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Record-High Natural Gas Prices Force Reliant to Request Fuel Factor Increase

HOUSTON, Oct. 3 /PRNewswire-FirstCall/ -- Facing a 50 percent increase in the price of natural gas since December 2004, Reliant Energy today asked the Public Utility Commission for permission to increase the fuel portion of electric bills for Houston-area residential and small business customers. This is the first time that Reliant has requested a fuel factor adjustment in 2005.

"Natural gas prices continue to increase at an unprecedented pace," said Jim Robb, senior vice president, retail marketing. "We have been reluctant to seek an increase because we are concerned about the impact this will have on our customers. We have delayed this request as long as possible to keep prices stable during the hot summer months."

To mitigate the effect of this increase and any effect that recent hurricanes have had on natural gas markets, Reliant Energy proactively approached the PUC with a proposal to provide a discount to all price-to-beat customers through the end of the year, if its filing is approved by October 28. Reliant will base its fuel factor for the remainder of 2005 on natural gas prices that were in effect prior to Hurricane Katrina, resulting in a 14 percent discount to the fuel factor, or a price of 14.7 cents per kilowatt hour. The discount saves a typical customer approximately $13.40 per month when compared with the price in the company's filing.

Based on the market price of natural gas in today's filing, Reliant Energy's price would be 16.04 cents per kilowatt hour compared to the current price of 12.88 cents per kilowatt hour, a 25 percent increase.

"The end result of this will be a price increase of about 14 percent, or about $18 per month, for the typical residential customer," Robb said. "If approved, the new price will go into effect at the end of October and remain in effect through the end of the year.

"We would prefer not to raise prices at all," Robb continued. "We are offering this discount and other solutions, like the Instant Relief Package, because we realize our customers are faced with growing budget constraints."

Last week, Reliant launched a new program called the "Instant Relief Package" to help Houston-area residential customers immediately lower their electric bills. The new package combines Reliant's Simple Solutions Flex Plan with a balanced billing feature that spreads electricity payments over 12 months. More information is available at http://www.reliant.com/instantrelief .

The increase in natural gas prices is a national trend affecting all electricity suppliers and their customers. All of the other affiliated retail providers in Texas have filed for at least one price increase this year. The reason is that natural gas is the primary driver of the cost of electricity in Texas. Reliant Energy's current fuel factor, which was set in December, is based on a natural gas price of $7.50 per MMBtu. The price of gas in the company's current fuel filing is $11.39 per MMBtu.

The company also offers in depth information on how to save energy on its website, http://www.reliant.com/saveenergy . In addition, Reliant Energy plans to introduce new products this fall designed to provide customers with greater choice and flexibility in how they purchase electricity.

Reliant Energy, Inc. (NYSE: RRI) based in Houston, Texas, provides electricity and energy services to retail and wholesale customers in the U.S. The company provides a complete suite of energy products and services to approximately 1.9 million electricity customers in primarily Texas, ranging from residences and small businesses to large commercial, industrial and institutional customers. Reliant also serves commercial and industrial clients in the PJM (Pennsylvania, New Jersey, Maryland) Interconnection. The company has approximately 19,000 megawatts of power generation capacity in operation, under construction or under contract in the U.S. For more information, visit our Website at http://www.reliant.com/corporate .

This news release contains "forward-looking statements." Forward-looking statements are statements that contain projections about future economic performance and plans. Forward-looking statements are often identified by words such as "anticipate," "estimate," "believe," "could," "intend," "may," "plan," "potential," "predict," "should," "will," "expect," "objective," "projection," "forecast," "goal," "guidance," "outlook," and other similar words.

Forward-looking statements are based on management's beliefs, assumptions and information available to management at the time the statements are made. Actual results may differ materially from those expressed or implied by forward-looking statements as a result of many factors or events, including legislative and regulatory developments, the outcome of pending lawsuits, governmental proceedings and investigations, the effects of competition, financial market conditions, weather conditions and other factors we discuss in our other filings with the Securities and Exchange Commission.

Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any forward-looking statement.

SOURCE Reliant Energy, Inc.

CONTACT: Pat Hammond, media, 1-713-497-7723, or Dennis Barber, investors, 1-713-497-3042, both of Reliant Energy, Inc.

5774 10/03/2005 11:30 EDT http://www.prnewswire.com

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