivables. In approximately two months, the 9th Circuit will conduct a
further review of the stay. It is likely EES' service contract with USC will
expire before any trial at the District Court.