Settlement Agreement Reached on Price-to-Beat Adjustments

HOUSTON, Feb. 18 /PRNewswire-FirstCall/ -- Reliant Energy has reached an agreement with consumer groups and the Public Utility Commission staff that addresses Reliant's retail price adjustments associated with CenterPoint Energy's stranded-cost recovery process.

"This agreement is good for Reliant Energy and its customers," said Joel Staff, chairman and chief executive officer of Reliant Energy. "The company benefits from the full pass through of all changes to CenterPoint Energy's charges related to stranded costs. Customers will see lower prices assuming that natural gas prices stay at or below current levels through March."

In addition to allowing the base-rate adjustments, the agreement calls for Reliant to decrease the fuel portion of its price two times this year, if natural gas prices decrease during specified periods.

At current natural gas prices, the first change would result in an overall price decrease for Houston area price-to-beat* customers. However, the net effect of the price adjustments will not be certain until March 29, when the benchmark natural gas price for establishing the fuel factor is final. If the agreement is approved by the PUC, the first change to Reliant Energy's price will go into effect April 29.

Key provisions of the agreement include: -- All changes to CenterPoint Energy's charges related to stranded costs will be passed through concurrently. The first of these adjustments will occur on April 29. -- Excess Mitigation Credits required of CenterPoint will cease after April 29. Reliant Energy's price to beat will be adjusted simultaneously to reflect that change. -- On the same day, Reliant Energy's fuel factor will be reset based on the average of the 12-month forward natural gas prices from March 1 to March 29, if that price is lower than $7.499 per mmBtu. The fuel factor will be frozen from April 29 through August 11. -- A second fuel factor decrease is possible in August, if fuel prices have decreased by at least 5 percent from the previous level. The company will not increase the fuel factor from August 11 to October 31, unless natural gas prices have increased by more than 10 percent. The normal threshold for fuel factor increases during this period is a 5 percent increase in natural gas prices.

The parties to the agreement include the Public Utility Commission staff, the City of Houston, the Gulf Coast Coalition of Cities and the Office of Public Utility Counsel.

Reliant Energy, Inc. based in Houston, Texas, provides electricity and energy services to retail and wholesale customers in the U.S. The company provides energy products and services to approximately 1.9 million electricity customers, ranging from residences and small businesses to large commercial, industrial, governmental and institutional customers, primarily in Texas. Reliant also serves commercial and industrial clients in the PJM (Pennsylvania, New Jersey, Maryland) Interconnection.

The company is one of the largest independent power producers in the nation with approximately 19,000 megawatts of power generation capacity in operation or under contract across the U.S. These strategically located generating assets utilize natural gas, wind, fuel oil and coal. For more information, visit our Website at http://www.reliant.com/corporate .

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* The price to beat is the price that Reliant Energy charges most of

its Houston area residential and small commercial customers.