Alcoa, TXU Sign LOI on Power Station for Rockdale Smelter.

PITTSBURGH -- Alcoa (NYSE:AA) today announced it has signed a Letter of Intent (LOI) with TXU Energy Company (TXU) regarding the development, construction, ownership, operation and maintenance of the Sandow 5 Generation Station adjacent to Alcoa's Rockdale, Texas aluminum smelter.

The proposed new 564 net megawatt electric generating station would replace three of the four existing generating units at the facility. TXU operates the fourth generating unit at Rockdale as well. Alcoa will enter a power supply agreement with TXU that can supply the Rockdale smelter through 2038.

A definitive agreement is expected to be completed in the first quarter of 2006.

Alcoa is the world's leading producer and manager of primary aluminum, fabricated aluminum and alumina facilities, and is active in all major aspects of the industry. Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation and industrial markets, bringing design, engineering, production and other capabilities of Alcoa's businesses to customers. In addition to aluminum products and components, Alcoa also markets consumer brands including Reynolds Wrap(R) foils and plastic wraps, Alcoa(R) wheels, and Baco(R) household wraps. Among its other businesses are vinyl siding, closures, fastening systems, precision castings, and electrical distribution systems for cars and trucks. The company has 131,000 employees in 43 countries and has been named one of the top three most sustainable corporations in the world at the World Economic Forum in Davos, Switzerland. More information can be found at www.alcoa.com