Schedule 14A for Commonwealth

PREC14A 1 commonwealth.htm Schedule 14A for Commonwealth


SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
                                (Amendment No. )

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[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss.240.14a-l1(c) orss.240.14a-12


                        COMMONWEALTH ENERGY CORPORARTION
                 -----------------------------------------------
                (Name of Registrant As Specified in its Charter)


                          COMMONWEALTH INVESTORS GROUP
    ------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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                                       1

ATTENTION

SAVE YOUR INVESTMENT

Your Vote Counts !

The Commonwealth Investors Group

needs your help to return CEC to the

SHAREHOLDERS

PLEASE CHECK THE LARGE BOX

ON THE ENCLOSED PROXY CARD

You may return this proxy even if you have previously

signed another proxy card. Signing a proxy up to the

day of the meeting is acceptable - The latest one counts

Sign, Date & Mail It TODAY

Why You Have Received This Package

Because Commonwealth is being run for the benefit of "Management" and not the
Shareholders

The Commonwealth Investors Group (CIG), all concerned shareholders just like
you, thoroughly investigated CEC's performance, legal activities and SEC filings.
We've found illegal activities and serious mismanagement of SHAREHOLDER
resources. Please read the summaries below and then the attached topical
analyses where some of Mr. Carter's gross mismanagement is defined. Our strong
recommendation to you is to support the selection of auditors and shareholder
proposals on the CEC proxy you received but withhold your vote for the proposed
Board of Directors. If you agree with CIG after reviewing the materials we've
prepared here, that we need change at the top, please complete and mail the
enclosed proxy card. We're on your side!

SHARE LIQUIDITY: Despite what Carter told you, your shares are not
really tradable. No market exists. Our Board candidates are committed to
immediate share liquidity such as a merger with a public company, which will
provide a stock symbol, market and market makers for us. After 5+ years of empty
management promises to go public, aren't you angry? Please read our Share
Liquidity analysis.

SHARE DILUTION: Carter frequently criticized his predecessor for
authorizing several million options as being dilutive to shareholders. But,
Carter has already awarded millions more and committed another several million
(more than 3 million to himself). 13+ million options (note 9, Form 10K) is a
45% dilution to the approx. 29 million shares outstanding; without your
approval. That's outrageous! Most companies have only a 5% or 10% option
dilution. Are you angry? Read our Share Dilution discussion.

EARNINGS/EXPENSES: Carter brags about how much money he is earning
for us. He took credit for the Calpine contract, the primary source of CEC's
profits. But, it was negotiated by previous management, specifically, Don
Coltrain, one of CIG's Board candidates. But, how much more should we have
earned? Carter squandered a lot of our California profits covering outrageous
legal costs, losses in Pennsylvania, a diversion into energy products, energy
services (Triumph) and high priced consultants. He then rewarded himself with
$2+ million salary and benefits. Are you as angry as we are? Read our analyses.

GROSS MISMANAGEMENT & INTIMIDATION OF SHAREHOLDERS: $15 million
giveaway (1/4 of our cash) to Summit Energy. Your money, but Carter didn't allow
you to vote on this! $10 million to buy back stock and be able to give it to
employees. He didn't allow you to vote! A poison pill provision where you won't
be able to vote on proposed mergers unless Carter and the board approves. You
didn't vote on this either! His combative and autocratic management style has
cost the shareholders a fortune in legal fees. Using your money, 'Carter has
been threatening to sue shareholders who ask too many questions, request
documents or who disagree with him and oppose his actions. His anti-shareholder
"Legacy of Litigation " is costing you millions in legal fees and settlement
costs. Still not angry? Read "Legacies of Secrecy and Litigation".

SECRECY AND VIOLATION OF REGULATORY FILINGS: Mr. Carter filed the
Form 10 two years late to maintain secrecy. The CSG told us he falsified
election results which required court intervention 2 years in a row and also
prevented you from seeing many documents to which you, the owners, should have
access if you want. Insulted? Read our Legacy of Secrecy analysis. He even
illegally withheld documents from a Board member, which caused an expensive
lawsuit. The Appeals Court said that was illegal and directed Carter to allow
shareholders access to all company information they are entitled to see. Angry?
Read the enclosed Appeals Court decision press release.

These are only highlights; we've got a lot more! The press and radio are
comparing CEC to Enron. If you're tired of Ian Carter's shareholder abuses and
excuses and if you're concerned about your investment please read the enclosed
information and complete and return the proxy card now. Please don't delay; no
stamp needed; sign, date and mail TODAY!

CONTRACT W1TH SHAREHOLDERS

The members of the Commonwealth Investors Group are insulted by Mr. Carter's
refusal to allow you to vote on the legally submitted shareholder proposals
shown in this proxy. He has spent many thousands of your dollars and delayed the
annual meeting twice to prevent you from voting on these improvements to CEC's
corporate governance. Even on the two proposals that the SEC required CEC to
publish, Carter would not allow you to see the rebuttals to "non-unanimous"
Board of Directors Positions as crafted by Carter's expensive lawyers. We are
also insulted by the continuing dilution of your equity in the Company without a
vote of the shareholders and are disgusted with the continuing waste and
mismanagement of CEC's resources. We have as a primary objective the return of
power to the shareholders and will support candidates for CEC's Board of
Directors who agree with this update of last year's Shareholder Group contract
to use their best efforts to implement the promises below in a fiscally prompt
and responsible manner; WE WILL:

o Pay a dividend to all shareholders and develop a long-term dividend
plan.

o Investigate share liquidity alternatives and implement the one that
provides the best price and quickest entry for publicly trading shares
on a legitimate exchange.

o Re-negotiate the excessively generous executive employment contracts.

o Rescind the money losing Summit Energy Ventures agreement and seek the
return of all Commonwealth Energy Shareholder funds.

o Conduct the annual meetings on Saturday as previous management did to
accommodate more working shareholders.

o Update CEC's bylaws to close loopholes that allow management to violate
shareholder rights.

o Allow shareholders to vote on all proposals that may dilute their
shareholdings.

o Settle costly pending litigation quickly, in a fair and equitable
manner.

o Seek opportunities to invest in power generation and expand into retail
natural gas.

o Re-evaluate the true profit potential of the costly TRIUMPH system.

o Develop a long-range strategic business plan; making use of industry
consultants and advisors to ensure the plan creates the most value for
shareholders.

o Disclose to shareholders all information regarding the operations of
CEC, within the boundaries of the recently enacted SEC's Fair
Disclosure Rule.

o Create a Corporate Governance Committee of the Board to bring ethics
to CEC.

