10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

(Mark One)
þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2009
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from          to

Commission file number 1-16455

RRI Energy, Inc.
(Exact Name of Registrant as Specified in Its Charter)

Delaware (State or Other Jurisdiction of Incorporation or Organization)	76-0655566 (I.R.S. Employer Identification No.)
1000 Main Street Houston, Texas 77002 (Address and Zip Code of Principal Executive Offices)	(832) 357-3000 (Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, par value $.001 per share, and associated rights to purchase Series A Preferred Stock	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes þ     No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes o     No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ     No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes þ     No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ Accelerated filer o Non-accelerated filer o
(Do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes o     No þ

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was $1,751,959,756 (computed by reference to the closing sale price of the registrant’s common stock on the New York Stock Exchange on June 30, 2009, the last business day of the registrant’s most recently completed second fiscal quarter).

As of February 11, 2010, the registrant had 353,270,519 shares of common stock outstanding and no shares of common stock were held by the registrant as treasury stock.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement for its 2010 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days of December 31, 2009, are incorporated by reference into Part III of this Form 10-K.

TABLE OF CONTENTS

Forward-Looking Statements			iii
Glossary of Terms			iv
PART I
	Item 1.	Business	1
		General	1
		Operations	1
		Competition	8
		Seasonality	8
		Environmental Matters	8
		Employees	11
		Executive Officers	12
		Available Information	13
		Certifications	13
	Item 1A.	Risk Factors	13
	Item 1B.	Unresolved Staff Comments	17
	Item 2.	Properties	17
	Item 3.	Legal Proceedings	17
	Item 4.	Submission of Matters to a Vote of Security Holders	17
PART II
	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	18
	Item 6.	Selected Financial Data	19
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
		Consolidated Results of Operations	24
		Liquidity and Capital Resources	32
		Off-Balance Sheet Arrangements	35
		Historical Cash Flows	36
		New Accounting Pronouncements, Significant Accounting Policies and Critical Accounting Estimates	38
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	43
		Non-trading Market Risks	43
		Trading Market Risks	44
	Item 8.	Financial Statements and Supplementary Data	46
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	46
	Item 9A.	Controls and Procedures	46
	Item 9B.	Other Information	46

i

PART III
	Item 10.	Directors, Executive Officers and Corporate Governance	47
	Item 11.	Executive Compensation	47
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	47
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	48
	Item 14.	Principal Accountant Fees and Services	48
PART IV
	Item 15.	Exhibits and Financial Statement Schedules	49
EX-4.9
EX-10.1.B
EX-10.2.B
EX-10.5.B
EX-10.6.B
EX-10.7.B
EX-10.8.B
EX-10.29
EX-10.30
EX-10.31
EX-10.32
EX-10.33
EX-10.34.B
EX-10.41.B
EX-10.47.B
EX-10.48.B
EX-10.49.B
EX-10.68
EX-10.99
EX-10.100
EX-10.101
EX-10.104
EX-10.105
EX-12.1
EX-21.1
EX-23.1
EX-31.1
EX-31.2
EX-32.1
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

ii

Forward-Looking Statements

This report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements that contain projections, assumptions or estimates about our revenues, income, capital structure and other financial items, our plans and objectives for future operations or about our future economic performance, possible transactions, dispositions, financings or offerings, and our view of economic and market conditions. In many cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” and other similar words. However, the absence of these words does not mean that the statements are not forward-looking.

Actual results may differ materially from those expressed or implied by the forward-looking statements as a result of many factors or events, including, but not limited to, the following:

•  Demand and market prices for electricity, capacity, fuel and emission allowances;

•  The timing and extent of changes in commodity prices;

•  Limitations on our ability to set rates at market prices;

•  Legislative, regulatory and/or market developments;

•  Changes in environmental regulations that constrain our operations or increase our compliance costs;

•  Competition in the wholesale power markets;

•  Operating without long-term power sales agreements;

•  Ineffective hedging activities;

•  Our ability to obtain adequate fuel supply and/or transmission services;

•  Interruption or breakdown of our plants;

•  Failure of third parties to perform contractual obligations;

•  Failure to meet our debt service obligations or restrictive covenants;

•  Changes in the wholesale power market or in our evaluation of our plants;

•  The outcome of pending or threatened lawsuits, regulatory proceedings, tax proceedings and investigations;

•  Weather-related events or other events beyond our control; and

•  Financial and economic market conditions and our access to capital.

Other factors that could cause our actual results to differ from our projected results are discussed or referred to in Item 1A of this report. Each forward-looking statement speaks only as of the date of the particular statement and we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Our filings and other important information are also available on our investor page at www.rrienergy.com.

iii

GLOSSARY OF TERMS

ancillary services	Services provided to support transmission grid operations.
BCFe	Billion cubic feet equivalent of natural gas.
Cal ISO	California Independent System Operator.
capacity	Energy that could have been generated at continuous full-power operation during the period.
capacity factor	The ratio of actual net electricity generated to capacity.
CenterPoint	CenterPoint Energy, Inc. and its subsidiaries, on and after August 31, 2002, and Reliant Energy, Incorporated and its subsidiaries, prior to August 31, 2002.
Channelview	RRI Energy Channelview LP, RRI Energy Channelview (Texas) LLC, RRI Energy Channelview (Delaware) LLC and RRI Energy Services Channelview LLC.
CO2	Carbon dioxide.
commercial capacity factor	Generation divided by economic generation.
EBITDA	Earnings (loss) before interest expense, interest income, income taxes, depreciation and amortization expense.
economic generation	Estimated generation at 100% plant availability based on an hourly analysis of when it is economical to generate based on the price of power, fuel, emission allowances and variable operating costs.
EITF	Emerging Issues Task Force.
EPA	United States Environmental Protection Agency.
FASB	Financial Accounting Standards Board.
FERC	Federal Energy Regulatory Commission.
GAAP	Accounting principles generally accepted in the United States of America.
GWh	Gigawatt hour.
ISO	Independent system operator.
Kern	Kern River Gas Transmission Company.
LIBOR	London Inter Bank Offered Rate.
MISO	Midwest Independent Transmission System Operator, which is an RTO.
MW	Megawatt.
MWh	Megawatt hour.
net generating capacity	The average of a facility’s summer and winter generating capacities, net of auxiliary power.
NOx	Nitrogen oxides.
NYMEX	New York Mercantile Exchange.

iv

GLOSSARY OF TERMS
(Continued)

open energy gross margin	Calculated using the day-ahead and real-time market power sales prices received by the plants less market-based delivered fuel costs.
open gross margin	Segment profitability measure; consists of open energy gross margin and other margin; excludes the effects of hedges and other items and unrealized gains/losses on energy derivatives.
Orion Power	Orion Power Holdings, Inc. and its subsidiaries.
other margin	Represents power purchase agreements, capacity payments, ancillary services revenues and selective commercial strategies relating to optimizing our assets.
PEDFA	Pennsylvania Economic Development Financing Authority.
PJM	PJM Interconnection, LLC, which is an RTO.
PJM Market	The wholesale and retail electric market operated by PJM primarily in Delaware, the District of Columbia, Illinois, Maryland, New Jersey, Ohio, Pennsylvania, Virginia and West Virginia.
REMA	RRI Energy Mid-Atlantic Power Holdings, LLC and its subsidiaries.
RERH Holdings	RERH Holdings, LLC and its subsidiaries.
RPM	Model utilized by PJM to meet load serving entities’ forecasted capacity obligations via a forward-looking commitment of capacity resources.
RTO	Regional transmission organization.
SEC	United States Securities and Exchange Commission.
SO2	Sulfur dioxide.

v

PART I

Item 1.   Business.

General

We provide energy, capacity, ancillary and other energy services to wholesale customers in competitive energy markets in the United States through our ownership and operation of and contracting for power generation capacity. Our business consists of four reportable segments: East Coal, East Gas, West and Other. We are a well-capitalized, wholesale generator with more than 14,000 megawatts of power generation plants.

The power generation industry is deeply cyclical and capital intensive. There is the possibility for significant future changes in environmental laws and regulations related to emissions. Competitive power markets are still relatively new and we believe scale and diversity will be important long term.

Over the past 18 months, natural gas and other commodity prices have declined, the spread between gas and coal prices has compressed and the downturn in the economy has reduced demand for electricity. Turmoil in the financial markets has increased the cost of capital and limited its availability. In 2009, we completed the sale of our former retail business, eliminating risk related to collateral posting and contingent capital related to that business. We are focused on managing the risks of operating in the current environment.

While we cannot control commodity prices, cyclicality of the industry or political outcomes, we can position ourselves for the longer term market recovery and industry consolidation that is likely over time. We strive for operating excellence to achieve maximum value from our plants.

For further information about our corporate history, business segments and disposition activities, see notes 1, 20, 21, 22 and 23 to our consolidated financial statements and “Selected Financial Data” in Item 6 of this Form 10-K.

