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Strategies & Market Trends : IPPs and Merchant Energy Co.s -- Ignore unavailable to you. Want to Upgrade?

To: KyrosL who wrote (833)	12/29/2002 12:14:59 AM
From: Larry S.	Respond to of 3358

I just got this from CNP: - Dear CenterPoint Energy Shareholder: The Board of Directors of CenterPoint Energy, Inc. has approved a distribution of Texas Genco Holdings, Inc. common stock to CenterPoint Energy’s shareholders. As a shareholder of CenterPoint Energy, you will receive, on or about January 6, 2003, one share of Texas Genco common stock for every 20 shares of CenterPoint Energy common stock you owned at the close of business on December 20, 2002, the record date for the distribution. The distributed shares represent approximately 19 percent of the outstanding shares of Texas Genco common stock. This stock distribution will be taxable to you. CenterPoint Energy is making this distribution to establish a public market value for shares of Texas Genco common stock. The value established will be used to calculate how much CenterPoint Energy can recover as “stranded costs” in 2004. CenterPoint Energy is entitled to recover its generation related stranded costs under Senate Bill 7, a law enacted by the Texas legislature in 1999 that substantially changed the regulatory structure governing electric utilities in Texas. We expect Texas Genco will be positioned to take advantage of market opportunities in power generation created by Senate Bill 7, which we believe is a fundamentally different business under the recent regulatory changes than our core transmission and distribution utilities business. Your current shares of CenterPoint Energy common stock will continue to represent your ownership interest in CenterPoint Energy after the distribution. CenterPoint Energy will continue to own approximately 81% of the outstanding shares of Texas Genco common stock until at least January 2004, when Reliant Resources, Inc., a former subsidiary of CenterPoint Energy, has the option to buy the common stock of Texas Genco owned by CenterPoint Energy. The public market value will be used to determine the price that Reliant Resources would pay for those shares. Texas Genco’s shares will be listed on The New York Stock Exchange under the symbol “TGN” after the distribution. Shares of CenterPoint Energy common stock will continue to be listed on The New York Stock Exchange under the symbol “CNP.”