Cinergy, KGen Power Enter into Energy Management Agreement.

CINCINNATI -- Cinergy Corp. (NYSE:CIN) announced today that its marketing and trading affiliates will provide energy management services for generating facilities owned by KGen Power, LLC. Terms of the services agreement were not disclosed.

The agreement between KGen and Cinergy covers 5,325 megawatts of natural gas-fired generation at eight facilities in the Southeast. Cinergy will provide KGen with power management services, such as trading, origination, scheduling, transmission and ancillary services. It will also provide fuel management services, such as natural gas trading, optimization, and hedging for the facilities.

KGen, a subsidiary of the MatlinPatterson Global Opportunities Partners II, acquired the facilities from Duke Energy North America on August 8, 2004. Cinergy reached a three-year energy management agreement with KGen on August 17, 2004.

"We are pleased that another major power provider has chosen Cinergy to supply energy management services," said Michael J. Cyrus, executive vice president of Cinergy and CEO of commercial businesses. "Our physical energy platforms, trading presence and reputation for customer service make us a unique partner for firms such as KGEN that have acquired generating assets."

Cinergy Corp. has a balanced, integrated portfolio consisting of two core businesses: regulated operations and energy merchant. Cinergy's energy merchant business is a Midwest leader in low-cost generation owning 6,300 megawatts of capacity with a profitable balance of stable existing customer portfolios, new customer origination, marketing and trading, and industrial-site cogeneration. Cinergy's regulated delivery operations in Ohio, Indiana, and Kentucky serve 1.5 million electric customers and about 500,000 gas customers. In addition, its Indiana regulated operations own 7,000 megawatts of generation.