Press Release


OFFICE OF THE GOVERNOR



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PR01:456
FOR IMMEDIATE RELEASE
10/02/2001



GOVERNOR MAKES STATEMENT ON PUBLIC UTILITIES COMMISSION ACTIONS 10/2/2001


SACRAMENTO

Governor Gray Davis today made the following statement regarding PUC
actions:

"I applaud the mutual efforts of the California Public Utilities Commission
and Southern California Edison. Their settlement has protected the public
interest, and will allow the State's second largest utility to return to
financial health. I am pleased to hear the PUC's assurance that this can be
accomplished without a rate hike.

"In light of the agreement between the PUC and Edison, there is no need for
the Legislature to return next week for a special session. Therefore, I am
rescinding my call for the Third Extraordinary Session.

"In January, the Legislature passed AB 1X which authorized the State to
purchase power since our two largest utilities were brought to their
financial knees by runaway wholesale energy costs. Despite long odds, the
State was able to keep the lights on this summer and has spent approximately
$6.1 billion from the General Fund and $5 billion from the DWR Power Fund
doing so. AB 1X envisioned the sale of revenue bonds to repay the General
Fund with interest.

"The Public Utilities Commission's refusal today to adopt the rate agreement
necessary for the bonds to be sold was an irresponsible act. It creates
uncertainty about our ability to sell the bonds necessary to repay the
General Fund when California can least afford additional fiscal uncertainty.
In fact, preliminary financial estimates show that State revenues are $1.1
billion short of budget projections.