Sue Mara
Enron Corp.
Tel: (415) 782-7802
Fax:(415) 782-7854
----- Forwarded by Susan J Mara/NA/Enron on 04/09/2001 04:09 PM -----

	Jean Munoz <jmunoz@mcnallytemple.com>
	04/09/2001 04:48 PM
		 
		 To: "'Andy Brown (E-mail)'" <ABB@eslawfirm.com>, "'B Brown Andy (E-mail)'" 
<andybrwn@earthlink.net>, "'Baker Carolyn (E-mail)'" 
<cabaker@duke-energy.com>, "'Bob Escalante (E-mail)'" 
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"'Greg Blue (E-mail)'" <gtbl@dynegy.com>, "'Jan Smutny-Jones (E-mail)'" 
<smutny@iepa.com>, "'Jeff Dasovich (E-mail)'" <Jeff.Dasovich@enron.com>, 
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<paula_soos@ogden-energy.com>, "'Randy Hickok (E-mail)'" 
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<megan.beiser@edelman.com>, <deborah.fiorito@dynegy.com>, <lchurch@epsa.org>, 
Katie Kaplan <kaplan@iepa.com>, <tcwillia@duke-energy.com>, 
<rwhyde@duke-energy.com>, <tmcmorrow@manatt.com>
		 cc: 
		 Subject: Governor to announce deal with Edison

The Governor is currently holding a press conference to announce deal with 
Edison.   We will keep you posted with details.  IEP will be responding.

Thanks,
Jean


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

________________
Calif Gov. To Announce Deal With SoCal Ed-Spokesman     
Updated: Monday, April 9, 2001 05:37 PM;ET    

;
NEW YORK (Dow Jones)--California Gov. Gray Davis will announce a final deal 
with Edison International (EIX, news, msgs) unit Southern California Edison 
to buy the utility's power lines, Davis' spokesman said Monday afternoon. 

Monday's deal will include four elements of Davis' speech delivered live 
statewide Thursday, said Davis spokesman Steve Maviglio. 


Davis spoke about an alternative rate hike plan Thursday to the one ordered 
by state regulators two weeks ago. Although Davis' rate increase is lower 
than the overal 27% increase ordered by the California Public Utilities 
Commission, the governor's plan allows the utility to collect a portion of 
the rate increase that will be used to restructure $5 billion in 
undercollected power costs. 


Davis said in his five-minute statewide address Thursday that if the state 
were to buy SoCal Ed's transmission lines, the utility would have to agree to 
drop its federal lawsuit against the PUC, where it sought to recoup the 
billions of dollars in undercollected power costs from ratepayers retroactive 
to August 2000, and sell the state power from its hydroelectric plants at 
cost for 10 years. 

Davis announced an agreement in principle with SoCal Ed seven weeks ago to 
buy the utility's transmission lines for $2.76 billion and the two have 
negotiated during that time to reach a final agreement. 

A spokesman at the utility would not comment. 

A day after Davis' five-minute address, PG&E Corp. (PCG, news, msgs) Pacific 
Gas & Electric filed for Chapter 11 bankruptcy protection because 
negotiations with the state over a similar deal were "going nowhere." 

Harvey Rosenfield, executive director of consumer group Foundation for 
Taxpayer and Consumer Rights in Santa Monica, said Davis' announcement is a 
massive "bailout" for SoCal Ed. 

Rosenfield said he will push for a ballot initiative next year to undo the 
state's six-year-old deregulation debacle. 

-By Jason Leopold; Dow Jones Newswires; 201-938-5905; 
jason.leopold@dowjonews.com 



Monday April 9, 6:06 pm Eastern Time

Calif. Gov. Davis, SoCal Edison to announce deal

(Adds background,

LOS ANGELES, April 9 (Reuters) - California Governor Gray Davis and Southern 
California Edison have reached an agreement after a weekend of harried talks 
aimed at a deal that would provide state money to the cash-strapped utility 
in exchange for its transmission lines, a spokesman for the governor said.
ADVERTISEMENT

Davis and John Bryson, the chairman of Southern California Edison parent 
Edison International (NYSE:EIX - news), scheduled a news conference from 3 
p.m. PDT (6 p.n. EDT) in Los Angeles to discuss the agreement, the governor's 
office said. No further details were immediately available.

The announcement came as bankruptcy proceedings began for the state's largest 
utility, Pacific Gas & Electric, a unit of PG&E Corp. (NYSE:PCG - news), 
which on Friday sought protection for creditors after declaring that it had 
been unable to reach an accord with Davis.

Shares in Edison International closed up 8 percent on Monday on expectations 
that the two sides were close to reaching a deal under which the state would 
reportedly pay billions for the company's transmission lines.

Southern California Edison power transmission grid is a 12,000-mile (19,200 
km) web of high voltage lines covering much of the southern region of the 
state.

The lines carry electricity from power plants to substations, where the 
voltage is reduced to a level that can be moved safely into neighborhood 
distribution lines to homes and businesses.

The utility's 88,000-miles (105,600 km) of distribution lines serve about 11 
million Southern Californians.

The utility has carried the lines at a book value of $1.2 billion. Under a 
the terms of a preliminary deal, the state had proposed buying the lines for 
$2.76 billion, or 2.3 times the book value.