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CITING GOVERNMENT INACTION, SOLAR ENERGY FIRM FILES BANKRUPTCY

 CITING GOVERNMENT INACTION, SOLAR ENERGY FIRM FILES BANKRUPTCY
 LOS ANGELES, Nov. 27 /PRNewswire/ -- Blaming government indecision for limiting the potential of the U.S. solar energy industry, Luz International Limited, the developer of the world's largest solar power plants, announced that it had filed bankruptcy papers in a Los Angeles federal court this week, seeking to liquidate the parent firm and two of its subsidiaries (Luz Construction, Inc. and Luz Development and Finance, Inc.). Luz had been struggling since early this year to overcome financial problems which it stated were rooted in the on-again, off-again government support for solar energy.
 Speaking at a press conference to announce the bankruptcy filings, Luz Chairman Newton D. Becker assigned much of the blame to government inaction in Sacramento and Washington. "A little over 10 years ago, Luz set out to build commercial solar power plants, to produce reliable electricity from the sun and sell it to utilities," Becker stated. "Today there are nine privately financed power plants producing 354 megawatts of electricity from the sun, enough to meet the residential needs of over half a million Southern Californians. As businessmen and engineers, we proved it could be done, but lawmakers and bureaucrats in Sacramento and Washington kept changing their minds about the importance of solar energy."
 Becker distributed materials detailing a decade of "on-again, off-again" support for solar energy development by the state and federal governments during the period that Luz was pioneering the development of utility-scale Solar Electric Generating Systems (SEGS).
 Becker pointed out that two additional Luz subsidiaries responsible for running the nine operating plants and managing the partnerships that own those units (Luz Engineering Corporation and Luz Partnership Management) had filed for protection under Chapter 11 of the bankruptcy code. "Our nine existing solar plants continue to produce electricity for the Southern California Edison grid, and will continue doing so for decades to come," added Becker. "The real tragedy is that, given a level playing field, Luz could have continued reducing the cost of solar electricity even further with future projects under construction and on the drawing board."
 Luz was founded in 1980, on the heels of the Iranian oil embargo and extensive government debate about ways to reduce the nation's addiction to foreign oil. Its first power plant in California's Mojave Desert was completed in 1984, generating solar electricity for approximately 25 cents per kilowatt hour. Since then, Luz has placed eight additional plants at three locations in the desert, cutting the cost of solar electricity by two thirds, to around 8 cents and reducing oil imports by 2.2 million barrels annually.
 Luz was in the middle of construction on another 80 megawatt unit, SEGS X, when legislation in the California state legislature to extend the property tax exemption for solar energy projects stalled in the governor's office. Although Gov. Wilson eventually signed the measure, Luz lost its construction financing, and was unable to replace it in time to beat the scheduled expiration of the federal solar energy tax credits on Dec. 31.
 "Why does solar energy have to live on a year-to-year basis when the oil, gas, coal and nuclear industries have permanent tax incentives as well as large federal research budgets?" asked Becker. "It just doesn't make sense, particularly when you look at the environmental advantages that solar energy offers."
 Becker stated that the existing projects alone would displace over 66 million barrels of imported oil over their lifetime. In addition, the current plants displace more than 750,000 pounds of nitrous oxides (a prime contributor of smog) and 1.2 Billion pounds of carbon dioxide (the primary greenhouse gas) each year.
 Pointing to the massive investments of U.S. trading partners in emerging energy companies, Becker asked, "Do you really think that this type of thing would happen in Japan or Europe? Or wouldn't they support a strategic industry consistently until the time it could compete effectively in the world market?"
 -0- 11/27/91
 /CONTACT: Bill Bresee or Tim Sadler of Luz International, 213-208-7444/ CO: Luz International Limited ST: California IN: OIL SU: BCY


MK -- DC017 -- 7800 11/27/91 14:40 EST
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Date:Nov 27, 1991
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