Holders of 2012 Debentures should read thesematerials carefully because they contain important information, including theterms and conditions of the Offer.The Offer is not being made to holders of 2012 Debentures in any jurisdictionin which the making or acceptance thereof would not be in compliance with thesecurities or other laws of such jurisdiction.This press release includes forward-looking statements that are subject torisks and uncertainties. All other trademarks, trade namesor service marks used or mentioned herein belong to their respective owners. Spalding Communications, LLCDan Spalding, orCHEN PRMeghan Rozanski, Copyright Business Wire 2009. NEW YORK–(Business Wire)–Fitch Ratings affirms Lodi, California Electric System’s outstandingCertificates of Participation (COPS) ‘BBB+’ rating; the Outlook remainsPositive. Lodi was upgraded to ‘BBB+’ from ‘BBB’ with a Positive Outlook in July of 2008.This upgrade was largely based on improved financial performance due to theimplementation of various policies instituted by new management. These policiesincluded a monthly fuel cost adjustment pass-through, a goal to build cashreserves, and a defined PILOT policy.

The underpinnings of the ‘BBB+’ rating include electric rates that are belowthose of Pacific Gas & Electric, but that are higher than area municipalities’rates; a diverse power resource mix, with a renewable component (27%) thatalready exceeds the State’s renewable requirements of 20% by 2020; and arelatively stable customer base that is somewhat concentrated. Lodi estimatesthat the top 10 customers account for 30% of kilowatt hour (kWh) sales but alower share of revenues at 24%. Partially mitigating this concern, the largestsingle customer (General Mills) accounted for 7% of kWh sales and only 4.6% ofrevenues in fiscal 2009. Additional credit characteristics include: –Improving financial metrics – including debt service coverage of over 2 times(x) and a growing cash position; –Continued improvement in the electric utility’s open power position, from a65% position in 2006 to a projected 10% position in 2010; –Weak demographics – The city’s median household income is below the state andcounty averages. The unemployment rate in the city, as of May 2009, was 11.2%,closely tracking the state average of 11.4%. While high, this rate is below SanJoaquin County’s rate of 15%. The Positive Outlook reflects Fitch’s expectation that should debt servicecoverage remain within the category average, while sustaining the cash position,there is the potential for a rating upgrade upon the stability of the areaeconomy.

Adherence to the recently adopted transfer policy remains an importantfactor in the rating. Additionally, the assumption is that the Lodi EnergyCenter (a 250 megawatt [MW] combined cycle natural gas plant, in which Lodi willhave a 30 MW share) will be completed on time (second quarter of 2012) andwithin budget. The utility does not own any generation assets, but rather purchases powerthrough its membership in the Northern California Power Agency (NCPA), from theWestern Area Power Administration (WAPA) and from various short and long-termpower purchase contracts. Lodi is one of the ‘Ten NCPA Pool Members,’ wherebyeach member provides its resources to NCPA to pool operations, and NCPAdispatches all resources to provide total requirements to the Ten NCPA PoolMembers, at the lowest reasonable cost. In addition, Lodi is a member of theTransmission Agency of Northern California (TANC), and participates in theCalifornia-Oregon Transmission Program (COTP). Lodi’s electric utility provides retail service to approximately 25,500customers in and around the city of Lodi.

The city encompasses approximately 14square miles, with a population estimated at 63,395 and is located in the SanJoaquin Valley of California, approximately 35 miles south of Sacramento. Therevenue stream is generated by residential, commercial and industrial customers,contributing 39%, 40% and 21% of revenues, respectively. In 2008, energy salestotaled 450,408 mWh, reflecting a 2% decline over the prior year. Load forecastsfor the next few years have been reduced downward, by approximately 4%.