Exhibit 99.1

                        Media Inquiries:      Nicholas J. Ashooh   315/428-6922
                                              Kerry P. Burns       315/428-5266
                        Financial Inquiries:  Leon T. Mazur        315/428-5876



              NIAGARA MOHAWK, INDEPENDENT POWER PRODUCERS AGREE IN
                PRINCIPLE TO RESOLVE ABOVE-MARKET POWER CONTRACTS


    Proposal Includes Cash, Debt Securities And Equity; Would Reduce Prices
    For All Customer Classes, Ease Transition To Competition; Details Still
                                To Be Negotiated


    SYRACUSE, March 10 -- Niagara Mohawk Power Corp. (NYSE:NMK) and 19
    independent power producers today jointly announced an agreement in
    principle to restructure or terminate 44 power purchase contracts.
    These contracts represent more than 90 percent of Niagara Mohawk's
    above-market power costs under all existing IPP contracts.

    The agreement contemplates that Niagara Mohawk would restructure or
    terminate the 44 power contracts in exchange for approximately $3.6
    billion in cash and/or debt securities, and 46 million common shares,
    representing approximately 25 percent of the anticipated fully diluted
    outstanding common shares. The new debt will be subordinate to existing
    first mortgage bonds.

    In addition, Niagara Mohawk and the IPPs would enter into new
    agreements that would compensate the IPPs and hedge the prices for
    specified amounts of power. Additional information on possible terms
    for these agreements is being filed today with the Securities and
    Exchange Commission. Niagara Mohawk estimates it will realize savings
    of up to $5 billion, in nominal dollars, over 15 years, with those
    savings occurring in the second half of that period.

    Under the agreement, electricity prices for all customer classes would
    be reduced, with larger reductions allocated to large commercial and
    industrial customers to retain and attract jobs in upstate New York.
    Other state actions, such as passage of the Ratepayer Relief Act or
    cuts in utility taxes, would produce further savings for residential
    and commercial customers.

    William E. Davis, Niagara Mohawk's chairman and chief executive
    officer, and Joseph P. Kearney, president and CEO of U.S. Generating
    Co., one of the lead negotiators for the IPPs, both called the
    agreement in principle a critical step toward resolving the independent
    power issue.


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    "Although we have a lot more work to do, we now have an agreement that
    should allow us to deliver meaningful rate relief to customers while
    arresting Niagara Mohawk's financial decline," Davis said. "We also
    have a road map for rebuilding shareholder value and for positioning
    Niagra Mohawk to compete successfully in the new competitive
    electricity market."


    Kearney said "The agreement builds momentum toward competition and
    choice." Kenneth A. Buckfire, the Wasserstein Perella & Co., investment
    banker advising the IPPs, said, "This agreement represents a consensus
    of all 19 IPPs supporting an equitable settlement of the power
    contracts and restoring financial health to Niagara Mohawk, their key
    customer."

    Carol Murphy, executive director of the Independent Power Producers of
    New York said, "New York's independent power producers look forward to
    a strong energy partnership with Niagara Mohawk." All parties thanked
    the office of N.Y. Gov. George Pataki and Public Service Commission
    Chairman John O'Mara for their support and guidance during
    negotiations.

    The parties cautioned that there are still important issues that must
    be resolved including negotiations with each IPP of specific terms of
    the new price-hedging agreements that may be executed. Final resolution
    will also require execution of binding agreements; approval of Niagara
    Mohawk shareholders; New York Public Service Commission approval of
    both the agreement and an acceptable long-term rate structure; other
    state and federal approvals; successful completion of all financing
    transactions on reasonable terms; the resolution of all tax issues and
    obtaining required amendments or waivers under existing credit
    agreements and third-party contracts.

    The parties said they will begin negotiating remaining details
    immediately with a goal of presenting a final agreement to the New York
    PSC for approval. The parties will seek required financing following
    PSC approval and expect to close the transaction by year-end 1997.

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