Exhibit 99.1

           Dynegy Announces Settlement Agreement With Kroger

    HOUSTON--(BUSINESS WIRE)--July 3, 2003--Dynegy Inc. (NYSE:DYN)
today announced that it has reached an agreement with the Kroger
Company (NYSE:KR) related to four power supply contracts. Under the
terms of the proposed settlement agreement, which must be approved by
the Federal Energy Regulatory Commission, Kroger will pay Dynegy $110
million to terminate two of four power contracts and to restructure
the remaining two contracts through which Dynegy indirectly provides
electricity to Kroger subsidiary stores in California. The parties
have also agreed to resolve an outstanding FERC dispute related to
contract pricing. The FERC is expected to rule on the proposed
settlement within the next 60 days.
    As part of the settlement, Dynegy will continue to provide Kroger
subsidiary stores in California with 50 megawatts of electricity
through 2006 under the two restructured contracts. Dynegy expects to
record a pre-tax, non-cash charge of approximately $30 million in its
customer risk management segment in the second quarter 2003. The $110
million cash payment is expected during the third quarter and
represents an accelerated payment under the terminated and
restructured contracts.
    Dynegy Inc. provides electricity, natural gas, and natural gas
liquids to wholesale customers in the United States and to retail
customers in the state of Illinois. The company owns and operates a
diverse portfolio of energy assets, including power plants totaling
more than 13,000 megawatts of net generating capacity, gas processing
plants that process more than 2 billion cubic feet of natural gas per
day and approximately 40,000 miles of electric transmission and
distribution lines.
     Certain   statements   included  in  this  news  release  are  intended  as
"forward-looking    statements."   These   statements    include    assumptions,
expectations,   predictions,   intentions  or  beliefs   about  future   events,
particularly  the  settlement of certain  litigation  brought  against Dynegy by
Kroger  Company.  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  Dynegy's  ability to obtain FERC approval for the settlement.
There can be no assurance that such approval will be obtained.  More information
about the risks and uncertainties  relating to these forward-looking  statements
are found in Dynegy's SEC filings,  particularly  its Annual Report on Form 10-K
for the year ended  December 31, 2002 and its Quarterly  Report on Form 10-Q for
the quarter  ended March 31,  2003,  which are  available  free of charge on the
SEC's web site at http://www.sec.gov.

    CONTACT: Dynegy Inc., Houston
             Media:
             John Sousa or David Byford, 713/767-5800
             or
             Analysts:
             Christina Cavarretta or Mona Evans, 713/507-6466