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IMMEDIATE RELEASE

Release No: 531-02
October 17, 2002

DOD ISSUES NEW GUIDANCE FOR PRIVATIZING UTILITY SYSTEMS

The Department of Defense has released new guidance to assist military services and defense agencies in privatizing nearly 1,600 utility systems located on military installations worldwide. The guidance will significantly enhance DoD efforts to privatize its roughly $50 billion inventory of electric, natural gas, water and sewage utility systems. By incorporating five years of lessons learned and more consistently addressing industry concerns, the guidance will encourage participation by regulated and non-regulated members of the utility industry.

As a key feature the new guidance requires the military services to use a DoD-approved cost analysis model, which will better evaluate the costs and benefits of privatization. The new guidance also supports the DoD goal to upgrade all facilities by fiscal 2010.

The guidance and additional information may be found at http://www.acq.osd.mil/ie/utilities/privatization.htm .