COMMONWEALTH SHAREHOLDERS

SAVE YOUR INVESTMENT

TAKE YOUR COMPANY BACK

Please take the time to read the enclosed information.
Only informed shareholders can make the necessary decisions to protect their money!

Dear fellow shareholder;

Another year has gone by and we still haven't received a dividend nor have we
gone public, despite the promises of Fred Bloom who was in charge for 2 years
and Ian Carter who has now been in charge as Board Chairman and CEO for the past
3 years.

Last year a group of concerned shareholders carefully analyzed the SEC Form 10
and Carter's employment contract to find previously secret information that
seriously impacted the value of our stock. They warned us about many concerns
but highlighted the fact that legitimate shareholder requests for information
were being stonewalled. Ignoring those legitimate requests and the unexplained
secrecy raised their suspicions about Mr. Carter's motives. It was quite
apparent that he was attempting to hide negative information while diverting
attention by claiming "successes" in various shareholder newsletters. That
continues today! In fact, CEC must have been so "successful" that the board gave
Carter even more enormous unearned bonuses and stock options. Well, if we're so
successful why aren't the shareholders getting something back. The highlighted
issues last year were:

MANAGEMENT'S HIGH PRICED EMPLOYMENT AGREEMENTS

$25 MILLION COMMITTED TO SUMMIT ENERGY VENTURES

Now, we learn that millions of dollars of our money is still being spent on
Carter's compensation, outside lawyers and legal settlement costs. Not only
approx. $7 million for the Bloom settlement but millions more for suits by
former employees, directors, shareholders and vendors. Carter keeps blaming
Bloom but we understand Bloom gave the company 1.2 million shares to settle
options claims by some former employees. However, Mr. Carter took those shares
but refused to issue them. Now those employees sued CEC and were awarded $2.7
million of your money. Read the enclosed KFWB news article dubbing CEC as
"Orange County's Enron". Carter even continues to spend your money to file court
appeals after he loses. Two shareholders won small claims actions for a few
hundred dollars that should have been settled without any court action. Carter
appealed and won in superior court on a technicality but cost the shareholders
thousands of dollars in employee time and outside legal costs to save those
hundreds. That's why we're highlighting another issue, which is seriously
eroding your investment:

Carter's Legacy of Litigation

We also know that CEC got a black eye when a 3 judge Appeals Court ruled against
Carter and in favor of shareholders. The Court ruled in August that Carter
illegally withheld documents from director Saline and those documents can be
shared with the shareholders. Our thanks to director Saline for spending his own
money to stem Carter's court proven illegal activities and secrecy. We wonder
what that cost shareholders in CEC's disruption of business and legal bills; at
least hundreds of thousands. Other shareholders cave in when Carter threatens to
break them financially by using unlimited shareholder funds to file appeals and
drag issues out for years in court. It's past the time to limit Carter's ability
to use shareholder money for benefit of his ego.

Mr. Saline, Mr. Doak and Mr. Biswell from last years' CSG sued Carter for
fraudulent handling of last year's election results. With several insiders doing
the counting it took 2 months for Mr. Carter to release the election results to
us after CEC's rancorous annual meeting. He used those 2 months with a voted out
board member to hold secret meetings to pass more anti-shareholder proposals.
The CSG claims they had almost one third of the votes cast after only a three
week (late) proxy campaign and they claimed Mr. Biswell had enough votes to be
elected along with Mr. Saline. We don't know the results of the suit other than
what was in the June Form 10 filing with the SEC. We can't find out any details
of the settlement agreement because once again, Carter makes anything
distasteful to him a secret; like details of the Bloom and other secret
settlement agreements. We suspect Carter paid the CSG legal bills which were
expected to run well over $100,000. We do know the CSG claim of 7 vs. 5
directors at last years election was implemented by the Court. We demand the
truth about last year's election and have an outside, independent election
official this year. So, here's another issue affecting the shareholders:

Carter's Legacy of Secrecy From Shareholders

Because of many of the issues described above and others uncovered in the past
year several shareholders legally requested that the Board implement 7 specific
bylaw and policy changes or the issues would be put up for a vote of the
shareholders. The Secretary initially failed to provide the issues to the board
and later the Board chose not to implement the changes. Then, CEC delayed this
meeting, spent many more $ thousands of your money on outside lawyers, violated
the SEC response rules, violated our legitimate shareholder rights and refused
to put all but 2 of the proposals on the ballot. The 7 proposed changes, are
detailed elsewhere in this proxy solicitation and if you choose to provide your
proxy to the CIG as we're requesting with this solicitation, along with
shareholder oriented directors, we will vote to implement those proposals.

Ladies and Gentlemen; The CIG members are very discouraged by the delays and
outright contempt of shareholders shown by Ian Carter and John Barthrop when
legitimate requests for action or information are made. We expect you're
disgusted as well. We need your vote to add shareholder-oriented directors to
CEC's Board of Directors. Legitimate opportunities for going public have been
wasted in the name of waiting for an opportune time. Now, several small
shareholders needing the money and wanting to sell their stock are being
directed to Carter supporter David Barnes and friends who are reportedly paying
less than $1 per share. Most of us believe the stock is worth at least $3.00 per
share based on the latest financial statements but after a 5 year investment, $1
seems to be what is apparently the "public market" value. That's the real bottom
line on Mr. Carter's performance; what can you sell your stock for now that he's
been in charge for 3 years?, what is your 5-year investment worth? $1? Is that
what Carter's supporters claim to be his outstanding performance? Is that why
the board of directors gave Carter another bonus of $495,000 of your money??

Share Liquidity

The issue of most concern to the majority of our shareholders is the broken
promises by the former CEO & Mr. Carter for the 5+ year wait for our stock
to go public, with no relief in sight. Mr. Carter recently sent the shareholders
a newsletter with an article entitled "Listing of Commonwealth's Common Stock".
He said "it is not now advisable to list our shares at this time". Basically,
he's stating that because of "market conditions" he can't tell us when our
shares will be publicly listed. Previous to that it was because we had to get
out of our regulatory and legal messes. Prior to that it was because of our
former Chairman. Prior to that it was lack of audited financial statements. When
will the excuses stop? One of the real reasons public investors won't be
interested in a CEC IPO is that they want a company that has a defined long term
strategic plan that shows growth over a 5 or 10 year period. It is inconceivable
but true that no formal approved CEC strategic plan exists. Promises, but no
plan! So, there's no practical hope for a near term IPO. That plus the cost and
time for an IPO are reasons why the investors group suggests a merger.

