EXHIBIT 99.1
NEWS
Media Contacts: John Sousa Ed Van Herik
Dynegy SDG&E
(713) 507-3936 (877) 866-2066
www.dynegy.com www.sdge.com
Trudy Marshall
NRG Energy
(612) 373-5410
Investor Relations
Contacts: Margaret Nollen Clem Teng
Dynegy Inc. SDG&E
(713) 767-8707 (877) 736-7727
SDG&E COMPLETES SALE OF ENCINA POWER
PLANT AND COMBUSTION TURBINES
TO DYNEGY, NRG ENERGY
SAN DIEGO, May 21, 1999 -- San Diego Gas & Electric (SDG&E)
today completed the sale of its 965-megawatt Encina Power Plant in
Carlsbad and 253 megawatts (MW) of combustion turbine facilities in
San Diego County to Dynegy Inc. and NRG Energy Inc.
Dynegy and NRG Energy jointly paid $356 million in cash to
acquire both the plant and 17 combustion-turbine generators, which
are used during times of peak electricity demand. Dynegy will
provide fuel-management services and market energy out of the Encina
Power Plant and combustion turbines for the partnership. NRG Energy
will manage the operation of the power generation assets out of its
new San Diego office.
"The sale of these two San Diego power plants is enabling us to
move to a competitive marketplace for the commodity of electricity
two-and-a-half years sooner than expected, a step that will benefit
both our shareholders and customers," said Edwin A. Guiles, president
of SDG&E. "The sale also allows us to focus more on the future of
SDG&E, on becoming a world-class energy-delivery company."
Under the terms of the sale, SDG&E will operate and maintain
the facility for the new owners for two years after the sale.
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"The timing of the addition of these assets to our power-
generation franchise enables us to capitalize on the opportunities in
the California power market during the onset of the peak summer
season," said Chuck Watson, chairman and chief executive officer of
Dynegy. "We look forward to a strong long-term relationship with the
Carlsbad community and its residents."
"This Southern California addition to our West Coast portfolio
is an integral part of our strategy to focus on building our core
markets in order to become one of the top players," said David
Peterson, chairman, president and chief executive officer of NRG
Energy. "Consistent with that leadership position, we are committed
to high standards for safety, environmental performance and
reliability for the communities we serve."
The Encina Power Plant began operation in 1954 and was expanded
throughout the 1970s. The facility consists of five steam-generating
units and an on-site combustion turbine. Other assets being sold
along with the plant are substantial acreage including the outer and
middle sections of the Agua Hedionda Lagoon.
Proceeds from the sale of the Encina Power Plant are being used
by SDG&E to pay down the Competition Transition Charge (CTC), now on
customer bills. The CTC is a line item on the bills for all
customers of the state's investor-owned utilities -- SDG&E, Southern
California Edison and Pacific Gas & Electric (PG&E) -- to recover the
cost of past capital investments, including power plants and other
generating assets, made uneconomic by the shift to a competitive
market.
SDG&E has asked the California Public Utilities Commission for
authority to end collection of the majority of its CTC on July 1,
1999, in part because of proceeds from the sale of its power plants.
The sale of SDG&E's South Bay Power Plant in Chula Vista, Calif., to
the San Diego Unified Port District was completed April 23, 1999.
The Encina Power Plant and associated combustion turbines
increase the number of power generation assets owned by Dynegy in
California to 21. In addition to the
El Segundo and Long Beach facilities, Dynegy has natural gas-fired
facilities in Bakersfield, Corona, Crockett, Stockton, and Taft.
Encina and the combustion turbines increase the generating capacity
of Dynegy's California assets to 3,478 MW. The capacity of Dynegy's
31 U.S. generation assets currently operating or under construction
is more than 6,800 gross MW.
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Dynegy (NYSE: DYN), formerly known as NGC Corp., is one of the
country's leading marketers of energy products and services. The
name Dynegy reflects the company's evolution from a natural gas
marketing company to a dynamic energy company with a fully integrated
energy network to meet the growing challenges of the energy market of
the future. Through its leadership position in gathering,
processing, transportation, independent power generation, and
marketing of energy, the company provides energy solutions to its
customers located primarily in North America and the United Kingdom.
NRG is one of the world's leading independent power producers,
specializing in the development, construction, operation, maintenance
and ownership of low-cost, environmentally sensitive power plants.
Established in 1989, NRG has a high quality portfolio of projects in
the United States, Europe, the Pacific Rim, and Latin America. NRG
is involved in over 16,000 MW of projects utilizing diverse fuel
types including natural and landfill gas, hydro, and solid fuels such
as coal, lignite, biomass and refuse-derived fuel.
San Diego Gas & Electric (SDG&E) is a public utility that
provides service to
3 million consumers through 1.2 million electric meters and 720,000
natural gas meters in San Diego and southern Orange counties. SDG&E
is a subsidiary of Sempra Energy (NYSE: SRE), a Fortune 500 energy
services holding company based in San Diego.
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