Operations

We focus on operations excellence and continually improving our efficiency and effectiveness. We are implementing a flexible, plant-specific approach to how we operate and invest to maximize the value of our assets. Our objective is to invest for higher performance levels at higher-margin plants, while maintaining performance at lower-margin plants for the expected longer term market recovery. For further discussion, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business Overview—Flexible Plant-Specific Operating Model” in Item 7 of this Form 10-K.

As of December 31, 2009, we owned, had an interest in, leased or contracted for power from 37 electric power plants with an aggregate net generating capacity of 14,581 MW in five regions of the United States. As of December 31, 2009, the net generating capacity of our plants by reportable segment consisted of approximately 32% East Coal, 28% East Gas, 23% West (gas) and 17% Other. Our coal plants generally dispatch as base-load, and our gas, oil and dual fuel plants primarily dispatch as intermediate and/or peaking capacity. We believe coal-fired plants will play an integral role in meeting the United States energy needs for the foreseeable future. Reduced demand for some coal-fired plants could occur depending on the outcome of various pending environmental laws and regulations. Efficient, well located coal-fired plants with emission controls should have a long-term future in the industry.

1

The following table describes our plants as of December 31, 2009:

	Net Generating
Segment, Region, Plant(1)	Capacity (MW)		Fuel Type
East Coal
PJM coal
Cheswick		560	Coal
Conemaugh(2)		281	Coal
Elrama		460	Coal
Keystone(2)		284	Coal
Portland(1)		401	Coal
Seward		525	Coal
Shawville(1)(2)		597	Coal
Titus(1)		243	Coal
PJM coal total		3,351
MISO coal
Avon Lake		763	Coal
New Castle		333	Coal
Niles		244	Coal
MISO coal total(3)		1,340
East Coal total		4,691
East Gas
PJM gas
Aurora		878	Gas
Blossburg		19	Gas
Brunot Island		289	Gas
Gilbert		536	Dual
Glen Gardner		160	Dual
Hamilton		20	Dual
Hunterstown		60	Dual
Hunterstown CCGT		810	Gas
Mountain		40	Dual
Orrtanna		20	Oil
Portland(1)		169	Dual
Sayreville		224	Dual
Shawnee		20	Oil
Shawville(1)(2)		6	Oil
Titus(1)		31	Dual
Tolna		39	Oil
Warren		68	Dual
Werner		212	Oil
PJM gas total		3,601
MISO gas
Shelby		356	Gas
MISO gas total		356
East Gas total		3,957

2

	Net Generating
Segment, Region, Plant(1)	Capacity (MW)		Fuel Type
West
Coolwater		622	Gas
Ellwood		54	Gas
Etiwanda		640	Gas
Mandalay		560	Gas
Ormond Beach		1,516	Gas
West total		3,392
Other
Choctaw		800	Gas
Indian River(4)		587	Dual
Osceola		470	Dual
Sabine(5)		54	Gas
Vandolah(6)		630	Dual
Other total		2,541
Total		14,581

(1)	We own, have an interest in, lease or contract for power from 37 plants, three of which have units included in both the East Coal and East Gas segments. The financial results are primarily included in the East Coal segment for these three plants.
(2)	We lease a 100%, 16.67% and 16.45% interest in three Pennsylvania facilities, Shawville, Keystone and Conemaugh, through facility lease agreements expiring in 2026, 2034 and 2034, respectively. The table includes our net share of the capacity of these facilities.
(3)	We expect these three plants to move into the PJM region in June 2011.
(4)	This plant was mothballed in January 2010.
(5)	We own a 50% interest in this facility located in Texas (non-ERCOT) having a net generating capacity of 108 MW. An unaffiliated party owns the other 50%. The table includes our net share of the capacity of this facility.
(6)	We are party to a tolling agreement entitling us to 100% of the capacity of this Florida facility having 630 MW of net generating capacity. This tolling agreement expires in 2012 and is treated as an operating lease for accounting purposes.

3

The following table reflects operational and financial data for each of our four reportable segments. For further information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Consolidated Results of Operations” in Item 7 of this Form 10-K.

	2009				2008					2007
	GWh		% Economic(1)		GWh			% Economic(1)		GWh		% Economic(1)
Economic Generation(2)(3)
East Coal		24,078.7		61%		27,136.7			67%		31,884.5		79%
East Gas		2,054.7		6%		1,362.5			4%		1,584.2		5%
West		693.4		3%		2,553.9			10%		3,711.8		13%
Other		77.0		1%		74.5			1%		3,802.2		48%
Total		26,903.8		26%		31,127.6			30%		40,982.7		39%
Commercial Capacity Factor(4)
East Coal		82.4%				86.3%					79.0%
East Gas		95.0%				90.6%					91.2%
West		88.1%				93.7%					95.5%
Other		99.1%				82.7%					91.9%
Total		83.6%				87.1%					82.2%
Generation(3)
East Coal		19,850.5				23,425.9					25,195.1
East Gas		1,951.1				1,234.9					1,444.0
West		611.0				2,393.2					3,543.9
Other		76.3				61.6					3,493.6
Total		22,488.9				27,115.6					33,676.6
Open Energy Unit Margin ($/MWh)(5)
East Coal	$	12.04			$	30.69				$	30.88
East Gas		10.25				34.01					34.63
West		22.91				NM	(6)				5.64
Other		—				16.23					6.87
Weighted average total	$	12.14			$	28.07				$	25.89

(1)	Generally represents economic generation (hours) divided by maximum generation hours (maximum plant capacity multiplied by 8,760 hours).
(2)	Estimated generation at 100% plant availability based on an hourly analysis of when it is economical to generate based on the price of power, fuel, emission allowances and variable operating costs.
(3)	Excludes generation related to power purchase agreements, including tolling agreements.
(4)	Generation divided by economic generation.
(5)	Represents open energy gross margin divided by generation.
(6)	NM is not meaningful.

4

The following table reflects operational data for each significant plant with impacts on open energy gross margin in our reportable segments. Thus, this table excludes plants that primarily operated under power purchase agreements during the majority of these years as the financial results from those plants are included in other margin. For further information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Consolidated Results of Operations” in Item 7 of this Form 10-K.

	Economic Generation (GWh)						Commercial Capacity Factor									Generation (GWh)
Plant	2009		2008		2007		2009			2008			2007			2009		2008		2007
Cheswick		3,565.6		2,602.6		3,537.9		77.5	%		94.0	%		82.2	%		2,764.4		2,446.1		2,906.7
Conemaugh		2,144.8		2,311.6		2,397.9		93.2			81.7			88.9			1,998.6		1,888.2		2,130.9
Elrama		410.7		1,400.3		2,882.9		87.3			81.8			68.5			358.6		1,145.2		1,976.0
Keystone		2,353.7		2,408.0		2,386.2		74.7			97.9			85.8			1,757.9		2,357.7		2,046.5
Portland		2,726.6		2,708.6		2,713.7		83.7			79.6			82.8			2,282.0		2,156.1		2,247.8
Seward		4,221.9		4,367.5		4,305.5		80.6			86.4			82.4			3,401.9		3,771.9		3,547.9
Shawville		2,787.9		4,108.1		4,137.1		82.2			84.4			83.5			2,292.7		3,466.5		3,454.2
Titus		1,099.8		1,381.6		1,525.0		86.7			87.3			89.6			953.6		1,206.1		1,367.1
Avon Lake		3,523.5		3,296.2		4,701.0		88.9			86.3			62.1			3,131.6		2,844.3		2,919.3
New Castle		732.1		1,394.3		1,856.4		84.6			90.5			77.4			619.5		1,262.1		1,437.2
Niles		512.1		1,157.9		1,440.9		56.6			76.1			80.6			289.7		881.7		1,161.5
East Coal Total		24,078.7		27,136.7		31,884.5		82.4	%		86.3	%		79.0	%		19,850.5		23,425.9		25,195.1

	Economic Generation (GWh)						Commercial Capacity Factor									Generation (GWh)
Plant	2009		2008		2007		2009			2008			2007			2009		2008		2007
Hunterstown CCGT		1,999.3		1,194.1		1,273.4		95.0	%		90.6	%		93.1	%		1,898.6		1,081.6		1,185.4
Other plants		55.4		168.4		310.8		NM	(1)		NM	(1)		NM	(1)		52.5		153.3		258.6
East Gas Total		2,054.7		1,362.5		1,584.2		95.0	%		90.6	%		91.2	%		1,951.1		1,234.9		1,444.0

	Economic Generation (GWh)						Commercial Capacity Factor									Generation (GWh)
Plant	2009		2008		2007		2009			2008			2007			2009		2008		2007
Bighorn(2)		—		582.8		1,437.0		N/A			94.8	%		99.9	%		—		552.7		1,435.8
Coolwater		130.6		592.2		698.1		50.5	%		92.9			96.5			65.9		550.1		673.7
Mandalay		288.5		581.9		510.2		94.0			97.0			85.6			271.1		564.3		436.7
Ormond Beach		274.3		797.0		1,066.5		99.9			91.1			93.5			274.0		726.1		997.7
West Total		693.4		2,553.9		3,711.8		88.1	%		93.7	%		95.5	%		611.0		2,393.2		3,543.9

	Economic Generation (GWh)						Commercial Capacity Factor									Generation (GWh)
Plant	2009		2008		2007		2009			2008			2007			2009		2008		2007
Channelview(3)		—		—		3,520.1		N/A			N/A			93.2	%		—		—		3,282.3
Choctaw		75.5		71.0		261.1		99.1	%		81.8	%		72.9			74.8		58.1		190.3
Other plants		1.5		3.5		21.0		NM	(1)		NM	(1)		NM	(1)		1.5		3.5		21.0
Other Total		77.0		74.5		3,802.2		99.1	%		82.7	%		91.9	%		76.3		61.6		3,493.6

(1)	NM is not meaningful.
(2)	The Bighorn plant was sold in October 2008.
(3)	Channelview was deconsolidated in August 2007 and the plant was sold in July 2008.

