June 15, 2006 Letter announcing comment period on the proposed settlement

Department of Energy Bonneville Power Administration P.O. Box 3621 Portland, Oregon 97208-3621 EXECUTIVE OFFICE June 15, 2006 In reply refer to: LP-7 To Customers, Constituents, Tribes and Other Stakeholders: The Bonneville Power Administration (BPA) and Southern California Edison (SCE) have reached a potential settlement agreement on two of three lawsuits filed against BPA by SCE in the Court of Federal Claims. These claims resulted from a series of complex disputes related to a 20-year power sales and exchange agreement between BPA and SCE, which BPA ultimately terminated in 2001. BPA believes this settlement is in the best interest of BPA ratepayers because it resolves long-standing and potentially expensive litigation at a modest cost. This cost may be offset by payments BPA believes it is owed by a variety of California parties in the ongoing California Refund process. The proposed settlement agreement also helps put the fallout of the West Coast energy crisis behind BPA while protecting Northwest ratepayers and reestablishing a collaborative business relationship with an important business partner in California. Under this proposed settlement agreement, BPA would pay SCE a settlement amount of $28.5 million. While one of the three claims remains unresolved, settlement of two of the claims accounts for approximately $208 million of the roughly $240 million in damages claimed by SCE. ...