There are some shareholders that "must" liquidate their holdings for various
personal reasons. Today, their only option is to find a buyer on their own or
get referred by CEC to a confidant of Mr. Carter, David Barnes, who is
offering less than $1 a share. Most of us received a letter in March, 2001 which
illustrated that Barnes received confidential information from Carter. We need
to get the new Board to investigate that relationship to see if there's not an
attempt to get control of CEC. If we were listed, our share price would be at
least $2 or $3 based on our assets, retained earnings and shareholders equity.
We could do that almost immediately with a reverse merger. We don't have to wait
another year or more until the markets turn and investment bankers will happily
take millions from us to do an IPO. That will immediately elevate the fair
market value up from today's value. Read the CIG contract with shareholders,
which commits our candidates to go public via "best pricing and quickest entry"
to a legitimate trading exchange. The rest of us who want to hold on in hopes of
a better price can do so after we're a publicly traded company. We all like to
hear the stories and promises from Ian Carter but there is no better indicator
of CEC's value and real current management performance than a public market
evaluation.

Share Dilution

On November 28th, 2000 the CEC shareholders approved the Board's
recommendation for a 7 million share incentive options plan to legitimize prior
(at that time 6,639,825) option grants and provide several hundred thousand more
for future issuance. That represented approximately a 20% dilution to then
outstanding shares (approx. 34 million). That was high by industry standards but
not totally unreasonable. It was a reduction from the originally proposed 8
million shares. Now we read in the Form 10 that there have been 13,206,325
options granted by the Board. What shareholder authority did they have to make
this generous giveaway of our equity? We never voted to increase the approved 7
million share authority! That's a dilution by approximately 45% of CEC's
currently outstanding shares, our equity. As a benchmark, Microsoft, one of the
most generous of corporate options grantors has approx. 800 million options out
of approx. 5 billion shares, an approx. 16% dilution. Mr. Carter and his
compensation committee have increased the dilution of our equity from a
shareholder approved 20% to almost 45% without asking us. How foolish do they
think we are? We MUST overturn their self-serving grab of our equity and make
them live within the 7 million we authorized. Mr. Carter is personally in line
to grab up to 4.2 million options (ref. Carter's Employment Agreement summary
enclosed; par. 3.2b, 3.2c & 3.3)

Carter's Legacies of Secrecy and Litigation

You wouldn't know it from a cursory look at our financial statements but legal
expenses are by far one of the largest controllable, variable expenses at CEC.
Most legal costs are buried on our statements as part of our General and
Administrative expenses. Internally, CEC has a legal staff of 4 or 5 persons but
most legal issues seem to be handled by outside law firms. We've been told that
we have used more than 25 different outside law firms for each of the past 2
years with payments to outside lawyers of $3+ million each year and settlement
costs even higher; the Form 10 noted damages paid to Bloom of $4,790,000 plus a
stock repurchase of $2,400,000 but doesn't detail other legal settlement costs.
If there are really 25+ law firms working cases, our potential liabilities must
be enormous. What's the real story? We must insist on a full accounting of all
that is being spent. Carter claims he doesn't deserve the "legacy of litigation"
title because he's initiated only a few of the lawsuits; that all the rest are
being brought against him and CEC. Now that's the arrogant attitude that
probably causes most of the lawsuits. He keeps telling us the suits have no
merit but we've learned otherwise. We're being sued by a group of former
employees for a reported $10 million because Carter wouldn't issue them 1.2
million shares of stock that Fred Bloom personally gave them from his own
holdings. CEC has the audacity to say in the Form 10 K that the adverse outcome
of this ($10 million) would not materially impact CEC's financial position!?

As reported by the CSG in last year's proxy, the courts directed Carter to
provide Director Saline various CEC documents, which he wanted in order to share
information with stockholders. Also, recently, in light of Enron, the California
Appeals Court issued a stinging published decision against Carter's attempts at
secrecy. Read the press release on the next page. More Recently, the Board
attempted to reappoint Mr. Gates to the Board after the shareholders voted him
out 2 years in a row. The court also overturned that. The issue of Carter trying
to keep secret from shareholders any information that puts him in a bad light
was also tested in another case where the California Appeals Court, in an
anti-SLAPP ruling, dismissed Carter's countersuit against a former officer who
was suing CEC for compensation. The court, in CEC vs Chappell, No.G026344
(Jan.15, 2002), found that the suit arose from Chappell's unfavorable story
about the company that he sent to shareholders (just like this proxy). The court
dismissed Carter's suit in order to protect Chappell's free speech activities,
namely distributing news articles to CEC's shareholders. In the most recent
anti-SLAPP ruling against Carter, on Dec.11th, 2002, U.S. District Judge P.
Anderson awarded director Saline attorney fees and costs following dismissal of
a frivolous fraud and deceit cause of action brought by Carter, No.CV02-02442PA.
Carter uses frivolous appeals and these kinds of expensive counter-suits, paid
for by shareholders, to try to delay decisions, raise costs and intimidate
shareholders and former employees from challenging his allegedly illegal
activities.

In the year 2000 election Carter refused to recognize Mr. Saline's election to
the Board and falsified the results by notifying the shareholders that Mr. Gates
was reelected. That was overturned by court action. In the same election Carter
falsified the voting results by announcing that the vote to reduce the Board
size from 7 to 5 had passed. Factually, it got only 14,898,333 votes out of more
than 32,000,000 shares outstanding at the time; not the 50% majority it needed.
Also in documenting that falsification in the bylaws he created a provision that
"the number of Directors may be changed...by approval of the Board of
Directors". Our bylaw, Art VII, sect 2, reserves the right to change the number
of directors, to the shareholders only. Changing that bylaw without shareholder
approval is illegal and is a blatant attempt to grab power away from the
shareholders. In the 2001 election, the results were also challenged by the CSG.
There was some kind of settlement agreement that added 2 new Directors up to 7
as claimed by the CSG at our last election (Carter illegally reduced it to 5)
but we can't get any details. More secrecy from shareholders!

PRESS RELEASE
FOR IMMEDIATE DISTRIBUTION

California Court of Appeals Acts Decisively to Prevent Future "Enrons"

Santa Ana, CA - July 30, 2002

Making it harder for corporate managers to keep secrets from investors,
yesterday the California Court of Appeals ruled that, absent extraordinary
circumstances, corporations may not stop "dissident" directors from disclosing
confidential information to shareholders. "The effect of this ruling is that
California corporations will find it tougher to hide questionable business
dealings - especially those lining management's pockets -from shareholders if a
director chooses to blow the whistle," says David A. Robinson, Esq. of the
Enterprise Counsel Group.

