PR Update for call at 2pm today

April 16, 2001

PR UPDATE

To: ???IEP PR Committee
Fr: ????McNally Temple Associates, Inc.
Re: ???PR Update

Key Messages

See attached memo (below)=20

Collateral Materials

California Journal Ad May =01. Conservation=20
California Journal Ad June =01. Topic: ?Open for discussion, Due May 9th=20
"Powerful Ideas" =01. At print. To be distributed to statewide media, capit=
ol=20
press corps, legislature and key California policy makers, Key Washington=
=20
policy makers, congressional ?members=20
Senate Investigation Hand-outs/Press kits: ?

???????????Previous investigations (Including FERC handout, analysis of=20
Lynch/Kahn Report, ????????
???????????analysis of recent ISO report)=20
???????????CPUC long-term contract history=20
???????????Early Warnings=20
???????????A primer on California?s Restructured Electric Power Industry=20
???????????The Perfect Storm (What caused California?s Electricity Crisis)
???????????Powerful Solutions=20
???????????Vintage Power Plant Series-Utilizing Outage Standard Information
???????????Who Powers California
???????????Regional supply/demand chart

Web-site =01. www.turnonthetruth.com, continue to update

Research

Update provided on call

Earned Media

Teleconference briefings with press =01. On Fridays, or as needed. ?Next=20
scheduled for Tuesday, April 17 at 11:00 am. 1-800-374-2393, pass code:=20
?Independent Energy Producers=20
Statewide and national media outreach =01. Ongoing=20
Editorial Board Meetings =01. Met with Sacramento Bee (April 11) and San Jo=
se=20
Mercury News (April 9). ?Will begin scheduling a round to preview "Powerful=
=20
Ideas" with: Sacramento Bee, San Jose Mercury News, San Francisco Chronicle=
,=20
San Diego Union Tribune, Los Angeles Times, Alameda News Group=20
"Powerful Solutions" =01. to be released week of April 23 with press briefi=
ng in=20
Sacramento and Los Angeles. ?Objective will be to promote IEP?s solutions,=
=20
while also incorporating Senate investigation key message points.=20
Response to Senate Investigation =01. available to respond to media in pers=
on at=20
during hearings =20
Electronic Media Summary =01.=20

???Governor Davis Speech Reaction: KXTV-10 Sacramento; KOVR-13 Sacramento;=
=20
KFBK-Am 1530 ???
???Sacramento; KMAX-31 Sacramento; KTVU-2 San Francisco; KPIX-5 Los Angeles=
;=20
KFMB-8 San=20
???Diego; KTTV-11; KNBC-4 Los Angeles ?
???PG&E Bankruptcy Reaction: KCRA-3 Sacramento; KXTV-10 Sacramento; KFBK-AM=
;=20
KCBS-AM; ?
???KGO-7 TV San Francisco; KPFA AM/FM Berkeley

KEY MESSAGES

Generators have been operating under the rules California established for i=
ts=20
electricity market. ?We did not create the market, nor did we write the=20
rules. ?In fact, the "big five" generators did not come to California until
AB 1890 invited them into the state, where they?ve since invested billions =
of=20
dollars buying, building and modernizing power plants.

=01. Energy companies, independent financial analysts and IEP warned that t=
he=20
PUC was failing to implement AB 1890 properly, and that the market was bein=
g=20
set up to fail, especially the residential market.
=01. Last summer, generators were urging and offering long-term contacts. T=
hey=20
were flatly rejected. ?Had they been adopted, the crisis could have been=20
prevented or its severity dramatically lessened.
=01. This crisis was caused by three things =01. the failure to enter into=
=20
long-term contracts, forcing an over-reliance on the spot market; a supply=
=20
shortage, and no retail market. ?The market can be fixed. ?It should not be=
=20
abandoned.

We?re an important part of the solution.

=01. We?ve made extraordinary efforts to keep our plants running during thi=
s=20
crisis to supply California homes and businesses with electricity.
=01. We?ve offered solutions and been cooperative partners in legislative a=
nd=20
regulatory efforts to end the crisis.=20
=01. Rather than using tax money, we?re investing billions of private-secto=
r=20
dollars to buy, modernize and build new power plants in California =01. to=
=20
generate electricity for California.
=01. Our new and upgraded power plants will help improve California?s air=
=20
quality and generate power more efficiently.

We?re hopeful that these hearing focus on facts, fairness and accountabilit=
y.

=01. "Witch hunts," "scape-goating" and sensational headlines won?t solve t=
he=20
problem or end the crisis.