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NRG Energy IPO to Fund Projects

NRG Energy IPO to Fund Projects

NRG Energy Inc., which has evidenced some pretty big capital plans of late, is going public. The Minneapolis-based subsidiary of Northern States Power filed for an offering of 18% of its common stock. The maximum aggregate price of the offer is $600 million. All proceeds will remain with NRG Energy.

In March Northern States approved the NRG stock issue and said the offering would raise capital intended to fund a portion of NRG's project investments and other capital requirements for this year. None of the proceeds are to go to Northern States.

Also last month, NRG completed the purchase from National Power of the 680 MW gas-fired Killingholme A combined-cycle gas-turbine power station in North Lincolnshire, England, for about US$620 million. The company also bought 1,708 MW of fossil fuel generating assets from Cajun Electric Power Cooperative Inc. in Louisiana for $1.026 billion.

This month NRG subsidiary NRG Thermal Corp. agreed to buy the Harrisburg Steam Works and Statoil Energy Power/Paxton LP, both in Harrisburg, PA, from Statoil Energy Inc. In February, NRG Energy signed up with GE Power Systems to buy 11 gas turbine generators and five steam turbine generators for about $500 million over the next five years.

NRG Energy is primarily engaged in the acquisition, development, ownership and operation of power generation facilities. NRG Energy owns all or a portion of 57 power generation projects with a total generating capacity of more than 23,000 MW; its net ownership interest in these projects exceeds 13,000 MW.

The offering will be managed by Salomon Smith Barney Inc. Additional underwriters include Credit Suisse First Boston; ABN AMRO Rothschild; Banc of America Securities LLC; Goldman, Sachs & Co.; Lehman Brothers; Merrill Lynch & Co.; and Morgan Stanley Dean Witter. A registration statement has been filed with the SEC but has not yet become effective.

Joe Fisher, Houston

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