The plaintiff in the lawsuit, Joseph Saline, is a director of Commonwealth
Energy Corporation, a publicly owned energy corporation headquartered in Tustin,
California. After being elected as a director in November 2000, Saline
discovered evidence of questionable business practices by Commonwealth's
entrenched management. When Saline tried to inspect the corporation's books to
get the full story prior to an upcoming shareholders meeting, the corporation
balked. Saline then filed a lawsuit to compel the inspection.

In a pre-Enron/Worldcom ruling, Judge Randall Wi1kinson of the Orange County
Superior Court allowed Saline to inspect some records, but refused to
acknowledge or enforce Saline's statutory right to inspect all Commonwealth's
records. Judge Wilkinson also imposed severe restraints on Saline's ability to
communicate with shareholders. In particular, to safeguard Commonwealth's
"privacy" rights, Judge Wilkinson "prohibited [Saline] from disclosing or
discussing the corporate documents with anyone other than [Saline's own
attorneys] and [Commonwealth's other] board members."

In its post-Enron/Worldcom decision, the Court of Appeals reversed Judge
Wilkinson on both counts. Yesterday's ruling re-affirms that, absent
extraordinary circumstances, corporate directors in California have an absolute
right to inspect all corporate records. Yesterday's ruling also found that the
"gag order" prohibiting Saline from freely communicating with Commonwealth's
shareholders amounted to a prior restraint on free speech in violation of the
United States and California Constitutions.

"This is a major victory for California investors who fear their investments are
being squandered away, or worse, by incompetent or corrupt management," said
Robinson, Saline's counsel. "This decision should give comfort to the average
California investor that a corporation may no longer hide its shady business
practices until the bubble bursts, as happened with Enron, WorldCom, etc. This,
together with the new Federal law signed by President Bush yesterday, are
important steps towards a new era of openness in corporate accounting and
business practices."

The Court of Appeal's decision may be accessed via the Internet at
http://www.courtinfo.ca.gov/opinions/documents/GO29761.PDF.

Waste and Mismanagement of Shareholder Resources

Last year the CSG did an extensive analysis of Mr. Carter's previously secret
employment agreement. They warned us about the "egregious" terms in 4 pages of
details. We've reprinted one page, the summary "MATRIX" on the next page for
your consideration. We were all shocked to find we were paying Ian Carter more
than $300,000 in salary plus $100,000 bonus. That was nearly double what was paid to
the previous CEO. He also gave himself millions of stock options for
questionable achievements. Now, we just gave him another approx. $5,000/month
raise.

CSG was particularly concerned that the Board gave Carter the $100,000 bonus
even though he didn't meet the terms of his original contract. They changed the
terms after it was apparent that Carter wouldn't otherwise qualify for a bonus.
Now, in the new 10K we find that the board gave him an additional bonus of
$495,000; when you add in his salary and other benefits that's more than
$1,000,000 for CY'01. And oh, by the way, if you read the footnotes, that
"excludes $1,080,000 of stock based compensation charged to operations related
to a grant of 300,000 performance-based stock options granted". What
Performance? Wake up fellow shareholders, that's $2,000,000 last year against
CEC's books at the same time Carter said CEC couldn't afford to give the
shareholders a dividend. Of course not, he was grabbing it for himself! In the
new 10K filing Carter says again, he won't give us a dividend because he needs
to "retain earnings to finance future operations, expansion and capital
investment". What arrogance! The Board of Directors must be replaced for that $2
million giveaway of shareholder resources.

CIG also found in the SEC filings another apparent giveaway. Last year we were
told that the Board committed up to $25 million and actually gave $15 million of
that in cash to Summit Partners without a Shareholder vote. They further agreed
to pay Summit's manager, Steven Strasser's expenses out of that $15 million plus
give him a generous 3% fee to manage that money for us. Note: the best mutual
funds in the U.S. charge only 1% to 1.5%. The 3% fee should amount to
$450,000/year as approved by the Board. Now we read in the 10Q's that we paid
$200k in July '01, $450k in Aug '01, $350k in Feb '02 and apparently another
$350k in Aug '02. Looks like we paid $1.35 million to Strasser to hold our $15
million for 18 months; that's 6% folks, not 3%! Does Strasser need the money
more than the shareholders? What's Mr. Carter's excuse for this giveaway of
shareholder funds? Carter originally planned to take a personal, 20% Limited
Partner share, of the Summit profits.

Triumph ($2.0+mil/year) and other high cost consultants? We haven't been able to
find consultant costs separately identified in the Form 10 but Item 13 notes
that SYMCAS (consultants for the Triumph billing system) fees were more than
$2,000,000. Prior years were reportedly even higher. CEC even capitalized other
Symcas costs, Also, at the last several annual meetings Mr. Carter mentioned and
even introduced several legislative and energy professional consultants. We'd
like to know the total cost of consultants and a consultant cost benefit
analysis for a company our size. Also, at those annual meetings and in several
newsletters Mr. Carter claimed Triumph would become a cornerstone of our future
profits with contracts imminent. In Apri12001, nearly 2 years ago, to justify
these expenditures, Mr .Carter told us he expected to sell "several Triumph
installations within the next three months."Where are the contracts? Where are
the profits from our investment?

Last year the Shareholders Group told us that Mr. Carter purchased 25,000 shares
of our stock on Feb. 27d1, 1998 for $1.00 per share. That was nearly 2 months
after the Jan 1, 1998 Private Placement memorandum raised the price and everyone
else was paying $2.50. Where is the $49,000 difference he owes the shareholders?
He should not be able to vote those shares till he pays for them. Why hasn't the
Board reclaimed that money?

Ladies and Gentlemen; If you just count the Legal, Compensation, Summit and
Triumph excesses alone, we're talking about millions and millions of dollars of
waste and mismanagement. After all our research, the members of CIG know which
shareholder oriented directors to elect and ask for your help; your vote counts!
Let's return CEC to the shareholders. URGENT! Please fill out and mail the
enclosed proxy today! No postage needed!

