NRG Energy, Inc. Signs Agreements to Sell California Cogeneration Facilities.

Business Editors

MINNEAPOLIS--(BUSINESS WIRE)--Sept. 19, 2002

NRG Energy, Inc., a wholly owned subsidiary of Xcel Energy (NYSE:XEL), today announced it has reached agreements to sell its interests in two California cogeneration power plants, Crockett Cogeneration Project and Mt. Poso Cogeneration Company.

From the sale of its 57.7 percent interest in Crockett Cogen to an undisclosed buyer, NRG will realize net cash proceeds of approximately $72 million and will reduce balance sheet debt and credit obligations by approximately $242 million. The transaction will result in an approximate $4 million book loss and is expected to close by November 2002.

NRG will realize approximately $10 million in net cash proceeds from the sale of its 39.5 percent interest in Mt. Poso to Red Hawk Energy, LLC. Red Hawk currently owns an approximately 23.5 percent interest in the plant. The transaction is expected to close by October 2002 and will result in an approximate $300,000 book loss, net of advisor fees. CIBC World Markets acted as the exclusive financial advisor to NRG in the Mt. Poso transaction.

"The sale of our interest in these two plants demonstrates that the market recognizes the appropriate value of our assets," said Richard C. Kelly, NRG's president and chief operating officer. "Although we anticipate a small book loss from the sale of Crockett Cogen and Mt. Poso, we are moving significant debt off of NRG's balance sheet."

Located 20 miles northeast of San Francisco, Crockett Cogen is a 240-megawatt natural gas-fueled cogeneration power plant. Mt. Poso is a 49.5-megawatt coal-fueled cogeneration power plant located 20 miles north of Bakersfield, Calif. Both Crockett Cogen and Mt. Poso meet "qualifying facility" requirements under the Public Utility Regulatory Policies Act of 1978 by supplying steam to neighboring manufacturers.

Crockett Cogen and Mt. Poso are part of a group of unannounced, smaller noncore assets that NRG is marketing. NRG announced earlier this year that, as part of a plan to strengthen its balance sheet, the company planned to market its international portfolio of assets as well as facilities in the South Central part of the United States.

To date, NRG has sold its ownership interests in four foreign plants or plant operating companies: Csepel in Budapest, Hungary; ECK Generating in Kladno, Czech Republic; Collinsville Power Station in Collinsville, Australia; and Energy Developments Limited, an Australian energy company with power plant projects in various locations. NRG also has sold its interest in Entrade, an electricity trading business in the Czech Republic.

NRG Energy, a wholly owned and unregulated subsidiary of Xcel Energy, develops and operates power generating facilities. NRG's operations include competitive energy production and cogeneration facilities, thermal energy production and energy resource recovery facilities.

Xcel Energy is a major U.S. electricity and natural gas company with regulated operations in 12 Western and Midwestern states. The company provides a comprehensive portfolio of energy-related products and services to 3.2 million electricity customers and 1.7 million natural gas customers through its regulated operating companies. In terms of customers, it is the fourth-largest combination natural gas and electricity company in the U.S. Company headquarters are located in Minneapolis.

Certain statements included in this news release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements above include, but are not limited to, expected earnings and cash proceeds from the sale of assets, the closing on the announced transactions as well as other planned sales, and increasing liquidity. Although NRG believes that its expectations are reasonable, it can give no assurance that these expectations will prove to have been correct. Factors that could cause NRG's actual results to differ materially from those contemplated in the forward-looking statements above include, among others, changes in government regulation or the implementation of government regulations, which could result in NRG's failure to obtain regulatory approvals required to close project sales, and the satisfaction of other conditions required to close the respective transactions, and factors affecting other planned sales include, among others, the availability or cost of capital, changes in interest rates and market perceptions of the independent power generation industry, NRG or any of its subsidiaries.

NRG undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The foregoing review of factors that could cause NRG's actual results to differ materially from those contemplated in the forward-looking statements included in this news release should not be construed as exhaustive. For more information regarding risks and uncertainties that may affect NRG's future results, review NRG's filings with the Securities and Exchange Commission.