5

The following table reflects revenues by type for each of our reportable segments. For further information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Consolidated Results of Operations” in Item 7 of this Form 10-K.

	2009(1)			2008(1)			2007(1)
	(in millions)
East Coal
Power generation revenues	$	756		$	1,549		$	1,368
Capacity revenues		171			108			26
Total East Coal	$	927	(2)	$	1,657	(2)	$	1,394	(2)
East Gas
Power generation revenues	$	89		$	176		$	181
Capacity revenues		178			135			80
Natural gas sales revenues		242			365			267
Total East Gas	$	509	(2)	$	676	(2)	$	528	(2)
West
Power generation revenues	$	44		$	224		$	227
Capacity revenues		124			152			100
Natural gas sales revenues		139			330			600
Total West	$	307		$	706		$	927
Other
Power generation revenues	$	33		$	107		$	300
Capacity revenues		63			60			62
Natural gas sales revenues		—			253	(3)		127	(3)
Total Other	$	96		$	420		$	489

(1)	These amounts exclude $(14) million, $(65) million and $(135) million relating to unrealized gains/losses on energy derivatives, hedges and other items and other revenues not specifically identified to a particular plant or reportable segment for 2009, 2008 and 2007, respectively.
(2)	For 2009, 2008 and 2007, we recorded $920 million, $1.6 billion and $1.0 billion, respectively, in revenues from a single counterparty (PJM Interconnection, LLC), which represented 50%, 46% and 31%, respectively, of our consolidated revenues. This counterparty is included in our East Coal and East Gas segments.
(3)	We deconsolidated Channelview in August 2007. These amounts represent sales of fuel to Channelview prior to the assets being sold in July 2008.

Markets

In addition to purchasing energy, our customers will, for reliability and to comply with regulations, purchase rights to capacity from our plants. We also provide ancillary services to support transmission grid operations. Our products and services may be provided individually or in combination to investor-owned utilities, municipalities, cooperatives and other companies that serve end users or purchase power at wholesale for resale. We obtain transmission services from various RTOs, ISOs, utilities and municipalities.

We sell energy, ancillary and other energy services in the spot market on an hour-ahead or day-ahead basis, as well as in forward markets for various time periods. We sell our plants’ capacity in forward markets. A significant portion of our revenues comes from energy sold in the spot market and forward sales of capacity. Most of these energy sales occur in our East Coal segment, primarily in the PJM Market. Our capacity sales

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primarily occur through the PJM Market’s reliability pricing model (RPM) auctions, but also in MISO, Cal ISO and other markets where we enter into agreements with counterparties.

Through the RPM auctions, we have committed approximately 5,500 MW of capacity (3,000 MW for coal plants and 2,500 MW for natural gas plants) through May 2013. We expect that a substantial portion of our PJM capacity will continue to be sold in the PJM Market up to three years in advance. Revenue from these capacity sales is determined by market rules designed to ensure regional reliability, encourage competition and reduce energy price volatility. The California Public Utility Commission and Cal ISO are considering possible enhancements to existing resource adequacy requirements, including alternatives similar to capacity markets designed in New England and PJM.

Most of our plants operate in regions administered by PJM, Cal ISO and MISO and none of our plants is subject to traditional cost-based regulation. We can generally sell at market-determined prices. However, these regional jurisdictions operate under FERC-approved market rules. The market rules include price limits or caps applicable to all electric generators and numerous other FERC-approved requirements relating to the manner in which we must operate our plants, including reliability standards. A number of our subsidiaries are public utilities under the Federal Power Act and are subject to FERC rules and oversight regulations. Each of these subsidiaries has been granted market-based rate authority, although a limited amount of services sold by some of them is sold at cost-based rates.

The following table reflects estimated capacity revenues for 2010 and 2011:

	2010 Estimated		2011 Estimated
	(in millions)
East Coal(1)(2)	$	198	$	164
East Gas(1)(2)		203		164
West		114		95
Other		40		51
Total	$	555	$	474

(1)	Includes $391 million and $318 million for 2010 and 2011, respectively, related to the PJM Market.
(2)	Includes $10 million for 2010 and 2011 related to the MISO Market.

Fuel Supply

To ensure adequate fuel supplies, we contract for natural gas, coal and fuel oil for our plants. For our natural gas-fired plants, we also arrange for, schedule and balance natural gas from our suppliers and through transporting pipelines. To perform these functions, we lease natural gas transportation and storage capacity. Our coal supply strategy has been to contract for our expected delivery needs at least one year in advance with prices generally fixed one year in advance. This has caused volatility in our financial results since our energy sales primarily occur in the spot market. Our modest financial hedging program has mitigated some of our fixed-price coal risk. Going forward, we expect to reduce the levels of our physical coal inventory and will continue to evaluate ways to address volatile coal prices. Under some of our agreements, the counterparties are required to provide fuel supply. We sell excess fuel supplies to third parties. See note 2(c) to our consolidated financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Consolidated Results of Operations” in Item 7 of this Form 10-K.

Hedging

We may hedge to (a) seek potential value greater than what is available in the spot or day-ahead markets, (b) address operational requirements or (c) seek a specific financial objective. Our coal procurement strategy is an example of hedging for an operational requirement. We have implemented a modest hedging program for a financial objective. Some of our coal plants’ 2010 and 2011 generation is hedged so that in the event of a sustained depressed commodity environment, we expect to deliver some minimal level of free cash flow. The rest of our fleet is largely unhedged to benefit from the expected longer term market recovery. For further

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discussions, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” in Item 7 of this Form 10-K, “Quantitative and Qualitative Disclosures about Market Risk” in Item 7A of this Form 10-K and notes 2(e) and 6 to our consolidated financial statements.

Other

For further discussion of our business strategy, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business Overview” in Item 7 of this Form 10-K. See “Risk Factors” in Item 1A of this Form 10-K for further discussion on factors that could have an adverse effect on our business.

Competition

The wholesale power generation industry is intensely competitive. Each of our business segments, East Coal, East Gas, West and Other, faces competitors that include other non-utility generators, regulated utilities and other energy service companies, including those owned by investment banking firms, hedge funds and private equity funds. For additional information on the effect of competition, see “Risk Factors” in Item 1A of this Form 10-K.

Seasonality

A large portion of our margins has historically been realized during our third quarter because most of our plants are located in markets where the greatest demand for power occurs during the summer months. For additional information on the effect of seasonality on our business, see “Risk Factors” in Item 1A of this Form 10-K and note 19 to our consolidated financial statements.

Environmental Matters

We are subject to numerous federal, state and local requirements relating to the protection of the environment and the safety and health of personnel and the public. These requirements relate to a broad range of our activities, including the discharge of compounds into the air, water and soil; the proper handling of solid, hazardous and toxic materials and waste; noise and safety and health standards applicable to the workplace. Some of these requirements are under revision or in dispute, and some new requirements are pending or under consideration.

We make decisions to invest in environmental capital projects based on relatively certain regulations and the expected economic returns on the capital. Based on existing regulations and our current market outlook and assessment of the costs of labor and materials and the state of evolving technologies, we estimate that we will invest approximately $34 million in 2010, $20 million in 2011 and $34 million in later years primarily on wastewater treatment, coal combustion product management and environmental maintenance capital projects. The 2010 estimate also includes approximately $14 million to complete SO₂ controls at our Cheswick plant. As discussed further below, for years beyond 2011, the amount of environmental investments could significantly increase subject to the form of final regulations and future market conditions, particularly in regard to NO_x, SO₂ and CO₂ emissions. Although we cannot predict the actual outcome or ultimate effect on our business of environmental laws and regulations that are pending, under consideration or revision, or in dispute, we expect them generally to become more stringent in the future. For additional information on how environmental matters may impact our business, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business Overview” in Item 7 of this Form 10-K, note 16(b) to our consolidated financial statements and “Risk Factors” in Item 1A of this Form 10-K.

Air Quality

Under the Clean Air Act, the EPA sets national ambient air quality standards for pollutants considered harmful to public health and the environment, including NO_x, SO₂, ozone and fine particulate matter (PM_2.5). Emissions of NO_x and SO₂ affect the standards for NO_x and SO₂, are precursors to the formation of ozone and

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PM_2.5, and contribute to reduced visibility. The EPA and states use local and regional controls to attain and maintain the national ambient air quality standards and to control visibility. The EPA also has authority under the Clean Air Act to control mercury and other hazardous air pollutants from major sources of emissions to the air. In addition, the EPA has been taking steps to regulate greenhouse gas emissions.

