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Reliant Continues Buying Spree Across Country

Reliant Continues Buying Spree Across Country

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

Sixteen of the plants are located in Pennsylvania, four in New Jersey and one is in Maryland --- purchases that come at an opportune time for the acquisitive Texas company. Last week heat wave in the Mid-Atlantic region, pushing up power and gas prices because of tightening supplies.

"This acquisition significantly advances our strategy of owning power generation assets in key regions of the country and using our commercial skills in energy trading and marketing to optimize the value of the assets," said Steve Letbetter, Reliant Energy CEO. "[I]t will have a positive impact on our earnings and was a key component in allowing us to raise our earnings growth expectations for the year to 10% to 12%."

All of the acquired power plants are fueled by a combination of coal at 50%; oil and natural gas, 46%; and hydro, at 4%, and they represent a combination of baseload, peaking and intermediate generation.

"The PJM market is a high-priority commercial region for us, and we are pleased to achieve a very substantial power generation presence," said Joe Bob Perkins, president and chief operating officer of Reliant Energy Wholesale Group. "This acquisition is a key addition to our strategic portfolio of assets and market positions."

Reliant only began acquiring other utilities a little more than two years ago, and since that time, it has grown its unregulated power generation business to 9,000 MW in seven states, said Perkins.

"With another 14 MMW in Texas that will be deregulated January 1, 2002, we are well on our way to becoming one of the nation's largest power generators."

Reliant's wholesale energy trading and marketing business ranks among the top five in the U.S. in combined electricity and natural gas volumes, and has a presence in most of the major power regions of the country. Currently, it has more than 26 MMW of power generation in operation in the U.S. and western Europe, and has also announced development projects and acquisitions that are expected to add nearly 6 MMW, according to the company.

Carolyn Davis, Houston

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