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 capacity,and bring Reliant’s domestic generating capacity to 23 MMW.

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. Two weeks ago, aheat wave swept through the mid-Atlantic region, pushing gas pricesup and tightening supplies. Even though temperatures have moderatedacross the middle of the country, storage remained tight lastweekend and prices remained steady, and Reliant is riding the waveas one of the leading generators in a busy region.

“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 Energychairman. “Acquisition of PJM assets brings our domestic generatingportfolio to 23 MMW. More important, it will have a positive impacton our earnings and was a key component in allowing us to raise ourearnings growth expectations for 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%.

“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 ofReliant Energy Wholesale Group. “This acquisition is a key additionto our strategic portfolio of assets and market positions.”

Reliant only began acquiring other utilities a little more thantwo years ago, and since that time, it has grown its unregulatedpower generation business to approximately 9 MMW in seven states,said Perkins. “With another 14 MMW in Texas that will bederegulated January 1, 2002, we are well on our way to becoming oneof the nation’s largest power generators.”

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