National Ambient Air Quality Standards

In April 2009, the New Jersey Department of Environmental Protection finalized a regulation requiring a two-phase reduction in NO_x emissions from combustion turbines in New Jersey. Phase I requires reductions during high electricity demand days and runs from May 2009 through 2014. Under our compliance plan, we operate enhanced NO_x controls at our Shawville, Pennsylvania plant (upwind from New Jersey) on high energy demand days. Phase II requires the installation of emission controls on all of our New Jersey plants (Gilbert, Glen Gardner, Sayreville and Werner) by May 1, 2015. If we elect to install these controls, we could incur capital expenditures of up to approximately $190 million primarily during 2013 to 2015. Our initial Phase II control plan must be filed with the state of New Jersey by May 1, 2010, and our decision on investments should occur by 2012.

In March 2005, the EPA finalized the Clean Air Interstate Rule (CAIR) to reduce emissions of NO_x and SO₂ in the Eastern United States in two phases in order to assist with the attainment of both ozone and PM_2.5 standards. The first phase, which took effect in 2009 for NO_x and takes effect in 2010 for SO₂, requires overall reductions within the area of approximately 50% in NO_x and SO₂ emissions on an annual basis. The second phase, which takes effect in 2015, requires additional reductions of approximately 10% for a 60% total reduction in NO_x and approximately 15% for a 65% total reduction in SO₂. CAIR is a cap-and-trade program which requires us to provide an emission allowance for each ton of NO_x and SO₂ that we emit. We maintain or have contracts to purchase emission allowances that at a minimum correspond with forward power sales. In general, we do not have emission allowances for all of our generation. We purchase emission allowances, as needed, to correspond with our power generation.

In July 2008, the United States Circuit Court of Appeals for the D.C. Circuit ruled that CAIR was legally flawed, vacated CAIR in its entirety and remanded CAIR to the EPA for revision consistent with the Court’s opinion. On rehearing, in December 2008, the Court decided that CAIR will remain in effect until the EPA issues a new rule to replace CAIR in accordance with the July 2008 decision. The EPA has stated that it expects to finalize the new rule in 2011. We may install emission controls at our Conemaugh plant for up to $70 million over several years, expected to begin no sooner than 2012.

Eight of our plants are located in geographic areas that are not in compliance with the existing ozone national ambient air quality standards (nonattainment areas). Following finalization of CAIR, it is possible that additional NO_x emission control measures (in addition to the measures required by CAIR) may be necessary at plants in or near nonattainment areas to meet current or revised ozone standards. These control measures may be part of regional or state implementation plans.

Ten of our eleven coal-fired plants are located in nonattainment areas for PM_2.5. States must develop emission reduction plans by April 2012 that bring nonattainment areas into compliance by 2014. These plans may be state-specific or regional in scope. The EPA has estimated that the power generation sector SO₂ and NO_x emissions reductions required by CAIR would allow many of the nonattainment areas to achieve compliance with the revised PM_2.5 standard.

The EPA’s primary focus for achieving compliance with visibility standards is on emissions of NO_x and SO₂, particularly from the power sector. The EPA has asserted that the NO_x and SO₂ reductions to be achieved through CAIR should be adequate to provide the improvements in visibility required by 2013.

States are not precluded from developing plans that would require additional reductions in NO_x and SO₂ emissions to meet ozone, PM_2.5 or visibility improvement goals. In addition, a delay in finalizing the CAIR replacement rule could make additional NO_x and SO₂ reductions necessary.

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Hazardous Air Pollutants

In 2000, the EPA found that regulation of hazardous air pollutants, including mercury, from coal and oil-fired power plants was “appropriate and necessary,” triggering the requirement to regulate such emissions using the Maximum Achievable Control Technology (MACT) standard of the Clean Air Act. In February 2009, the EPA stated its intent to proceed with rulemaking under the MACT standard. This approach considers the most effective control technologies in operation, without regard to cost effectiveness. The EPA has stated it expects to issue rules late in 2011. In the interim, a number of states, including Pennsylvania, pursued mercury regulations. In December 2009, the Pennsylvania Supreme Court upheld a lower court’s determination that the proposed Pennsylvania mercury rule was unlawful and unenforceable.

Greenhouse Gas Emissions

There is an increased global focus over the direction of climate change policy. There are currently no federal CO₂ emission regulations with which our plants must comply. However, the United States Congress is considering legislation that would impose mandatory limitation of CO₂ and other greenhouse gas emissions for the domestic power generation sector. In addition, several states in the northeast, midwest and west are increasingly active in developing state-specific or regional regulatory initiatives to stimulate CO₂ emission reductions in the electric power generation industry and other industries.

Ten northeastern states, including New Jersey and Maryland, formed the Regional Greenhouse Gas Initiative, or RGGI, which requires power generators to reduce CO₂ emissions by 10% by 2019, beginning in 2009. California adopted legislation designed to reduce greenhouse gas emissions to 25% below 1990 levels by 2020, beginning in 2012. In July 2008, the Pennsylvania Climate Change Act was adopted. This legislation requires development of reports of the impacts of climate change in Pennsylvania and potential economic opportunities resulting from mitigation strategies. It also requires development of an annual state-level greenhouse gas emissions inventory and establishment of cost-effective state-level strategies for reducing or offsetting greenhouse gases.

In addition, the EPA issued two regulatory findings in December 2009 that are preliminary steps to establishing regulations limiting greenhouse gas emissions. Assuming the EPA finalizes these regulations, New Source Review requirements may apply if a permit is sought for new construction or a major modification to an existing plant, including application to CO₂ emissions of a yet to be defined best available control technology standard. Individual states may also begin to take into account CO₂ emissions when considering permits to construct or modify significant sources of emissions. In 2009, our plants emitted approximately 20.8 million metric tons of CO₂, approximately 90% of which was from our East Coal segment. The amount of CO₂ emissions from our plants will depend on their dispatch time during the period.

In September 2007, we joined the Chicago Climate Exchange, a voluntary greenhouse gas registry, reduction and trading system. By joining the exchange, we have committed to reduce our annual greenhouse gas emissions to six percent below the average of our 1998-2001 levels by 2010 (no more than 28.6 million metric tons in 2010). We continue to satisfy our reduction targets through previously implemented plant retirements and capacity factor reductions, ongoing heat rate improvement efforts and transacting on the exchange.

Water Regulations

In July 2007, the EPA suspended its 2004 regulations relating to cooling water intake structures at large existing power plants pending further rulemaking. This action was in response to the Second Circuit Court of Appeals’ January 2007 remand of several provisions in the 2004 regulations. In April 2009, the U.S. Supreme Court overturned the Second Circuit on one issue, ruling that the Clean Water Act does not prohibit using cost-benefit analysis in determining appropriate control requirements for cooling water intake structures. The EPA has stated it plans to issue a proposed rule in mid-2010 and has retained interim requirements that plant intakes employ best technology available controls as determined on a plant-by-plant, best professional judgment basis.

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To comply with existing federal rules and subject to market conditions, we may install a cooling tower at one or more of our Shawville, Pennsylvania units for up to $80 million over several years, expected to begin no sooner than 2012.

In September 2009, the EPA announced its intent to revise effluent limitation guidelines for the power generation industry, which are anticipated to result in more stringent regulation. These regulations are applicable to the majority of our plants.

The California State Water Resources Control Board is considering a policy that could result in phasing out the use of coastal water for once-through cooling. If regulations follow this policy, affected plants could be required to install cooling towers or be removed from service. This regulation could impact our Mandalay and Ormond Beach plants.

Coal Combustion Products

Existing state and federal rules require the proper management and disposal of potentially hazardous wastes and other materials. The EPA currently classifies coal combustion products such as fly ash as non-hazardous waste products. Currently, we expect to spend approximately $50 million for ash landfill expansions including approximately $7 million in each of 2010 and 2011 and the remaining amount over several later years. There is increased focus on the regulation of coal combustion products and, if their classifications change, we may be required to change our waste management practices or incur additional costs.

Other

As a result of their age, many of our plants contain significant amounts of asbestos insulation, other asbestos containing materials, as well as lead-based paint. We believe we properly manage and dispose of such materials in compliance with state and federal rules. See note 16(b) to our consolidated financial statements.

We do not believe we have any material liabilities or obligations under the Comprehensive Environmental Response Corporation and Liability Act of 1980 or similar state laws. These laws impose clean up and restoration liability on owners and operators of plants from or at which there has been a release or threatened release of hazardous substances, together with those who have transported or arranged for the disposal of those substances.

