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----- Forwarded by Jeff Dasovich/NA/Enron on 02/16/2001 09:16 PM -----
Jean Munoz <jmunoz@mcnallytemple.com< 02/16/2001 04:56 PM To: IEP <jmunoz@mcnallytemple.com< cc: Subject: Governor Davis Announces Recovery Plan for State's Utilities Below is a copy of Governor's press release. Jan will be responding during the IEP media tele-conference today at 4pm PST. Call in number 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: 057 FOR IMMEDIATE RELEASE 02/16/2001 2:20 pm GOVERNOR DAVIS ANNOUNCES RECOVERY PLAN FOR STATE'S UTILITIES SACRAMENTO Governor Gray Davis today unveiled the framework of a recovery plan for the California's investor-owned utilities that includes the purchase of their power lines and targeted revenue from the existing rate structure to help pay their back debt. "Today we have begun serious negotiations with the utilities on a balanced recovery plan," said Governor Davis. "This is a balanced business transaction. It provides real benefits of real value to consumers and allows the utilities to get back on their feet." Elements of the plan include: * State purchase of the transmission grid owned by the state's three investor-owned utilities; * Benefits to ratepayers and taxpayers including: 1. A significant contribution by the parent companies to their utility subsidiaries to satisfy their creditors and return to financial viability; 2. The extension of cost-based rates from the utilities generating facilities from five to 10 years and a ban on their sale; 3. Conservation easements on utility-owned land in prime watershed areas; and 4. Dismissal of all pending litigation. The Governor's plan directs the Public Utilities Commission to establish a "dedicated rate component" from the existing rate structure (not a new charge on consumer bills). This would allow the utilities to make payments to their creditors, including banks, generators, and renewable energy producers. Utilities would be allowed to sell revenue bonds secured by the dedicated rate component. Governor Davis said he is working closely with the legislative leadership on legislative components necessary to carry out negotiations. Governor Davis also noted that he sent a letter to President George W. Bush thanking him for his order today to expedite the review and licensing of new power generation facilities in California. "I am extremely gratified that President Bush has acted to put the federal government on the same path as I have in California to cut red tape and get new power plants on line," said the Governor. ###
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