HOUSTON & MINNEAPOLIS, March 06, 2001 (BUSINESS WIRE)--- Dynegy Inc. (NYSE:DYN) and NRG Energy, Inc. (NYSE:NRG) today announced that their affiliates, El Segundo Power LLC, Long Beach Generation LLC and Cabrillo I LLC, have entered into an agreement with the California Department of Water Resources (DWR) to provide the state with up to 2,300 megawatts (MW) of energy through 2004.

Under the terms of the agreement which begins today, Dynegy and NRG's affiliates will provide 1,000 MW to DWR for the balance of 2001, and beginning January 1, 2002 will provide up to 2,300 MW. Financial and other terms of the transaction were not disclosed.

"Since last summer, Dynegy and NRG have continued to produce all the power the state has requested. We have worked diligently with the DWR to capture the value of our in-state generation, balanced with California's long-term energy needs," said Steve Bergstrom, president and chief operating officer of Dynegy Inc.

Craig A. Mataczynski, president and chief executive officer of NRG North America, said, "Today's announcement solidifies our commitment to eliminating uncertainty for our respective shareholders and restoring price stability and future reliability to the California electricity market."

Dynegy Inc. is a leading provider of energy and communications solutions to customers in North America, the United Kingdom and Continental Europe. The company's leadership position extends across the entire convergence value chain, from power generation and wholesale and direct commercial and industrial marketing and trading of power, natural gas, coal emission allowances, weather derivatives, and broadband to transportation, gathering and processing of natural gas liquids. For more information on Dynegy visit our web site at www.dynegy.com.

NRG Energy is a leading global energy company primarily engaged in the acquisition, development, construction, ownership and operation of power generation facilities. NRG owns all or a portion of 66 power generation projects and its net ownership interest in these projects is 16,704 MW. The company's operations utilize such diverse fuel sources as natural gas, oil, coal and coal seam methane, biomass, landfill gas, and hydro, as well as refuse-derived fuel.

More information on NRG Energy is available at www.nrgenergy.com.

Certain statements included in this news release are intended as "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. These statements include assumptions, expectations, predictions, intentions or beliefs about future events. Dynegy and NRG caution that actual future results may vary materially from those expressed or implied in any forward-looking statements. Some of the key factors that could cause actual results to vary from those Dynegy and NRG expect include changes in commodity prices for energy or communications products or services; the timing and extent of deregulation of energy markets in the U.S.; general capital market conditions; the effectiveness of Dynegy's and NRG's risk management policies and procedures; the liquidity and competitiveness of wholesale trading markets for energy commodities, including the impact of electronic or online trading in these markets; operational factors affecting Dynegy's and NRG's power generation or Dynegy's midstream natural gas facilities; and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting Dynegy's and NRG's businesses.

More information about the risks and uncertainties relating to these forward-looking statements are found in Dynegy's and NRG's SEC filings, which are available free of charge on the SEC's web site at http://www.sec.gov.

Contact: NRG Energy, Inc., Minneapolis
Media:
Meredith Moore
612/373-8892
or
Dynegy Inc.
John Sousa
713/767-5800
or
Analysts:
Rick Huckle, NRG Energy
612/313-8900
or
Margaret Nollen, Dynegy Inc.
713/507-6466