Employees

As of December 31, 2009, we had 2,239 full-time and part-time employees. Of these employees, 1,017 are covered by collective bargaining agreements, which expire on various dates from March 31, 2010 through September 30, 2014. The following table sets forth the number of our employees as of December 31, 2009:

Plant operations	1,807
Corporate	432
Total	2,239

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Executive Officers

Name	Age(1)		Present Position
Mark M. Jacobs		47	President and Chief Executive Officer
David D. Brast		41	Senior Vice President, Commercial Operations and Origination
Rick J. Dobson		51	Executive Vice President and Chief Financial Officer
David S. Freysinger		50	Senior Vice President, Generation Operations
D. Rogers Herndon		41	Executive Vice President, Strategic Planning and Business Development
Michael L. Jines		51	Executive Vice President, General Counsel and Corporate Secretary and Chief Compliance Officer
Thomas C. Livengood		54	Senior Vice President and Controller
Albert H. Myres		46	Senior Vice President, Government and Public Affairs
Karen D. Taylor		52	Senior Vice President, Human Resources and Chief Diversity Officer

(1) Age is as of February 1, 2010.

Mark M. Jacobs has served as our President and Chief Executive Officer since May 2007. Prior to that, he served as our Executive Vice President and Chief Financial Officer from July 2002 to October 2007.

David D. Brast has served as our Senior Vice President, Commercial Operations and Origination since May 2009. Prior to that, he served as Vice President, Commercial Operations and Origination from June 2003 to May 2009.

Rick J. Dobson has served as our Executive Vice President and Chief Financial Officer since October 2007. Prior to that, he served as Senior Vice President and Chief Financial Officer of Novelis Inc., an international aluminum rolling and recycling company, from July 2006 to August 2007 and Senior Vice President and Chief Financial Officer of Aquila, Inc., an electric and natural gas distribution company that also owns and operates generation assets, from October 2002 to July 2006.

David S. Freysinger has served as our Senior Vice President, Generation Operations since January 2004.

D. Rogers Herndon has served as our Executive Vice President, Strategic Planning and Business Development since June 2009. He served as our Senior Vice President, Strategic Planning and Business Development from November 2007 to June 2009. He was Senior Vice President, Commercial Operations and Origination from May 2006 to November 2007. Prior to that, he was a Managing Director for PSEG Energy Resources and Trade from April 2003 to December 2005.

Michael L. Jines has served as our Executive Vice President, General Counsel and Corporate Secretary and Chief Compliance Officer since June 2009. He served as our Senior Vice President, General Counsel and Corporate Secretary from May 2003 to June 2009.

Thomas C. Livengood has served as our Senior Vice President and Controller since May 2005. Prior to that, he served as our Vice President and Controller from August 2002 to May 2005.

Albert H. Myres has served as our Senior Vice President, Government and Public Affairs since December 2007. He served as Shell Oil Corporation’s Chief of Staff and Senior Advisor to the President and Country Chairman from August 2005 to December 2007 and Senior Advisor, Government Affairs from June 2002 to August 2005.

Karen D. Taylor has served as our Senior Vice President, Human Resources since December 2003. In November 2005, she was appointed as our Chief Diversity Officer.

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Available Information

Our principal offices are at 1000 Main, Houston, Texas 77002 (832-357-7000). The following information is available free of charge on our website (http://www.rrienergy.com):

•  Our corporate governance guidelines and standing board committee charters

•  Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports

•  Our business ethics policy

You can request a free copy of these documents by contacting our investor relations department. It is our intention to disclose amendments to, or waivers from, our business ethics policy on our website. No information on our website is incorporated by reference into this Form 10-K. In addition, certain of these materials are available on the SEC’s website at (http://www.sec.gov) or at its public reference room: 100 F Street, NE, Room 1580, Washington, D.C. 20549 (1-800-SEC-0330).

Certifications

We will timely provide the annual certification of our Chief Executive Officer to the New York Stock Exchange. We filed last year’s certification in July 2009. In addition, our Chief Executive Officer and Chief Financial Officer each have signed and filed the certifications under Section 302 of the Sarbanes-Oxley Act of 2002 with this Form 10-K.

Item 1A.   Risk Factors.

We are subject to the following factors that could affect our future performance and results of operations. Also, see “Forward-Looking Statements” on page iii, “Business” in Item 1 and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of this Form 10-K.

Our financial results are subject to market factors beyond our control. We are exposed to the risk of loss if third parties fail to perform their contractual obligations.

Our results of operations, financial condition and cash flows are significantly impacted by the prevailing demand and market prices for electricity, capacity, fuel and emission allowances over which we have no control. Demand or market prices can fluctuate dramatically in response to many factors, including seasonal and weather conditions; changes in the prices of related commodities; changes in law and regulation; regulatory intervention (including the imposition of price limitations, bidding rules or similar mechanisms); market illiquidity; transmission constraints; environmental limitations; generation unit outages; fuel supply issues; economic conditions; and other events.

Current economic conditions may result in ongoing reduced demand for electricity, commodity price volatility, increased risk of third-party default, changes in law or regulation and other events. We depend on fuel sources and fuel supply facilities owned and operated by third parties to supply our plants. We depend on power transmission facilities owned and operated by third parties to deliver electricity to our customers. We may incur losses if third parties default on their contractual obligations, such as obligations to buy or sell electricity, capacity, fuel or emission allowances; or provide us with fuel and related transportation services or power transmission services. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Risk” in Item 7 of this Form 10-K and note 2(c) to our consolidated financial statements.

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We operate in relatively immature markets that are characterized by elements of both competitive and regulated markets. Changes in the regulatory environment in which we operate could adversely affect our ability to sell at market rates, or the cost, manner or feasibility of conducting our business.

We operate in a regulatory environment that is undergoing varying restructuring initiatives. In many instances, the regulatory structures governing the electricity markets are still evolving, creating gaps in the regulatory framework and associated uncertainty. In addition, existing regulations may be revised or reinterpreted and new laws and regulations may be adopted or become applicable to our plants or our commercial activities. We cannot predict the future direction of these initiatives or the ultimate effect that this changing regulatory environment will have on our business. However, future regulatory restrictions, regulatory or political intervention or changes in laws and regulations, may constrain our ability to sell at market prices or otherwise have an adverse effect on our business.

The majority of our generation is sold at market prices under market-based rate authority granted by the FERC. Even where market-based rate authority has been granted, the FERC can impose various forms of market mitigation measures, including price caps and operating restrictions. If we lost our market-based rate authority, we may incur additional costs and risks. We also participate in regional power pools, reliability councils, transmission organizations and capacity auctions. Changes in the rules governing such auctions or groups and/or in the composition of such groups may have an adverse effect on our business. Participation in RTOs is voluntary, and transmission owning companies or other RTO members may exit an RTO so long as they do so in compliance with the applicable FERC tariffs and agreements and FERC approval. See “Business—Markets” in Item 1 of this Form 10-K.

Our costs of compliance with environmental laws are significant and can affect our future operations and financial results.

We are subject to extensive and evolving environmental regulations, particularly in regard to our coal- and oil-fired plants. Failure to comply with environmental requirements could require us to shut down or reduce production at our plants or could create liability exposure. We incur significant costs in complying with these regulations and, if we fail to comply, could incur significant penalties. Our cost estimates for environmental compliance are based on existing regulations or our view of reasonably likely regulations, and our assessment of the costs of labor and materials and the state of evolving technologies. Our decision to make these investments is often subject to future market conditions. Changes to the preceding factors, new or revised environmental regulations, litigation and new legislation and/or regulations, as well as other factors, could cause our actual costs to vary outside the range of our estimates, further constrain our operations, increase our environmental compliance costs and/or make it uneconomical to operate some of our plants. We also may be subject to claims for the environmental liabilities associated with plants even if a prior owner caused the liabilities.

We are required to surrender emission allowances equal to emissions of specific substances to operate our plants. Surrender requirements may require purchase of allowances which may be unavailable or only available at costs that would make it uneconomical to operate our plants.

Federal, state and regional initiatives to regulate greenhouse gas emissions could have a material impact on our financial performance and condition. The actual impact will depend on a number of factors, including the overall level of greenhouse gas reductions required under any such regulations, the final form of the regulations or legislation, and the price and availability of emission allowances if allowances are a part of the final regulatory framework. See “Business—Environmental Matters” in Item 1, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business Overview” in Item 7 of this Form 10-K and note 16(b) to our consolidated financial statements.

The operation of plants involves significant risks that could limit, interrupt or shut down operations and increase our costs.

We are exposed to risks relating to the breakdown of our plant equipment or processes; performance below expected levels of output or efficiency; fuel supply or transportation failures or interruptions;

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maintenance or construction delays or cost overruns; shortages of or delays in obtaining equipment, material and labor; operational restrictions resulting from environmental limitations and governmental interventions; as well as other risks that could increase our cost of doing business or could cause extended and/or unplanned outages of our plants. If a plant fails or is unavailable, we may have to purchase replacement power from third parties at higher prices and/or we may be subject to contractual or other penalties. In addition, many of our plants are old and require significant maintenance expenditures.

We are party to collective bargaining agreements with labor unions at several of our plants. If our workers were to engage in a strike, work stoppage or other slowdown, other employees were to become unionized or the terms and conditions in future labor agreements were renegotiated, we could experience a significant disruption in our operations and higher ongoing labor costs. Similarly, we have an aging workforce at a number of our plants creating potential knowledge and expertise gaps as those workers retire.

