Fitch Rates Sabine River Authority, TX's -TXU Project- Pollution Control Revs 'BBB'.

Business Editors

NEW YORK--(BUSINESS WIRE)--Sept. 29, 2003

Fitch Ratings assigns a 'BBB' rating to Sabine River Authority, TX's pollution control revenue refunding bonds (TXU Energy Company LLC Project) $44,615,000 series 2003B, due 2022. Principal and interest will be paid through a pledge of payments made by TXU Energy Company LLC (TXU Energy). Fitch rates TXU Energy's outstanding senior unsecured debt 'BBB'. The Rating Outlook for TXU Energy is Stable.

The rating is based upon the credit quality of TXU Energy, a non-utility power generation and supply company. The ratings take into consideration TXU Energy's moderate leverage, strong cash flow and a currently low retail churn ratio in Texas. However, the rating also takes into account Fitch's view that high margins currently earned by retail power suppliers in Texas are likely to moderate over time if price competition becomes more prevalent in that market.

TXU's ratings and Stable Outlook takes into account the existence of sufficient liquidity to meet expected company wide refinancing and potential collateral requirements, as well as the recent issuance by Oncor Electric Delivery Co. of $500 million in securitization bonds, with an addition issuance of $800 million next year. The Stable Outlook for TXU also factors in Fitch's view that TXU will not have a material liability for TXU Europe obligations (the obligations of TXU Europe are currently rated 'D' by Fitch).

TXU Energy is an indirect wholly owned subsidiary of TXU Corp and is a non-utility energy company that is engaged in power production, wholesale energy sales, retail energy sales and wholesale trading primarily in the state of Texas.