Carter's Employment Agreement

This is only a summary of Ian Carter's super-generous 17 page (small print) Employment Contract

Please review this to see if you agree that it must be changed
---------- ---------------------- ------------------------------------------ ------------------------------------------
Ref. Par.# Section Detail Comments
---------- ---------------------- ------------------------------------------ ------------------------------------------
1 Term Jan. 1, 2000-Jan. 31, 2005 Five year contract
---------- ---------------------- ------------------------------------------ ------------------------------------------
2 Job Description Chairman and Chief Executive Officer
---------- ---------------------- ------------------------------------------ ------------------------------------------
(2,000,000+ over 5 years)
3.1 Base Salary $325,000 - 2nd 12 months (current period) Actual; $346,000 with Cost Of Living
Adjust
$375,000 - 3rd 12 months (after Jan. 2002) Probably $420,000+ with COLA
$425,000 - 4th 12 months Probably $500,000+ with COLA
$500,000 - 5th 12 months Probably $600,000 with COLA
(this is more than 2x our former
CEO's salary)
---------- ---------------------- ------------------------------------------ ------------------------------------------
($500,000++ over 5 years)
3.2 Bonus $1 for each new customer: $50k 1st yr, Employee didn't qualify but got bonus
$75 2nd yr, $100k for remaining term anyway
Addendum: $100,000 plus extra from Comp.
Committee Meet unstated business plan goals
---------- ---------------------- ------------------------------------------ ------------------------------------------
3.2a Bonus for change of 8 times annual salary + taxes Approx. $6,000,000 million in 5th
control of company year
Addendum: Adds valuation of options @ 2x
stock value Only lawyers can figure this one
---------- ---------------------- ------------------------------------------ ------------------------------------------
3.2b Options if IPO occurs 300,000 @ $2.50 May be sold at IPO-value @ $10 =
$5,250,000
---------- ---------------------- ------------------------------------------ ------------------------------------------
3.2c Added options bonus 100,000 for $100 million in There is a 2x share value cash bonus @ IPO
when IPO occurs capitalization, 25,000 added for each $11 With a $10 IPO price the value is
million cap. - max of 2,000,000 options @ $35,000,000
$2.50
Addendum: Replaces above provisions with:
Completion of Audit options -500,000
Settle with DOC options -250,000
Settle with CPUC options -500,000
Complete liquidity event
options -750,000
---------- ---------------------- ------------------------------------------ ------------------------------------------
3.3 Contract signing bonus 300,000 plus 100,000 per year = 700,000 Value @ $10 is approx $14,000,000
total
---------- ---------------------- ------------------------------------------ ------------------------------------------
3.3 Customer growth bonus 300,000 options each year for 4 These options are considered salary
years-1,2000,000 total Value @ $10 is approx. $24,000,000
Addendum: Changed from customer growth to
exceeding unquantified business plan
goals by 10%
---------- ---------------------- ------------------------------------------ ------------------------------------------
Value - $25,000 over 5 years
6.5 Insurance-Term life $1,500,000 for 10 years whether employed Highly irregular. Most CEO contracts
or not, Beneficiary is his family provide only "key man" policies with
Company as beneficiary
---------- ---------------------- ------------------------------------------ ------------------------------------------
3.6 Vacation 6 weeks - 30 business days $250,000+ over 5 years
Irregular. Most execs get max of 4
weeks
---------- ---------------------- ------------------------------------------ ------------------------------------------
3.7 Auto Allowance $1,3000 per month - paid to Auto dealer $78,000 over 5 years
Plus: Auto telephone, home fax and answer Irregular. Most allowances are paid
service to employee $$$???
---------- ---------------------- ------------------------------------------ ------------------------------------------
7.3 Separation - if 8 times annual salary - plus taxes If fired, approx. $5,000,000 within
terminated 30 days
---------- ---------------------- ------------------------------------------ ------------------------------------------
Value depends on # of options @
term.=$Mills.
7.4 Stock repurchase If agreement terminated employee may These are "earned" so even if company
demand repurchase of all stock and folds, he is a creditor before any
options at current aggregate price value shareholders
---------- ---------------------- ------------------------------------------ ------------------------------------------
7.5 Term not renewed
If this 5 year contract is not renewed he Value - $1,000,000 over 10 years
still gets $100,000 per year for 10 more
years
---------- ---------------------- ------------------------------------------ ------------------------------------------
6.1 Key man insurance Up to $2 million, plus Directors, Standard
officers, errors, omission, etc
---------- ---------------------- ------------------------------------------ ------------------------------------------
3.4 Medical insurance PPO @ $2650+ per month premium Value - $160,000 over 5 years
Plus: All benefits available to other These in addition to the specific
employees/officers contract benefits
---------- ---------------------- ------------------------------------------ ------------------------------------------
3.5 Travel First Class Hotel & Travel Value - Depends on travel ???
---------- ---------------------- ------------------------------------------ ------------------------------------------
3.5 Expense Account Virtually unlimited Value - ????
---------- ---------------------- ------------------------------------------ ------------------------------------------

You add up the totals - we can't count that high -his options alone,
depending on clauses, triggers, double triggers, conditions subsequent and
precedent, double subsequent and precedent, etc. could represent more than 50%
of CEC and will keep many lawyers employed - Ian's "Legacy of Litigation"

Proposals Submitted by Shareholders
For Approval At The 2002/2003 CEC Annual Meeting

Fellow shareholders:

Many of CEC's current bylaws are outdated and allow management too much leeway
in how they run the company, how they spend our funds and how they can dilute
shareholder equity. Seven shareholders submitted proposals in accordance with
CEC and SEC rules.

We were dumbstruck by the insulting actions taken against us. Not only did CEC
clearly violate SEC Reg 14a8(f) by ignoring our initial submittal but they also
spent thousands of dollars of our own shareholder money to hire outside legal
counsel to try to find legal technicalities to exclude our proposals. If they
are truly legally insufficient then our current bylaws are also. If needed,
these CIG proposals could be modified to comply when you, the shareholders, vote
for them. Mr. Carter didn't want to give you the opportunity to vote. He
believes only he knows what's best for us!

That's the main reason for this proxy solicitation by the CIG, to get these on
the ballot to let you vote and let you know once again, as the CSG did last
year, in loud clear terms, about Mr. Carter's anti-shareholder attitude. We
believe that these proposals, although perhaps not perfect, are a vast
improvement of the current bylaws in terms of "shareholder" rights. Please read
them and give us your proxy.