To operate our plants, we must obtain and maintain various permits, licenses, approvals and certificates from governmental agencies. Our failure to obtain or maintain any necessary governmental permits or licenses or to satisfy these legal requirements, including environmental compliance provisions, could limit our ability to operate our plants.

We have insurance, subject to limits and deductibles, covering some types of physical damage and business interruption related to our plants. However, this insurance may not always be available on commercially reasonable terms. In addition, there is no assurance that insurance proceeds will be sufficient to cover all losses, insurance payments will be timely made or the policies themselves will be free of substantial deductibles.

Competition and alternative technologies in wholesale power markets may have a material adverse effect on our financial condition, results of operations and cash flows.

We compete with non-utility generators, regulated utilities, and other energy service companies in the sale of our products and services, as well as in the procurement of fuel and transmission services. We compete primarily on the basis of price and service. Our competitors may have greater access to capital and lower cost structures and/or more efficient power generation facilities. In addition, aggregate demand for power may be met by generation capacity based on competing technologies, as well as power generation facilities fueled by alternative or renewable energy sources. Regulatory initiatives designed to enhance renewable generation could increase competition from these types of facilities.

Our largely unhedged position may cause volatile financial results and any hedging may be ineffective.

We are largely unhedged based on our views of the market. Our uncontracted generation is generally sold on the spot market at current market prices; however, we must maintain coal supply to operate. Therefore, fluctuating commodity prices can affect our financial results and financial position, either favorably or unfavorably. To the extent we hedge, our hedges may not be effective as a result of basis price differences, transmission issues, price correlation, volume variations, margins being compressed as a result of market prices behaving differently than expected or other factors. See note 2(e) to our consolidated financial statements and “Quantitative and Qualitative Disclosures About Market Risk” in Item 7A of this Form 10-K.

Changes in the wholesale energy market or in our plant operations could result in impairments.

If our outlook for the wholesale energy market changes negatively, or if our ongoing evaluation of our business results in decisions to mothball, retire or dispose of plants, we could have impairment charges related to our fixed assets. These evaluations involve significant judgments about the future. Actual future market prices, project costs and other factors could be materially different from our current estimates. Furthermore, increasing environmental regulatory requirements could result in plants being removed from service or derated. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business Overview” in Item 7 of this Form 10-K and note 4 to our consolidated financial statements.

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Significant events beyond our control, such as weather-related problems or acts of terrorism, could have a material adverse effect on our business.

The uncertainty associated with events beyond our control, such as significant weather events, including unseasonable conditions and possible effects from climate change, if any, and the risk of future terrorist activity, may affect our results of operations and financial condition in unpredictable ways. These events could result in a decrease in the demand for power, adverse changes in the insurance markets, disruptions of power and fuel markets or hedging transactions becoming ineffective. In addition, significant weather events or terrorist actions could damage or shut down our plants or the fuel and fuel supply facilities or the power transmission facilities upon which our plants are dependent. These events could also adversely affect the United States economy, create instability in the financial markets and, as a result, have an adverse effect on our ability to access capital on terms and conditions acceptable to us. We are also highly dependent on our specialized computer and communications systems, the operation of which could be interrupted by fire, flood, power loss, computer viruses or similar disruptions. There is no guarantee that our backup systems and disaster recovery plans will be effective. Our business interruption insurance may be limited, as discussed above under “—The operation of plants involves significant risks that could limit, interrupt or shut down operations and increase our costs.”

Our borrowing levels, debt service obligations and restrictive covenants may adversely affect our business. We may be vulnerable to reductions in our cash flow.

As of December 31, 2009, we had total debt of $2.4 billion and off-balance sheet RRI Energy Mid-Atlantic Power Holdings, LLC (REMA) leases of $423 million (collectively referred to below as debt or debt service).

•  We must dedicate a portion of our cash flows to debt service, which reduces the amount of cash available for other business purposes;

•  The covenants in our debt agreements restrict our ability to, among other things, obtain additional financing, make investments or acquisitions, create additional liens on our assets and take other actions to react to changes or opportunities in our business;

•  Our revolving credit facilities require that we maintain a level of net secured debt not to exceed four times our adjusted EBITDA (as defined in the facilities);

•  If we do not comply with the payment and other material covenants under our debt agreements, we could be required to repay our debt immediately and, in the case of our revolving credit facilities, the commitment to lend us money could terminate; and

•  Our debt levels and credit ratings may affect the evaluation of our creditworthiness by suppliers or customers, which could put us at a competitive disadvantage to competitors with less debt or investment grade credit ratings.

If we were unable to generate sufficient cash flows, access funds from operations or raise cash from other sources, we would not be able to meet our debt service and other obligations. These situations could result from adverse developments in the economy or in the power, fuel or capital markets, a disruption in our operations or those of third parties, or other events adversely affecting our cash flows and financial performance.

Lawsuits, regulatory proceedings and tax proceedings could adversely affect our future financial results.

From time to time, we are named as a party to, or our property is the subject of, lawsuits, regulatory proceedings or tax proceedings. These proceedings involve highly subjective matters with complex factual and legal questions. Their outcome is uncertain. Any claim that is successfully asserted against us could result in significant damage claims and other losses. Even if we prevail, any proceedings could be costly and time-consuming, could divert the attention of our management and key personnel from our business operations and

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could result in adverse changes in our insurance costs, which could adversely affect our financial condition, results of operations or cash flows. See notes 14, 16 and 17 to our consolidated financial statements.

If we acquire or develop additional plants, dispose of existing plants or combine with other businesses, we may incur additional costs and risks.

We may seek to purchase or develop additional plants, dispose of existing plants, or combine with other businesses. There is no assurance that these efforts will be successful. In addition, these activities involve risks and challenges, including identifying suitable opportunities, obtaining required regulatory and other approvals, integrating acquired or combined operations with our own, and increasing expenses and working capital requirements. Furthermore, in any sale, we may be required to indemnify a purchaser against liabilities. To finance future acquisitions, we may be required to issue additional equity securities or incur additional debt. Obtaining such additional financing is dependent on numerous factors, including general economic and capital market conditions, credit availability from financial institutions, the covenants in our debt agreements, and our financial performance, cash flow and credit ratings. We cannot make any assurances that we would be able to obtain such additional financing on commercially reasonable terms or at all.

Item 1B.   Unresolved Staff Comments.

None.

Item 2.   Properties.

Our principal executive offices are leased through 2018, subject to two five-year renewal options. Our plants are described under “Business—Operations” in Item 1 of this Form 10-K. We believe that our properties are adequate for our present needs. We have satisfactory title, rights and possession to our owned facilities, subject to exceptions, which, in our opinion, would not have a material adverse effect on the use or value of the facilities.

Item 3.   Legal Proceedings.

For a description of our material pending legal and regulatory proceedings and settlements, see notes 16 and 17 to our consolidated financial statements.

Item 4.   Submission of Matters to a Vote of Security Holders.

None.

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PART II

Item 5.   Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock trades on the New York Stock Exchange under the ticker symbol “RRI.” On February 11, 2010, we had 33,948 stockholders of record. The closing price of our common stock on December 31, 2009 was $5.72. We have never paid dividends. Some of our debt agreements restrict the payment of dividends. See note 7 to our consolidated financial statements.

	Market Price
	High		Low
2009:
First Quarter	$	7.38	$	2.03
Second Quarter	$	6.23	$	3.03
Third Quarter	$	7.64	$	4.44
Fourth Quarter	$	7.21	$	4.76
2008:
First Quarter	$	26.74	$	18.06
Second Quarter	$	28.06	$	20.47
Third Quarter	$	24.15	$	4.94
Fourth Quarter	$	7.60	$	2.77

The following line graph compares the yearly percentage change in our cumulative total stockholder return on common stock with cumulative total return of a broad equity market index (Standard & Poor’s 500 Stock Index), the cumulative total return of a group of our peer companies comprised of Allegheny Energy, Inc., Calpine Corporation, Dynegy Inc., Mirant Corporation, NRG Energy, Inc. and PPL Corporation, and the cumulative total return of a group of peer companies we used for 2008, comprised of Calpine Corporation, Constellation Energy Group, Inc., Dominion Resources, Inc., Dynegy Inc., Exelon Corporation, Mirant Corporation, NRG Energy, Inc., Sempra Energy and TXU Corp. In 2009, we changed our group of peer companies following the sale of our former retail business. This stock price performance graph is furnished in this Form 10-K and is not filed, as permitted by 17 CFR 229.201(e).

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Item 6.   Selected Financial Data.

