EXHIBIT 99 (2)

                        NIAGARA MOHAWK REACHES AGREEMENT
                              TO SELL COAL STATIONS


     SYRACUSE, Dec. 23 -- Niagara Mohawk Power Corp. (NYSE: NMK) today announced
an agreement to sell its Huntley and Dunkirk coal-fired electric generating
stations to NRG Energy, Inc. for $355 million.  The coal stations have a book
value of approximately $370 million and a combined capacity of 1,360 megawatts.

NRG  Energy, a wholly owned subsidiary of Northern States Power Company (NYSE:
NSP), is a leading independent power producer specializing in the development,
construction, operation, maintenance and ownership of power plants.  NRG is
headquartered in Minneapolis and is one of the fastest growing generation
companies in the world.

Under a transition power contract in place through June 2003, Niagara Mohawk
will purchase electricity from NRG at prices consistent with those negotiated in
its POWERCHOICE regulatory agreement.

The Huntley Station, located in the Town of Tonawanda just north of the City of
Buffalo, consists of six coal-fired units with a total capacity of 760
megawatts.  The two oldest Huntley units, Units #63 and #64, with a combined
capacity of 180 megawatts and a book value of approximately $23 million (of the
$370 million total book value), were placed into commercial operation in 1942
and 1948 respectively.  As part of the agreement, NRG will retire or re-power
these two units, providing environmental benefits through reduced emissions.
The four remaining Huntley units have a combined capacity of 580 megawatts.

The Dunkirk Station is located on the shores of Lake Erie in Dunkirk, N.Y., and
consists of four coal-fired units with a total capacity of 600 megawatts.

"We believe we've received good value for our coal stations through the
competitive auction process," said William E. Davis, Niagara Mohawk's chairman
and chief executive officer.  "For the past 45 years the Huntley and Dunkirk
stations have been an important part of Niagara Mohawk's commitment to deliver
safe and reliable power to our customers.  We're pleased that NRG is the
successful bidder.  Their commitment to invest in the competitive electric
generation business should provide a good future for these coal stations.  We're
also pleased with the environmental benefits that will be created by NRG's
commitment to retire or re-power the two oldest Huntley units."

The sale is subject to approval by the New York Public Service Commission and
various federal agencies.  Niagara Mohawk expects to complete the transaction by
the middle of 1999.

"With the sale of the coal stations, we've now completed the sale of the two
largest components of our fossil and hydroelectric generating portfolio," Davis
said.  "In total, we've signed agreements to sell 2,021 megawatts of capacity
for $780 million, or $386 per kilowatt of installed capacity.  This price
represents a 25 percent premium to their total book value of approximately $620
million.  The proceeds from the sale will be used to accelerate the retirement
of debt consistent with our plan to create value for our shareholders."

Niagara Mohawk continues to pursue the sale of its oil and gas-fired plants in
Albany and Oswego and hopes to be in a position to announce the winning bidder
or bidders early in 1999.  Divestiture of Niagara Mohawk's fossil-fueled and
hydroelectric generating facilities is one of the major elements of the
company's POWERCHOICE plan to reduce prices and promote competition.

Investment bankers Merrill Lynch & Co. and Donaldson, Lufkin & Jenrette
Securities are serving as Niagara Mohawk's financial advisors for the generation
asset sale.

Niagara  Mohawk is an investor-owned energy services company that provides
electricity to more than 1.5 million customers across 24,000 square miles of
Upstate New York.  The company also delivers natural gas to more than 500,000
customers over 4,500 square miles of eastern, central and northern New York.