California Public Utilities Commission

107 S. Broadway, Rm. 5109, Los Angeles CA 90012; www.cpuc.ca.gov

NEWS RELEASE

CONTACT: Kyle DeVine December 16, 1997 CPUC - 578

213-897-4225 (A.96-11-046)

CPUC APPROVES EDISON PLANT SALE

The California Public Utilities Commission today approved the Southern California Edison Company (Edison) application to sell 10 gas-fired electric generating plants located throughout Southern California. The plant sale is a part of restructuring of the electric generating market in California, which will create a level playing field for new companies to compete in the generating market.

Edison will sell Alamitos, Huntington Beach and Redondo Beach plants to AES Corporation for $781 million. Houston Industrial Power Generation, Inc. will buy the Coolwater plant for $186 million, and Ellwood, Etiwanda, and Mandalay plants for $51million. El Segundo plant will be sold to NRG/Destec for $87.75 million - subject to the possible right of first refusal for Chevron U.S.A., which would require further Commission review. Thermo bid $9.5 million for the Highgrove and San Bernardino Plants.

The winning bids totaled $1.115 billion, about 2.65 times greater than the net book value of the ten plants. Net proceeds of the sale will be used to reduce stranded costs which otherwise may have been collected through the Competition Transition Charge (CTC) which all customers will pay next year as part of rates.

Initially, Edison proposed to sell all twelve of its gas-fired plants and is still negotiating the remaining two, the Ormond Beach and Long Beach Plants.

Of the twelve plants Edison has up for sale, six must run to assure adequate supplies of electricity in the region. They are Alamitos, El Segundo, Etiwanda, Huntington Beach, Mandalay and Redondo Beach. The companies which bought them are financially sound and have experience in operating plants. The companies will enter into operating agreements with the Independent System Operator (ISO) to ensure they are available when needed. The ISO is expected to control the electric grid in California beginning January 1. -###-