	2009			2008			2007			2006			2005
	(1)(2)(3)(4)			(1)(2)(3)(5)(6)			(1)(2)(3)(7)(8)			(1)(2)(3)(9)(10)			(1)(2)(3)(11)
	(in millions)
Statements of Operations Data:
Revenues	$	1,825		$	3,394		$	3,203		$	3,040		$	3,068
Operating income (loss)		(413	)		201			(10	)		(207	)		(591	)
Loss from continuing operations		(479	)		(110	)		(202	)		(374	)		(579	)
Cumulative effect of accounting changes, net of tax		—			—			—			1			1
Net income (loss)		403			(740	)		365			(328	)		(331	)
	2009			2008			2007			2006			2005
	(1)(2)			(1)(2)(3)(5)(6)(7)			(1)(2)(7)(8)			(1)(2)(9)(10)			(1)(2)(11)
Diluted Earnings (Loss) per Share:
Loss from continuing operations	$	(1.36	)	$	(0.32	)	$	(0.59	)	$	(1.22	)	$	(1.91	)
	2009			2008			2007			2006			2005
	(1)(2)(12)(13)			(1)(2)(5)(6)(12)(13)			(1)(2)(7)(8)(10)(12)(13)			(1)(2)(9)(11)(12)(13)			(1)(2)(12)(13)
	(in millions)
Statements of Cash Flow Data:
Cash flows from operating activities	$	193		$	183		$	762		$	1,276		$	(917	)
Cash flows from investing activities		154			216			(179	)		1,057			306
Cash flows from financing activities		(509	)		(45	)		(292	)		(1,957	)		594
	December 31,
	2009			2008			2007			2006			2005
	(1)(2)(14)			(1)(2)			(1)(2)			(1)(2)			(1)(2)(15)
	(in millions)
Balance Sheet Data:
Total assets	$	7,461		$	10,722		$	11,373		$	11,827		$	13,569
Current portion of long-term debt and short-term borrowings(16)		405			13			52			355			339
Long-term debt(16)		1,950			2,610			2,642			2,917			4,056
Stockholders’ equity		4,238			3,778			4,477			3,950			3,864

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(1)	We sold or transferred the following operations, which have been classified as discontinued operations: Desert Basin, European energy, Orion Power’s hydropower plants, Liberty, Ceredo, Orion Power’s New York plants and our retail energy business. We sold the following operations, which are included in continuing operations: REMA hydropower plants in April 2005, landfill-gas fueled power plants in July 2005, our El Dorado investment in July 2005 and our Bighorn plant in October 2008.
(2)	We deconsolidated Channelview in August 2007 and sold its assets in July 2008. Channelview emerged from bankruptcy in October 2009 and we reconsolidated the entities at that time.
(3)	During 2009, 2008, 2007, 2006 and 2005, we had net gains on sales of assets and emission and exchange allowances of $22 million, $93 million, $26 million, $159 million and $168 million, respectively.
(4)	During 2009, we recorded non-cash long-lived assets impairments of $211 million related to our New Castle and Indian River plants.
(5)	During 2008, we recorded a non-cash goodwill impairment charge of $305 million related to our historical wholesale energy segment.
(6)	During 2008, we recorded $37 million in expenses and paid $34 million for Western states litigation and similar settlements relating to natural gas cases.
(7)	During 2007, we recorded and paid a $22 million charge related to resolution of a 2004 indictment for alleged violations of the Commodity Exchange Act, wire fraud and conspiracy charges.
(8)	During 2007, we recorded $73 million in debt extinguishments expenses and expensed $41 million of deferred financing costs related to accelerated amortization for refinancings and extinguishments.
(9)	During 2006, we recorded $37 million in debt conversion expense.
(10)	During 2006, we recorded a $35 million charge (paid in 2007) related to a settlement of certain class action natural gas cases relating to the Western states energy crisis.
(11)	During 2005, we recorded charges of $359 million relating to various settlements associated with the Western states energy crisis, which were paid during 2006.
(12)	During 2009, 2008, 2007, 2006 and 2005, we had net cash proceeds from sales of assets of $36 million, $527 million, $82 million, $1 million and $149 million, respectively.
(13)	During 2009, 2008, 2007, 2006 and 2005, we had net proceeds from sales of (purchases of) emission and exchange allowances of $(3) million, $(19) million, $(85) million, $183 million and $89 million, respectively.
(14)	See note 15 to our consolidated financial statements for discussion of our contingencies.
(15)	The balance sheet data for total assets as of December 31, 2005 has not been reclassified for the adoption of accounting guidance relating to the offsetting of amounts for contracts with a single counterparty as it was impracticable to reasonably retrieve and reconstruct the historical information due to migration of data driven by a system conversion.
(16)	Amounts exclude debt related to discontinued operations for December 31, 2008, 2007, 2006 and 2005.

Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Business Overview

Strategy.  We provide energy, capacity, ancillary and other energy services to wholesale customers in competitive power generation markets in the United States. Our objective is to be the best performing, best positioned generator in competitive electricity markets.

The power generation industry is deeply cyclical and capital intensive. Given the nature of the industry, we believe scale and diversity are important long term. Given these beliefs, our strategy is to:

•  Maintain a capital structure that positions us to manage through the cycles

•  Focus on operational excellence

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•  Employ a flexible plant-specific operating model through the cycle

•  Utilize a disciplined capital investment approach

•  Create value from industry consolidation

The current market environment is challenging given the uncertainty in the financial markets, possible legislative and regulatory environmental matters and the pace of economic and power demand recovery. Additionally, current commodity prices and spreads are depressed relative to historical levels. While we believe these conditions will improve, the timing is uncertain. Our primary focus is on managing the risks of operating in this current environment.

We have taken a number of actions to navigate the current market challenges, capture the value of our existing assets and position us for the longer term market recovery, while maximizing cash flow and building ample liquidity. Some of these actions include:

•  Selling the retail business

•  Focusing on operating efficiency and effectiveness

•  Implementing flexible plant-specific operating models

•  Implementing a modest hedging program to achieve a high probability of achieving free cash flow breakeven or better even if market conditions deteriorate further

We are regularly assessing the impact on our business of a wide variety of economic and commodity price scenarios, and believe we have the ability to operate through an extended downturn, if that should occur.

Key Earnings Drivers.  Our financial results are significantly impacted by supply and demand fundamentals in the regions in which we operate as well as the spread between gas and coal prices. Plants with lower costs dispatch ahead of higher cost plants to meet demand, with the price of electricity being set by the last plant dispatched.

The specific factors that drive our margins include the prices of power, capacity, natural gas, coal and fuel oil, the cost of emission allowances and transmission, as well as weather and economic factors, many of which are volatile. Our ability to control these factors is limited, and in most instances, the factors are beyond our control. We have the most control over the percentage of time that our plants are available to run when it is economical for them to do so (commercial capacity factor). Our key earnings drivers and various factors that affect these earnings drivers include:

Economic generation (amount of time our plants are economical to operate)

•  Supply and demand fundamentals

•  Plant fuel type and efficiency

•  Absolute and relative cost of fuels used in power generation

Commercial capacity factor (generation as a percentage of economic generation)

•  Operations excellence—effectiveness

•  Maintenance practices

•  Planned and unplanned outages

Unit margin

•  Supply and demand fundamentals

•  Commodity prices and spreads

•  Plant fuel type and efficiency

Other margin (primarily capacity sales)

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•  Supply and demand fundamentals

•  Power purchase agreements sold to others

•  Ancillary services

•  Equipment performance

Costs

•  Operating efficiency

•  Maintenance practices

•  Generation asset fuel type

•  Planned and unplanned outages

Hedges

•  Hedging strategy

•  Volumes

•  Commodity prices

•  Effectiveness

Flexible Plant-Specific Operating Model.  We have different operating approaches for our plants. These operating approaches are determined by each plant’s condition, environmental controls, profitability, market rules, upside potential and value drivers. We have separated our plants into four groups for the purpose of developing an operating model.

•  Long-term value—This part of our fleet, representing approximately 2,500 MW, is well positioned to generate revenue for the foreseeable future, and we would expect that little environmental investment will be needed in future years. We plan to invest and manage these plants for current and long-term profitability for both capacity and energy revenues. Our plants in this group are: Cheswick, Conemaugh, Keystone, Seward and Hunterstown and their combined open gross margin was $265 million, $474 million and $381 million during 2009, 2008 and 2007, respectively.

•  Long-term capacity resource—These plants, representing approximately 4,400 MW, are also well positioned to generate revenue for the foreseeable future, and we expect little future environmental investment. We plan to invest in this part of our fleet for long-term profitability from capacity and/or power purchase agreements. Our plants in this group are: Aurora, Blossburg, Brunot Island, Hamilton, Mountain, Orrtanna, Shawnee, Tolna, Warren, Shelby, Coolwater, Ellwood, Etiwanda, Choctaw and Osceola and their combined open gross margin was $158 million, $147 million and $146 million during 2009, 2008 and 2007, respectively.

•  Near-term profit/controls—These plants, representing approximately 5,400 MW, are well positioned to generate revenue in the current environment but may require further investment in environmental controls. We expect to maintain near-term profitability and preserve our options for supply/demand recovery and/or improved gas-coal spreads in this group of plants. We may install environmental controls in the future depending on environmental regulations and market conditions. Our plants in this group are: Portland, Shawville, Titus, Avon Lake, Gilbert, Glen Gardner, Sayreville, Werner, Mandalay and Ormond Beach and their combined open gross margin was $328 million, $474 million and $482 million during 2009, 2008 and 2007, respectively.

