Continuing ongoing efforts to bolster its balance sheet, Reliant Resources Inc. on Wednesday disclosed that it has entered into a definitive agreement for the sale of its 588 MW Desert Basin plant in Arizona to the Salt River Project Agricultural Improvement and Power District (SRP) for $288.5 million.

Reliant will use the proceeds from the sale to prepay debt under its existing credit facility or for the possible acquisition of CenterPoint Energy Inc.’s 81% interest in Texas Genco Holdings Inc. Reliant said that the sale is expected to be neutral to earnings per share in 2004.

Desert Basin, a combined-cycle facility, started commercial operation in 2001 and is currently providing all of its power to SRP under a 10-year power purchase agreement. The facility is located in Casa Grande, AZ.

The transaction is subject to regulatory approvals, including the Federal Energy Regulatory Commission, and certain third-party consents and approvals. The deal is expected to close by the end of 2003.

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