Reliant Energy Announces Formation of Reliant Energy Renewables, Inc.;
Start of Wind Power, Landfill Gas-to-Electricity Power Generation Projects

HOUSTON, Texas - Reliant Energy today announced the formation of Reliant Energy Renewables, Inc., an unregulated affiliate of Reliant Energy Wholesale Group, and the start of two major Texas renewable energy projects that will produce electricity for the state's consumers using wind power and methane gas extracted from landfills.

The wind power project, the largest single installation of its kind in the world, will be located on 3,141-foot King Mountain, near McCamey, in Upton County in far West Texas, about 70 miles south of Odessa; the methane gas-to-electricity generation project will involve 12 existing landfill sites in Texas. Plans call for Reliant Energy to begin selling electricity from both projects by the fourth quarter, 2001.

"These projects are indicative of Reliant Energy's commitment to the environment and to Texas in helping the state meet a legally mandated requirement to have 2,000 megawatts of new renewable power projects developed by Jan. 1, 2009,"

said Joe Bob Perkins, Reliant Energy Wholesale Group president and chief operating officer.

The renewable energy requirement was enacted into law during the last session of the Texas Legislature with passage of Senate Bill 7. The new law will restructure the state's electricity market in 2002.

According to Perkins,

"As we have done elsewhere in the U.S., we are pleased to take a leadership position in developing new, environmentally friendly projects in Texas - and to meet the need for additional electricity generation, especially when it can benefit many of the state's rural electricity consumers."

Electricity that will be produced by the two projects will be sold into the state's power grid, to rural electric cooperatives, and to other retail energy providers after the state's energy markets are restructured.

"Together, these projects will produce approximately 250 megawatts of electricity, or enough power to serve nearly 80,000 households,"

Perkins added.

The wind power project, to be called King Mountain Wind Ranch, will produce electricity from about 160 wind turbine generators, each capable of generating 1.3 megawatts. Construction is slated to begin this fall. As part of the project, Reliant Energy Renewables is working with Cielo Wind Power, LLC, and Renewable Energy Systems, Ltd., to develop, build, and operate King Mountain Wind Ranch on a turn-key basis. Reliant Energy will buy the electricity from Cielo Wind Power and Renewable Energy Systems for re-sale.

Cielo Wind Power is the leading developer of wind power facilities in Texas. Based in Austin, Cielo has the state's largest development staff dedicated solely to cost-effective and environmentally responsible wind project development.

No water will be required, and the wind ranch will produce zero emissions.

"As a result of Reliant Energy's progressive position on wind energy, millions of gallons of water resources will be conserved, tons of air emissions will be eliminated, and hundreds of jobs will be created in rural Upton County,"

said Walter Hornaday, president of Cielo Wind Power.

Renewable Energy Systems is a leading developer of wind power facilities in Europe, as well as California and Texas. It is an affiliate of the large British industrial construction concern, the McAlpine Group.

"This is a Texas-sized commitment by Reliant Energy to diversify its electricity supply portfolio with pollution-free renewable energy,"

said Ian Mays, president of Renewable Energy Systems.

This development is designed to be the largest single wind power installation in the world in terms of megawatt capacity, according to both Hornaday and Mays.

"The wind ranch complex can produce more than 200 megawatts of renewable power, using only the natural environment - the West Texas wind - to rotate giant turbine blades to generate the electricity. That means we are not dependent on the fossil fuels that would normally be required on a continual basis to generate the electricity, such as natural gas or coal,"

said Jeff Ferguson, Reliant Energy Wholesale Group director of Special Projects.

Reliant Energy has conducted wildlife habitat and aesthetic studies, among others, and additional studies will be conducted during the course of the equipment installation to mitigate possible impacts. Initial project data indicate no adverse affects on wildlife, and the turbine generators will be designed to reduce the risk of injuring wildfowl.

The King Mountain wind power project is the second that Reliant Energy or its units are involved in. Reliant Energy HL&P, the company's regulated electricity provider for the greater Houston area, obtains 22 megawatts of electricity from a wind generation project in Culberson County, also in far West Texas.

Reliant Energy's landfill gas-to-electricity project, which will extract methane gas that occurs naturally in landfills as materials decompose, will produce a total of 44 megawatts of power.

According to Ferguson,

"The methane will be collected from shallow wells that will be drilled into each landfill. The gas will then enter a closed pipeline system connecting to reciprocating engines. The methane will fuel the engines, which, in turn, will generate electricity."

"This process will substantially reduce the amount of uncontrolled methane, a greenhouse gas, that's released into the atmosphere,"

Ferguson noted.

Installation will occur in the first quarter, 2001.

Landfills included in the project are the Atascocita landfill at Humble and the Blue Bonnet landfill in Houston. Others are located at Alvin, Security, Conroe, New Braunfels, Hutto, Temple, Waco, Sherman, Kingston, and Fort Worth. All are operated by Waste Management, Inc., of Houston, the largest national waste disposal company.

Jenbacher Energiesysteme, LTD, the American subsidiary of Jenbacher AG, of Austria, will supply the engines that will be used to convert the gas into electricity. Jenbacher is the only manufacturer whose entire product line is dedicated to non-petroleum-based gases.

This specialization has resulted in Jenbacher's position as the world's leading supplier of engines utilizing landfill, wastewater treatment, and other low BTU gases. Jenbacher will be responsible for the design, construction, and operation of the plants used in the project.

The project engines are highly efficient and meet the most stringent of emissions ratings, which are, in part, controlled by Jenbacher's LEANOX™ control system, setting the industry standard for emissions controls.

Reliant Energy (NYSE: REI), based in Houston, Texas, is an international energy services and energy delivery company with $20 billion in annual revenue and assets totaling $30 billion.

The company has a wholesale energy trading and marketing business that 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 U.S. It also has power generation and wholesale trading and marketing operations in western Europe. The company has nearly 27,000 megawatts of power generation in operation in the U.S. and western Europe and has announced acquisitions and development projects that will add another 5,000 megawatts. Reliant Energy also has marketing and distribution operations serving nearly four million electricity and natural gas customers in the U.S., significant interests in power distribution operations serving more than 10 million customers in Latin America, and a telecommunications business serving the Houston area.

For more information about Reliant Energy, visit the company's website at www.reliantenergy.com.