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CHICAGO - The Kroger Co. and energy provider Dynegy Inc. have settled a dispute related to electricity contracts made during the 2001 California energy crisis, the companies announced on Thursday.
Under the agreement, Kroger will pay Dynegy $110 million, but it will also terminate two contracts agreed on in the first quarter of 2001, Reuters reports. It renegotiated two other contracts, through which Dynegy indirectly provides electricity to Kroger stores.
The settlement must still be approved by the Federal Energy Regulatory Commission, which the companies expect to rule within two months.
Kroger had alleged in 2002 that Dynegy had overcharged it for services. During California's energy crisis, power shortages caused energy prices to spike.
The companies said they will each take a charge against earnings for the settlement. Dynegy said it expects Kroger to make the $110 million payment to Dynegy in the third quarter. The amount represents an accelerated payment under the restructured energy contracts.