Governor Davis Announces Principles of Agreement with SCE

----- Forwarded by Jeff Dasovich/NA/Enron on 02/23/2001 04:53 PM -----

Jean Munoz <jmunoz@mcnallytemple.com<
02/23/2001 04:18 PM

To: IEP <jmunoz@mcnallytemple.com<
cc:
Subject: Governor Davis Announces Principles of Agreement with SCE

Jan will be responding to the attached remarks by Governor Davis during the
IEP press call at 3:00 PST. Call in # is 1-800-374-2393, Pass code:
Independent Energy Producers.

Thanks,
Jean

--
Jean Munoz
McNally Temple Associates, Inc.
916-447-8186
916-447-6326 (fx)

PR01:065
FOR IMMEDIATE RELEASE
02/23/2001 02:05 PM

GOVERNOR DAVIS ANNOUNCES PRINCIPLES OF AGREEMENT WITH SOUTHERN CALIFORNIA
EDISON

LOS ANGELES

Governor Gray Davis today announced an agreement in principle with Southern
California Edison to keep the utility solvent.

"This is the framework of a good, balanced deal," said Governor Davis. "It's
not a final deal. There's a lot of work to be done. But we're making
progress.

"This is a complex transaction with a lot of moving parts. With these terms
in place, I'm confident we'll be able to hammer out a final agreement
shortly."

The State has agreed to purchase the utility's transmission lines for an
estimated $2.76 billion (2.3 times estimated book value) and allow Edison to
issue bonds for a substantial portion of its undercollection.

In exchange, Southern California Edison has agreed to:

* Make payments from its parent company, Edison International, to the
utility of approximately $420 million;
* Commit the entire output of the parent company's Sunrise Mission power
project at low "cost-based" rates for 10 years (a value to ratepayers of
$500 million over the next two years);
* Provide cost-based rates from the generating facilities they own for
another 10 years;
* Conservation easements on 20,000 acres of watershed lands for 99 years;
and
* Drop their pending litigation against the Public Utilities Commission
that would have resulted in immediate higher electric rates for consumers if
they had prevailed in court.

Negotiations will continue during the next several days with the utility.

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