Governor Gray Davis

June 15, 2000

Dear President Lynch and Chairman Kahn:

I am advised that electricity power plant and transmission maintenance problems caused interruptions in the supply of electricity to consumers throughout the San Francisco Bay Area. Compounded by severe hot weather, these electrical supply and voltage support problems experienced by residential, commercial and industrial customers resulted in inconvenience and economic losses throughout the region.

To reduce the drain on energy during this episode, I directed State agencies and facilities in the Bay Area immediately to institute energy management practices aimed at reducing energy use. The safety and reliability, affordability and fairness of California's energy system are of paramount concern and cannot be compromised. Ensuring a reliable electric system is central to the health and safety of every Californian as well as California's continued economic growth. Existing generation capacity simply must be available to use when Californians need the power.

I am directing you to exercise your respective authority to investigate the circumstances, including the reasons for the generation maintenance and transmission problems and related impact on electricity prices and advise me on actions that can be taken to avoid recurrence of this situation. Report back to me by August 1 your findings and recommendations for solving them.

Sincerely,

GRAY DAVIS

State Capitol _ Sacramento _ California _ 95814 _ (916) 445-2841