AES To Acquire Six Power Plants Totaling 1,424 MW From New York State Electric & Gas Corp.

ARLINGTON, Va.--(BUSINESS WIRE)--Aug. 3, 1998--The AES Corp. (NYSE: AES) announced Monday that it won a bid to acquire six coal-fired, electric generating plants from NGE Generation Inc., an affiliate of New York State Electric & Gas Corp. ("NYSEG") for approximately $950 million.

The facilities represent the bulk of NYSEG's coal-fired generation assets and were auctioned as part of NYSEG's implementation of its restructuring plan in accordance with New York's introduction of wholesale and retail competition into the state's electricity generation market.

The six facilities, located in western and west-central New York, are Kintigh (675 MW), Milliken (306 MW), Goudey (126 MW), Greenidge (161 MW), Hickling (85 MW) and Jennison (71 MW).

The facilities include some of the lowest cost generating plants in the New York power pool and, with the exception of some of the smaller units, are expected to run as base-load units in a competitive New York electricity generation market.

Sulfur dioxide scrubbers have already been installed at the largest plants, Kintigh and Milliken. The acquisition is expected to be completed during the first quarter of 1999 and is subject to receipt of various governmental approvals.

John Ruggirello, president of AES Enterprise, stated, "With the Northeast corridor opening to electricity market competition, the NYSEG facilities are important assets to AES because of their ability to generate low-cost power, as well as its strategic fit within our overall portfolio, from both a geographic and fuel perspective.

"Their generation value is further supported by the significant level of interest among energy wholesalers and retailers to secure long-term agreements for the output of these plants."

Dennis Bakke, president and CEO of AES, commented, "We are delighted to make such a major acquisition in the early stages of New York's electricity market restructuring. These plants give us an excellent opportunity to serve the Northeastern U.S. market and complement the substantial growth in non-US assets experienced by AES in the past few years.

"The facilities also will allow AES to take a leadership role in environmental compliance with the installation of NOx reduction equipment and the potential to initiate more innovative air emission offset projects."

AES' business development successes in 1998 include the following:

-- In January, AES won a bid to sell electricity from a 360 MW gas-fired plant in Haripur, Bangladesh.

-- In April, AES Caracoles signed a 40 year concession agreement  for its 230 MW Caracoles project and has taken over the operation of Quebrada de Ullum, an existing 45 MW hydroelectric plant in Argentina.

-- In April, AES' affiliate, Light-Servicos de Electricidade, acquired Eletropaulo Metropolitana, the distribution company serving the city of Sao Paulo, Brazil.

-- In May, AES completed its purchase of three electric generating stations from Southern California Edison.

-- In May, AES acquired 90% of Edelap, an electric distribution company in the province of Buenos Aires, Argentina.

-- In June, AES raised $173 million of non-recourse project financing for the AES M rida III 484 MW gas-fired combined cycle power plant in the City of Merida, Yucatan, Mexico.

-- In June, AES won a bid to sell electricity from a 450 MW gas-fired plant, Meghnaghat, in Bangladesh.

-- In June, AES completed the $350 million acquisition of Edelap, an electric distribution company in the province of Buenos Aires, Argentina.

AES is a leading global power company that currently owns or has an interest in ninety power facilities totaling over 27,000 megawatts in the United States, Canada, Australia, Argentina, Brazil, Dominican Republic, Pakistan, the Netherlands, Hungary, Kazakhstan, Mexico, China and the United Kingdom.

AES also distributes electricity to nearly 13 million customers. In addition to having assets in excess of $9 billion, the Company has more than $5 billion of projects in construction or late stages of development. AES is dedicated to providing electricity worldwide in a socially responsible way.

For more general information visit our web site at www.aesc.com or contact investor relations at [e-mail]. The list aes-pr-announce is an automated mailing list and can be found on the investing page of our web site. Those who subscribe to this list will receive updates when AES issues a press release.

   CONTACT:  AES Corp.
              Kenneth R. Woodcock, 703/522-1315