Three years ago, Reliant Energy was a Texas-based,Texas-centered utility, but that’s no longer true. On Friday, theHouston-based utility improved its presence in the Mid-Atlanticregion, completing a $2.1 billion acquisition from Sithe Energiesof 21 power plants in Pennsylvania, New Jersey and Maryland (PJM).The facilities together total 4,276 MW of net generating capacityand bring Reliant’s domestic generating capacity to 23,000 MW.

Sixteen of the plants are located in Pennsylvania, four in NewJersey and one is in Maryland — purchases that come at anopportune time for the acquisitive Texas company. Last week heatwave in the Mid-Atlantic region, pushing up power and gas pricesbecause of tightening supplies.

“This acquisition significantly advances our strategy of owningpower generation assets in key regions of the country and using ourcommercial skills in energy trading and marketing to optimize thevalue of the assets,” said Steve Letbetter, Reliant Energy CEO.”[I]t will have a positive impact on our earnings and was a keycomponent in allowing us to raise our earnings growth expectationsfor the year to 10% to 12%.”

All of the acquired power plants are fueled by a combination ofcoal at 50%; oil and natural gas, 46%; and hydro, at 4%, and theyrepresent a combination of baseload, peaking and intermediategeneration.

“The PJM market is a high-priority commercial region for us, andwe are pleased to achieve a very substantial power generationpresence,” said Joe Bob Perkins, president and chief operatingofficer of Reliant Energy Wholesale Group. “This acquisition is akey addition to our strategic portfolio of assets and marketpositions.”

Reliant only began acquiring other utilities a little more thantwo years ago, and since that time, it has grown its unregulatedpower generation business to 9,000 MW in seven states, saidPerkins.

“With another 14 MMW in Texas that will be deregulated January1, 2002, we are well on our way to becoming one of the nation’slargest power generators.”

Reliant’s wholesale energy trading and marketing business ranksamong the top five in the U.S. in combined electricity and naturalgas volumes, and has a presence in most of the major power regionsof the country. Currently, it has more than 26 MMW of powergeneration in operation in the U.S. and western Europe, and hasalso announced development projects and acquisitions that areexpected to add nearly 6 MMW, according to the company.

Carolyn Davis, Houston

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