GOVERNOR DAVIS ANNOUNCES AGREEMENT WITH SOUTHERN CALIFORNIA EDISON 


LOS ANGELES 

Governor Gray Davis today announced an agreement between the Department of 
Water Resources, Southern California Edison, and Edison International.

"These were tough negotiations, but they've produced a good, balanced deal," 
said Governor Davis, who was joined by Edison International Chairman John 
Bryson at a Los Angeles press conference announcing the agreement. "This is a 
clear example of the good that can come when parties are responsible, 
resolute and remain at the bargaining table. It is the outcome from an 
administration that is dedicated to the taxpayers and ratepayers of 
California and a company that is responsible and public spirited."

"For Edison, the road to recovery will be a long and difficult one," said the 
Governor. "But this is a major step in the right direction."

The agreement includes the three conditions outlined in the Governor's speech 
last week. Edison has agreed to:


* ???Use its generation assets to provide low-cost regulated power to the 
state for 10 years;
* ???Sell their transmission system for $2.76 billion (2.3 times the net book 
value); and
* ???Dismiss lawsuits seeking to significantly drive up electricity rates.

In addition, Edison has agreed to: 

* ???Commit the entire output of the Sunrise facility on a fixed price basis 
for 10 years. Under the agreement, Sunrise must be brought on-line by August 
15th of this year or pay a $2-million penalty;
* ???Grant perpetual conservation easements: 20,600 acres of precious lands 
related to the Big Creek hydroelectric facility and another 825 acres related 
to Eastern Sierra;
* ???Invest $3 billion over five years into capital improvements; and
* ???Edison's parent company will refund no less than $400 million to 
Southern California Edison.

In return, the State will allow Edison to issue bonds for a substantial 
portion of its "net undercollection." The state will buy the net short 
through December 31, 2002. After that time, SCE will be responsible for 
covering the net short.

The MOU also requires the utility to sell its hydroelectric assets to the 
state if the transmission sales does not occur within two years "for reasons 
beyond the parties' control."

The next step is to negotiate specific terms in the 40-page Memorandum of 
Understanding regarding the transmission sale and other agreements. 
Legislative and Public Utilities Commission approval also will be required 
for components of the agreement.