1) Shareholders' Proposed Resolution

It is the fiduciary responsibility of the Board to increase shareholder value,
not the personal wealth of key managers. The Board shall adopt a compensation
policy that ties cash bonuses for key managers to achievement of challenging
performance goals developed by the Compensation Committee and approved by the
full Board at least 9 months in advance of proposed awards. As disclosed in the
Form 10, our key executives have been amply rewarded with handsome base pay,
options and other perks. The Board shall set a minimum 10% annual increase in
net income over the prior year as the "baseline" for the award of any cash bonus
at all. Any proposed cash bonus pool for managers, as determined by the
Compensation Committee, shall be matched with dividends for shareholders; $1 for
management and at least $10 for shareholders dividends. In no case shall the
bonus for a single employee exceed 1/3 of the management pool.

Shareholder submittal by:
L.W. Putnam
Seal Beach, Cal.

2) Shareholders' Proposed Amendment To The By-laws

At the present time, the Commonwealth Bylaws do not provide for specific
compensation of Directors. Also, at the present time, according to records
provided by CEC, several outside directors are not shareholders and are only
awarded stock options. As a result they're not on shareholder mailing lists and
it's my opinion that they have only minimal incentive to support issues that
benefit shareholders.

The following shareholder proposal revises Article I of the bylaws by replacing
section 14 and adding section 18. These changes insure that non-employee
(outside) directors are incentivized to serve, are treated fairly and equally
and insure that their decisions are not influenced by pressure and /or
intimidation related to fear of losing compensation or assignment to committees
of Commonwealth's Board of Directors. The new section 14 formally authorizes
existing compensation practices and adds or modifies others. Upon approval of
these amendments by the shareholders, the provisions of section 14 & 18
shall be retroactive to the 2000 annual election for currently serving
directors.

Section 14. Compensation of Directors
Directors, other than employee directors, are to be compensated equally in three
forms; cash, common stock and qualified stock options.

a) Cash: For each year of service, non-employee directors receive an annual
retainer of $25,000, payable quarterly (Jan., April, July & Sept.) for any
quarter or partial quarter from the time of their election. In addition, they
receive $1,000 for each regular or special board meeting or annual stockholders
meeting attended in person and $500 for each committee meeting attended or for
each board meeting attended by telephone or videoconference. Committee
chairpersons receive an additional $200 per month for those services. Directors
are also entitled to reasonable expense reimbursement.

b) Stock: For each year of service non-employee directors receive a grant of
5,000 shares of CEC's common stock immediately following election.

c) Stock Options: For each year of service, non-employee directors receive
incentive (qualified) options to purchase 50,000 shares of common stock. The
options exercise price is set at fair market value, vest immediately upon award
and are exercisable following the next annual election for up to 10 years
following date of award.

Section 18. Indemnification of Non-employee Directors

Directors who are not employees are to be indemnified by the corporation and/or
appropriate insurance to the fullest extent permitted by law so that they will
be free from undue concern about personal liability in connection with
performance of their fiduciary responsibilities as representatives of the
shareholders. All expenses (including attorneys' fees, judgments, fines and
amounts paid in settlement) actually and reasonably incurred in connection with
any legal proceedings against or by the corporation shall be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding on behalf of such director.

Shareholder submittal by: Wayne Moseley
Sherman Oaks, Cal.

3) Shareholders' Proposed Amendment To The By-laws

The following shareholder proposal replaces Article I, section 15 of the bylaws.
At the present time Board of Director committee assignments and chairmanships
are doled out by the COB and may or may not be approved by the entire board.
Currently, assignments may be subject to abuse because there are no rules
insuring objectivity. It is my opinion that these proposed changes will insure
that non-employee (outside) directors are treated fairly and equally and insure
that their decisions are not influenced by pressure and /or intimidation related
to fear of losing assignment to committees of Commonwealth's Board of Directors.
They also incorporate the addition of a Corporate Governance Committee to stem
what CIG identifies as the current Legacy of Secrecy and Litigation which is
costly and disruptive as well as to insure fair elections are conducted and that
honesty and ethics are employed throughout the corporation.

Section 15. Committees
Committees of the Board may be established by resolution passed by a majority of
the whole Board. Committees shall have such powers of the Board as may be
expressly delegated to them by resolution of the whole Board except those powers
expressly made non-delegable by Sec. 311 or those committee decisions which must
be presented for a vote of the whole board if 1 or more directors so request.

Standing committees will include as a minimum, Compensation (includes human
resources), Corporate Governance (includes legal, election/nomination, ethics,
etc.) and Audit.

Board committees are to consist of a minimum of 3 directors, at least 2 of which
must be non-employee directors. The Chairman of the Board may recommend that
certain directors serve on designated committees. However, directors may
volunteer for specific committee assignments and chairmanships; board seniority
shall be the tiebreaker when there is more than one candidate for a
chairmanship. A chairperson must relinquish the chairmanship to a volunteer if
that chairperson serves as chairperson of one or more other committees.
Chairmanships must rotate annually if there are other volunteer candidates for a
position. Employee directors may not serve on the compensation committee or as
committee chairpersons.

Shareholder submittal by:
Chuck Ruzicka
San Diego, Cal.

4) Shareholders' Proposed Amendment To The By-laws

Directors should not be allowed to change bylaws expressly approved by the
shareholders. A minor change to article VII will limit that power. The following
shareholder proposal replaces Article VII, section 2 of the By-laws.

Section 2. Powers of Directors
Subject to the right of shareholders to adopt, amend or repeal By-laws, as
provided in Section 1 of this Article VII, and the limitations of Sec. 204 (a)
(5) and Sec. 212, the Board of Directors may adopt, amend or repeal any of these
By-laws other than a By-law or amendment thereof changing the authorized number
of Directors or any By-law or amendment thereof specifically added or changed by
a vote of shareholders in accordance with Section I hereof.

Shareholder submittal by:
Michael Garren
Palm Springs, Cal.

5) Shareholders' Proposed Amendment To The By-laws

It is our opinion that in the past, when shareholder meetings were held on
Saturdays, more shareholders were able to attend the annual meeting. This
shareholder proposal replaces Article III, Section 2 of the By-laws and provides
for a set time and meeting date for the annual meeting so that shareholders may
plan attendance in advance.

Section 2. Annual Meetings

The annual meetings of the shareholders shall be held, each year, at 10:00 A.M.
on the second Saturday of November at a hotel or other appropriate meeting
facility in the Orange County, California area. At the annual meeting, the
shareholders shall receive a report from management on the state of affairs of
the Corporation, shall elect a Board of Directors and shall transact such other
business as may properly be brought before the meeting.

