Exhibit 99.1

Press Release

SOURCE: Dynegy Inc.

Dynegy Agrees to Sell Northern Natural Gas to MidAmerican Energy

HOUSTON--(BUSINESS WIRE)--July 29, 2002--Dynegy Inc. (NYSE:DYN - News) today
announced that it has agreed to sell Northern Natural Gas Company (NNG) to
MidAmerican Energy Holdings Company for $928 million in cash, subject to
adjustment for working capital changes. Under the terms of this agreement, which
have been approved by the boards of both companies, MidAmerican Energy will
acquire all of the common and preferred stock of NNG and will assume $950
million in outstanding NNG debt. The transaction is expected to close in August
2002.

"The closing of this sale will improve our liquidity position and help us serve
our customers," said Dan Dienstbier, interim chief executive officer of Dynegy
Inc. "This is a decisive step forward in our ongoing efforts to improve our
financial and business profile. We are committed to achieve a level of financial
viability that will create a renewed sense of market and customer confidence in
our company."

Dynegy previously announced its intention to execute a partial sale or a joint
venture arrangement for NNG as part of its ongoing capital and liquidity plan.
Dienstbier said, "The fact that we were able to achieve a 100 percent sale of
NNG is a testament to the quality of its employees and the safety and efficiency
of its operations, and will provide us with a greater source of funds than
originally planned." Elimination of the NNG debt leaves Dynegy with only a $300
million maturity due in November and no other significant maturities until May
2003.

The sale is subject to customary closing conditions, including Hart-Scott-Rodino
approval. Dynegy and MidAmerican Energy have agreed to work together to expedite
this approval process in order to complete the sale as quickly as possible. Upon
completion, approximately 1,100 Dynegy employees working for NNG will become
MidAmerican Energy employees.

Merrill Lynch & Co. acted as the exclusive financial advisor to Dynegy in this
transaction.

NNG's 16,600 miles of pipeline extend from the Permian Basin in Texas to the
upper Midwest, providing extensive access to major utilities and industrial
customers. NNG provides transportation and storage services to its customers and
cross-haul and grid transportation between other interstate and intrastate
pipelines in the Permian, Anadarko, Hugoton, and Midwest areas. Its storage
capacity is 59 billion cubic feet and its market area capacity is approximately
4.3 billion cubic feet per day.

Dynegy Inc. is a global energy merchant. Through its owned and contractually
controlled network of physical assets and its marketing, logistics and risk
management capabilities, Dynegy provides solutions to customers in North
America, the United Kingdom and continental Europe.

The company's web site is www.dynegy.com.






Certain statements included in this news release are intended as
"forward-looking statements" under the Private Securities Litigation Reform Act
of 1995. These statements include assumptions, expectations, predictions,
intentions or beliefs about future events. Dynegy cautions that actual future
results may vary materially from those expressed or implied in any
forward-looking statements. Some of the key factors that could cause actual
results to vary materially from those expected include changes in energy
commodity prices; the timing and extent of deregulation of energy markets in
North America and Europe; the effectiveness of Dynegy's risk management policies
and procedures and the creditworthiness of customers and counterparties; the
liquidity and competitiveness of wholesale trading markets for energy
commodities; operational factors affecting Dynegy's power generation or
midstream natural gas facilities; the cost of borrowing, availability of trade
credit and other factors affecting Dynegy's financing activities, including
Dynegy's ability to execute its capital plan and to maintain its credit ratings;
the results of Dynegy's balance sheet reconciliation process and the re-audit of
its 1999-2001 financial statements, which could cause material changes to
Dynegy's reported financial results for the applicable periods, to current
expectations and estimates and to financial results for future periods; the
demand for and pricing of services offered by Dynegy's telecommunications
segment and the effect of general market conditions in the telecommunications
segment on customers or prospective customers and equipment and service
providers; uncertainties regarding environmental regulations or litigation and
other legal or regulatory developments affecting Dynegy's business, including
litigation relating to the terminated merger with Enron, the California power
market and shareholder claims, as well as the SEC, U.S. Attorney and CFTC
investigations primarily relating to Project Alpha and the CMS Energy trades;
general political, economic and financial market conditions; and any extended
period of war or conflict involving North America or Europe. Moreover, the
closing of the NNG sale is subject to customary closing conditions, including
the receipt of required Hart-Scott-Rodino approval. More information about the
risks and uncertainties relating to these forward-looking statements are found
in Dynegy's SEC filings, which are available free of charge on the SEC's web
site at http://www.sec.gov