Fitch Affirms Los Angeles Dept Water & Power (California) VRDBs at 'AA-/F1+'.

NEW YORK -- Fitch Ratings affirms the 'AA-/F1+' rating assigned to the $388,500,000 Department of Water and Power of the City of Los Angeles, power system variable-rate demand revenue bonds, 2002 series A (collectively, the bonds), consisting of the following:

--$50,000,000 subseries A-1;

--$50,000,000 subseries A-2;

--$50,000,000 subseries A-3;

--$38,500,000 subseries A-4;

--$50,000,000 subseries A5;

--$50,000,000 subseries A-7;

--$50,000,000 subseries A-8.

The affirmation of the rating is in connection with the substitution of the current standby bond purchase agreement (SBPA) providing liquidity support for the bonds.

The long-term 'AA-' rating on the bonds continues to be based on the rating assigned to the power system bonds issued by the Department of Water and Power of the City of Los Angeles. On the effective date of July 14, 2005, the short-term 'F1+' rating assigned to the bonds will be based on a substitute liquidity facility in the form of a SBPA issued severally by: National Australia Bank, Limited, acting through its New York branch, Lloyds TSB Bank, acting through its New York branch, and Fortis Bank, acting through its Connecticut branch. Each bank is obligated for one-third of the purchase price for the bonds. The SBPA provides for the payment of the principal component of the purchase price of the bonds and up to 34 days of interest calculated at a maximum rate of 12% per annum based on a year of 365 days in the event that remarketing proceeds are insufficient.

The short-term rating expires on July 14, 2008, the stated expiration date as defined in the SBPA, or if such date is extended, on the extended expiration date, or upon any prior termination of the SBPA.

Citigroup serves as the remarketing for the subseries A-3, A-4, and A-7 bonds. Bear, Stearns & Co. Inc. serves as remarketing agent for the subseries A-1 and A-5 bonds. UBS Financial Services Inc. serves as remarketing agent for the subseries A-2 and A-6 bonds. Loop Capital Markets, LLC serves as remarketing agent for the subseries A-8 bonds.

Fitch's rating definitions are available on the agency's public web site, www.fitchratings.com. Published ratings, criteria and methodologies, and relevant policies and procedures are also available from this site, at all times. This document will remain on the public site for seven days.