At the specific request of any director, the Board of Directors shall order an
independent (non-employee) inspector of elections be provided for each annual
meeting election.

Shareholder submittal by:
Maurice Cook
North Hollywood, Cal.
and
Virginia Ann Harvey
Grass Valley, Cal.

6) Shareholders' Proposed Amendment To The By-laws

At the 2001 annual CEC stockholders meeting, the organizers declined to use
Roberts Rules of Order, the standard meeting format used in prior years and by
practically every company and every public meeting in the civilized world. Also,
there was no meeting agenda provided ahead of time. This resulted in confusion,
grumbling and shouting at the meeting. There is also significant concern about
the lateness and accuracy of official minutes of meetings of the corporation.

The following shareholder proposal amends Article II, Section 9 of the By-laws
by adding as the last paragraph:

The Secretary of the Corporation or a designated representative shall:

a) Conduct the annual and other meetings in accordance with Roberts Rules of
Order

b) Provide a written preliminary meeting agenda along with the proxy materials
for the annual shareholders meeting

c) Provide a written or emailed agenda to directors at least one-week prior to
regularly scheduled board of directors meetings.

d) Record via audio or video media the proceedings of shareholder and directors
meetings and retain such media for review by directors and shareholders for a
minimum of 3 years.

e) Summarize proceedings of shareholder and directors meetings in the form of
written minutes to be retained and available for review by shareholders in
accordance with applicable laws and regulations.

f) Provide drafts of shareholder and directors meeting minutes to directors for
review and comment within 5 working days of such meetings

Shareholder submittal by: Louis Vocke
La Quinta, Cal.

7) Shareholders' Proposed Amendment To The By-laws

The present Management has thwarted the vote of the shareholders on the number
of authorized Board members for the past 2 elections. Both years' management
proposals, first to decrease and then to increase and provide a variable number
of directors were defeated by the voters. The number of Directors was set at a
maximum of seven in the By-laws prior to the 2000 and 2001 elections. Any
changes had to be voted by the shareholders and only the shareholders. A
current, illegal amendment even attempts to take these shareholder rights away
and give them to the Board. This shareholder proposal directs management to
return to a fixed number of 7 directors by reinstating the wording of the year
1999/2000 By-laws, Article I, Section 2, as follows:

Section 2. Number and Qualification

The authorized number of Directors of the corporation shall be no less than the
minimum number of shareholders and no more than seven (7). This number may be
changed by amendment to the Articles of Incorporation or by an amendment to this
Section 2, Article I, of these By-laws, adopted by the vote or written assent of
the Shareholders entitled to exercise majority voting power as provided in
Sec.212.

Shareholder submittal by: Hideto Kakiki
Granada Hills, Cal.

Board of Directors Candidates

Attention Shareholders: The Commonwealth Investors Group has
identified a slate of 7 candidates for the Board of Directors for 2002 who we
feel will best represent the interests of SHAREHOLDERS. Three new (non-current)
director candidates are listed below and brief resumes provided. CIG will also
support re-election of Mr. Saline, Judge Sullivan and certain other current
directors who we determine are the most shareholder oriented. If you believe as
we do that we need to replace the current Board majority with members who will
focus on shareholder value instead of management's self-interests as described
in this letter, please sign, date and mail the enclosed proxy card TODAY for
voting at the annual meeting. No postage stamp is necessary.

Commonwealth Investors Group Candidates for the Board of Directors:

1. Claire Simonelli (Finance and Energy Professional)
2. Don Coltrain (Shareholder, Energy Professional and Former CEC Director)
3. Wayne Moseley (Shareholder Advocate, Former Stockbroker)

Brief Resumes:

Claire Simonelli: BA, Skidmore College, MBA, Financial Management, Pace
University, Executive Recruiter; Formerly, Director of Business Development,
Trigen Energy Corp., part of $40 Billion global infrastructure and energy
company. Lead developer for cogeneration partnership projects including sourcing
clients, negotiating energy sales and power purchase agreements, secure gas
supplies, arranging financing, etc. Prior; financing for Finnish-based power
developer Wartsila Development Co. for Wartsila diesel power plants throughout
the world. Prior; Vice President, Project Finance, Bayerische Vereinsbank for
power developers, oil and gas, telecom and mining companies in North and South
America. Prior; Manager, Project Financing, Praxair, Union Carbide Corp.;
structured joint ventures with multinational companies including 30MW
cogeneration plant.

Don Coltrain: BA, Economics, Cal State Long Beach. Mr. Coltrain is a
former CEC Director and member of the Advisory Board. As senior Vice President
of CEC he secured the Calpine Contract which has resulted in essentially all of
CEC's profits to date. Employed with Edison for 25 years. Negotiated 90+ power
contracts in Western U.S. & Mexico including joint power generation and
transmission entitlements, power exchange and displacement agreements, power
purchase and sales, etc. Employed for 8 years as Manager of Contracts and
Services for Imperial Irrigation District. He has testified before the Federal
Energy Regulatory Commission and California Public Utilities Commission.

Wayne Moseley: L.A City College. Retired. Allied member, New York Stock
Exchange. Former stockbroker, investment banker and partner in New York Stock
Exchange member firm; Roberts, Scott and Company. Shareholder Advocate; founder
of Commonwealth Investors Group (CIG); researched, investigated and formulated
the Shareholder Proposals and shareholder abuse issues summarized in these proxy
materials.

PROXY
Commonwealth Investors Group

The undersigned shareholder(s) of Commonwealth Energy Corporation, a California
corporation, appoints Wayne Moseley, William Putnam and Michael Garren, any one
acting alone, as proxy and attorney-in-fact, with full power of substitution, to
represent the undersigned at the FY 2002 annual meeting of shareholders to be
held on January 21, 2003 at 10:00 a.m. at the Grove of Anaheim, 2200 East
Katella Avenue, Anaheim, California 92806 and at any adjournment, postponement
or continuance of that meeting.

The proxy holder shall be entitled to vote all shares of Common Stock and/or
Convertible Preferred stock that the undersigned would be entitled to vote if
personally present, for or against any proposal, including the election of
members of the Board of Directors, and any and all matters that may come before
the meeting, in accordance with the instructions noted on the proxy card.

