Tax Review of California Senate Bill No. 1

Attached please find a Tax Review of California Senate Bill No. 1 ("SB 1X").
The Tax Review sets out the practical implication (likely cessation of
electricity sales and curtailment of investment in new generation assets) and
constitutional deficiencies of SB 1X. Please note, SB 1X will not apply to
sales of electricity made pursuant to binding written contracts executed on
or before the date SB 1X is signed into law (if ever).

The California Senate has passed SB 1X. The California Assembly has drafted
their own version, Assembly Bill No. 128 ("AB 128X"), which the Assembly is
presently debating. A Tax Review of AB 128X is also attached.

We will keep you advised regarding the progress of both SB 1X and AB 128X.
Please advise if you have questions and/or comments. Thanks.

Ed Coats - 713.853.6369
Steve Douglas - 713.853.0938
Gavin Russo - 713.853.6296
Matt Gockerman - 713.853.3979