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News Release

FOR IMMEDIATE RELEASE
August 17, 2007
CONTACT:Media and Communications
951.413.3053

City of Moreno Valley statement
regarding ENCO lawsuit

On Tuesday, August 14, 2007, ENCO Utility Services, the contractor hired by the City of Moreno Valley to operate its electric utility, announced that it had filed suit against the City over contractual disagreements.

The allegations in the complaint filed by ENCO are baseless. ENCO filed its lawsuit on the same day that the City and ENCO were engaged in a mediation concerning claims by the City against ENCO, claims that the City has been trying to resolve by negotiation with ENCO since early this year. The City will pursue its claims against ENCO in the pending litigation, and will vigorously contest ENCO's baseless allegations. Neither the litigation nor the differences between the City and ENCO will have any effect upon services to customers of the electric utility. All media inquiries should be directed to the City's legal counsel:

Fred G. Yanney
Fulbright & Jaworski L.L.P.
555 South Flower Street, 41st Floor
Los Angeles, CA 90071
Main Tel: (213) 892-9200