SHAREHOLDER: YOU HAVE RECEIVED THE OFFICIAL COMPANY BALLOT IN AN EARLIER
MAILING. THE INVESTOR GROUP (CIG) RECOMMENDS THAT IF YOU CHOOSE TO RETURN THAT
PROXY INSTEAD OF THE GREEN ONE ENCLOSED, PLEASE VOTE TO WITHHOLD AUTHORITY FOR
THE BOARD NOMINEES LISTED EXCEPT FOR JOSEPH SALINE AND EUGENE SULLIVAN; TO
APPROVE THE SHAREHOLDER PROPOSALS AND TO APPROVE THE SELECTION OF ERNST AND
YOUNG AS AUDITORS. IF YOU HAVE ALREADY SUBMITTED THAT PROXY AND WISH TO CHANGE
YOUR VOTE, YOU MAY SUBMIT A NEW PROXY WITH A LATER DATE OR ATTEND THE ANNUAL
MEETING OF SHAREHOLDERS AND VOTE IN PERSON. THE COMPANY WILL SEND YOU A NEW
PROXY IF YOU CONTACT INVESTOR RELATIONS, (800) 962-4655:

HOWEVER, IF YOU AGREE WITH THE RECOMMENDATIONS OF THE SHAREHOLDERS GROUP AS
NOTED IN THIS MAILING AND DO NOT WISH TO REQUEST A NEW PROXY FROM THE COMPANY
AND WISH TO HAVE THE INVESTORS GROUP SELECT THE 7 BEST QUALIFIED "SHAREHOLDER
ORIENTED" CANDIDATES INCLUDING THE THREE WHOSE NAMES AND RESUMES ARE INCLUDED
WITH THIS PROXY SOLICITATION, PLEASE COMPLETE AND RETURN THE GREEN PROXY CARD
ENCLOSED. YOU WILL THEN BE DEEMED TO HAVE GIVEN THE INVESTOR GROUP PROXY HOLDER
COMPLETE DISCRETION IN VOTING WITH RESPECT TO ANY AND ALL BUSINESS ISSUES
PRESENTED TO THE MEETING INCLUDING MATTERS LISTED ON THE COMPANY PROXY AND TO
CUMULATIVELY VOTE YOUR SHARES FOR SOME OR ALL OF THE CANDIDATES FOR THE SEVEN
OPEN POSITIONS, THIS PROXY IS FOR ALL SHARES HELD BY THE SHAREHOLDER.

PROXY STATEMENT

The Annual Meeting of Shareholders of Commonwealth Energy Corporation will be
held on Tuesday, January 21, 2003 at 10:00 A.M. at the Grove of Anaheim, 2200
East Katella Avenue, Anaheim, California 92806. This proxy statement will be
mailed to shareholders on or about December 30, 2002. Your proxy may be revoked
at any time by executing a new proxy with a later date. New proxy forms may be
obtained from the registrant, Commonwealth Energy Corp., or from Commonwealth
Investors Group (CIG) at 3846 Beverly Ridge Drive, Sherman Oaks, CA 91423. The
registrant has indicated in its proxy materials dated December 23, 2002 that
shareholders of record, meaning those who own shares, as of November 22, 2002
may cast votes at the annual meeting.

Commonwealth Investors Group (CIG) in opposition to, not on behalf of,
Commonwealth's Board of Directors is making this proxy solicitation.

Solicitations may be made by mail, facsimile and telephone. Funds expended to
date are approximately $5,000 and are expected to total $10,000. All costs will
be borne by CIG and reimbursement may be sought from the registrant with
approval of its Board.
According to the registrant's proxy material dated December 23, 2002, 27,162,032
shares of common stock and 609,000 shares of Series A preferred Stock are
eligible to be voted at the Jan. 21, 2003 Annual Meeting. Each share may cast
one vote for each available board seat, unless cumulative voting is in effect.
Cumulative voting may be invoked by any shareholder by notifying the Chair at
the Annual Meeting of his or her intent to cumulatively vote. Cumulative voting
simply means that you may cast as many votes as you have shares to vote
multiplied by the number of Board seats to be voted on; seven (7) in the case of
the current CEC meeting. You may cast all of your votes for any one nominee or
any combination of nominees. You need not evenly spread your votes over each
nominee you choose to vote for.

CIG is soliciting your proxy authority for discretionary authority to accumulate
votes for shareholder-oriented candidates. The 7 nominees with the highest
number of votes will be elected to serve. Elected Directors will hold office
until the election of successors, at the next annual meeting. If you choose not
to grant this authority and choose to vote the Company proxy instead, CIG
suggests that you vote for the shareholder proposals but withhold votes for all
company director nominees except for Saline and Sullivan.

The director nominees of CIG are not currently compensated by the registrant.

Following are the participants of CIG, none of whom are being compensated:

Name & Address Occupation Securities Held
Wayne Moseley, 3846 Beverly Ridge Drive Retired 20,000 common
Sherman Oaks, CA 91423

Michael Garren, 1880 So. Mesa Dr. Business Owner 170,000 common
Palm Springs, CA 92264

Louis Vocke, 53525 Avinita Madero Business Owner 160,000 common
La Quinta, CA 92535

L. William Putnarn, P.O.Box 2728 Retired 100,000 common
Seal Beach, CA 90740

Hideto Kakiki, 11051 Enfield Ave. Retired 90,000 common
Granada Hills, CA 91344

The Commonwealth Investors Group (not the Commonwealth Energy Board of Directors) requests that you
complete, sign, date and mail this proxy card as soon as possible. This card authorizes the holder to vote in your
name for Board candidates and such other business as may properly be presented to the meeting or any continuance
or postponement thereof, even though you may have already submitted an earlier proxy.

We want you to mark the first large box only, so that we may vote your shares on all issues

o I authorize the holder of this proxy to cumulatively vote all my shares for
what the holder judges to be in the best interests of the shareholders.

o Withhold authority

If you don't want the holder to cumulate votes for a particular candidate, cross out the name of the person(s) for
whom you do not want the votes counted. You may write in and cross out candidates from the CEC proxy.

E1ection of Directors: Claire Simonelli Don Coltrain Wayne Moseley (write in)
--------------------

Signature: :2"d Signature (if required)
----------------------------------------------- -----------------------
Name(s) Printed: # of shares (if known)
------------------------------------------ -----------------------
Title (if Trustee or Corp.) Date signed
------------------------------- --------------------------------
Note: Completing this proxy but failing to check any boxes will give the holder complete voting discretion for all
shares held

Please sign exactly as your name appears on your stock certificate. When shares are held by two persons, both
should sign. When signing as attorney, executor, administrator, trustee or guardian, please provide title as such.
If corporation or partnership use authorized signature. Signer hereby revokes all proxies previously given for the
FY2002 Commonwealth Annual meeting.