•  Restore profit—This part of our fleet, representing approximately 1,600 MW, faces lower levels of profitability in the current environment. We will minimize spending, improve profitability and preserve our options for supply/demand recovery and/or improved gas-coal spreads in these plants. Our plants in this group are: Elrama, New Castle, Niles and Indian River and their combined open gross margin was $77 million, $125 million and $164 million during 2009, 2008 and 2007, respectively.

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As described above, the plants comprising each of these four groups are similarly situated particularly with regard to profitability, upside potential and our expectation of future environmental investment based on current market conditions. Therefore, we believe that presenting the amount of open gross margin for each group provides an additional way of viewing our operations and facilitates understanding of the factors and trends affecting our business. The above amounts exclude open gross margin relating to (a) our previously-owned Bighorn plant and Channelview plant ($49 million during 2007), (b) selective commercial strategies not designated to a specific plant but related more to a geographical region ($(3) million, $35 million and $39 million during 2009, 2008 and 2007, respectively) and (c) other insignificant items ($1 million, $1 million and $(2) million during 2009, 2008 and 2007, respectively). See “—Consolidated Results of Operations” for the reconciliations of open gross margin to loss from continuing operations.

Pending Environmental Matters.  We make decisions to invest in environmental capital projects based on relatively certain regulations and the expected economic returns on the capital. As discussed above, we expect future environmental investments would most likely be considered in our near-term profit/controls group of plants.

The EPA has stated that it expects to finalize a new rule to replace CAIR in 2011. Various agencies, including the EPA, are considering other regulations related to national ambient air quality standards and hazardous air pollutants. The following table lists the coal plants in our near-term profit/controls group that may be impacted by this new rule and preliminary estimates, stated in 2009 dollars, of additional investments that we could consider as a result. We expect these estimates will change as more information becomes available regarding the nature and timing of the potential investments.

	NOx Controls		SO2 Controls		Combined
	(preliminary estimates, in millions of 2009 dollars)
Avon Lake	$	150	$	280	$	420
Portland		135		295		415
Shawville		90		235		320
Titus		85		175		255

The impact on our business of these pending regulations and whether we make any of the potential investments is uncertain and depends on the form (whether cap-and-trade or MACT), content and timing of the regulations, the effect of the regulations on wholesale power prices and allowance prices, as well as the cost of controls, profitability of our plants, market conditions at the time and the likelihood of CO₂ regulation. We may choose to not make any of the potential investments listed above.

The costs associated with more stringent environmental air quality requirements may result in coal plants, including some of ours, being retired sooner than currently contemplated. However, any such retirements could contribute to improving supply and demand fundamentals for the remaining fleet. Any resulting increased demand for gas could increase the spread between gas and coal prices, which would also benefit the remaining coal fleet.

Furthermore, the United States Congress is considering legislation that would impose mandatory limitation of CO₂ and other greenhouse gas emissions for the domestic power generation sector. State-specific or regional regulatory initiatives to stimulate CO₂ emission reductions in our industry are increasingly active. The impact on our business of these matters are uncertain and depends on the form and content of resulting regulations, including whether and to what extent allowances are allocated to us, the timing of resulting regulations and their effect on wholesale power prices and allowance prices, the profitability of our plants and market conditions at the time, as well as whether and to what extent there are cost effective control technologies or energy efficiency measures available to reduce emissions at our plants.

If CO₂ legislation or regulation transpires, we expect that the demand for gas and/or renewable sources of energy will increase over time. This could decrease economic generation at coal plants. Implementation of a CO₂ cap-and-trade program in addition to other emission control requirements could increase the likelihood of coal plant retirements.

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Given the uncertainty related to these pending environmental matters, we cannot predict the actual outcome or ultimate impact of these matters on our business. See “—Liquidity and Capital Resources” below, “Business—Environmental Matters” in Item 1A of this Form 10-K and note 16(b) to our consolidated financial statements for further discussion.

Effectiveness and Efficiency Measures for 2010.  Consistent with our flexible plant-specific operating model, our objective is to operate each plant to capture the maximum value at the lowest economical cost over time. We plan to use total margin capture factor to measure our effectiveness of achieving this objective. Total margin capture factor is calculated by dividing open gross margin generated by the plants by the total available open gross margin assuming 100% availability. We plan to measure our efficiency of capturing margin utilizing total cost per MWh generated and total cost per MW of generation capacity. These costs metrics will include operation and maintenance expense (excluding the REMA lease expense) and general and administrative expense as well as maintenance capital expenditures.

Impairments of Long-Lived Assets.  In December 2009, we evaluated each of our plants including the related intangible assets for potential impairments. We determined that two plants’ (New Castle and Indian River) undiscounted cash flows did not exceed the carrying value of the net property, plant and equipment and related intangible assets. Thus, we estimated each plant’s fair value and determined we incurred pre-tax impairment charges of $211 million. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—New Accounting Pronouncements, Significant Accounting Policies and Critical Accounting Estimates” in Item 7 of this Form 10-K and note 4 to our consolidated financial statements for further discussion.

Exit of Retail Business.  In December 2008, we sold our Northeast retail commercial, industrial and governmental/institutional (C&I) contracts. In May 2009, we sold our Texas retail business. In December 2009, we sold our Illinois retail C&I contracts. The sale of the retail business achieved the following important strategic objectives for us:

•  eliminated the need for approximately $2.0 billion of credit support and removed capital requirements associated with contingent collateral requirements, which lowered our overall risk profile

•  enhanced our consolidated balance sheet and improved our liquidity position

Consolidated Results of Operations

2009 Compared to 2008 and 2008 Compared to 2007

Following the sale of our Texas retail business and commencing in the third quarter of 2009, we have four reportable segments: East Coal, East Gas, West and Other. We have presented the segment information in this report on a consistent basis for 2009, 2008 and 2007. See note 20 to our consolidated financial statements.

Our income/loss from continuing operations before income taxes for 2009 compared to 2008 changed by $630 million (income in 2008 of $26 million compared to loss in 2009 of $604 million) primarily due to (a) open gross margin, which decreased by $430 million due to open energy unit margins declining $16/MWh driven by weak commodity prices, weak economic conditions and mild summer and early winter weather and (b) hedges and other items, which changed by $385 million primarily due to out-of-the money coal hedges in 2009 compared to in-the-money coal hedges in 2008. These items were partially offset by (a) the difference between the goodwill impairment of $305 million in 2008 and the long-lived assets impairments of $211 million in 2009 and (b) $45 million of lower operation and maintenance expense primarily attributable to the use of our plant-specific operating model.

Our income/loss from continuing operations before income taxes for 2008 compared to 2007 changed by $388 million (loss in 2007 of $362 million compared to income in 2008 of $26 million) primarily due to (a) hedges and other items, which changed by $337 million primarily due to in-the-money coal hedges in 2008 and lower losses on our closed power hedges, (b) debt extinguishments losses decreased by $112 million, (c) $110 million decrease in interest expense and operation and maintenance expense and (d) $85 million

24

decrease in depreciation and amortization. These items were partially offset by the goodwill impairment in 2008 of $305 million.

										Change			Change
										from 2008			from 2007
	2009			2008			2007			to 2009			to 2008
	(in millions)
East Coal open gross margin(1)	$	425		$	858		$	848		$	(433	)	$	10
East Gas open gross margin(1)		208			187			159			21			28
West open gross margin(1)		133			166			161			(33	)		5
Other open gross margin(1)		60			45			91			15			(46	)
Total(2)		826			1,256			1,259			(430	)		(3	)
Hedges and other items		(152	)		233			(104	)		(385	)		337
Unrealized gains (losses) on energy derivatives		22			(9	)		7			31			(16	)
Operation and maintenance		(550	)		(595	)		(643	)		45			48
General and administrative		(101	)		(122	)		(135	)		21			13
Western states litigation and similar settlements		—			(37	)		(22	)		37			(15	)
Gains on sales of assets and emission and exchange allowances, net		22			93			26			(71	)		67
Goodwill and long-lived assets impairments		(211	)		(305	)		—			94			(305	)
Depreciation and amortization		(269	)		(313	)		(398	)		44			85
Income of equity investment, net		1			1			5			—			(4	)
Debt extinguishments losses		(8	)		(2	)		(114	)		(6	)		112
Other, net		—			5			—			(5	)		5
Interest expense		(186	)		(200	)		(262	)		14			62
Interest income		2			21			19			(19	)		2
Income tax (expense) benefit		125			(136	)		160			261			(296	)
Loss from continuing operations		(479	)		(110	)		(202	)		(369	)		92
Income (loss) from discontinued operations		882			(630	)		567			1,512			(1,197	)
Net income (loss)	$	403		$	(740	)	$	365		$	1,143		$	(1,105	)

(1)	Represents our segment profitability measure.
(2)	See “—Business Overview” for open gross margin by our plant-specific operating model groups.

										Change			Change
										from 2008			from 2007
	2009			2008			2007			to 2009			to 2008
Diluted Earnings (Loss) per Share
Loss from continuing operations	$	(1.36	)	$	(0.32	)	$	(0.59	)	$	(1.04	)	$	0.27
Income (loss) from discontinued operations		2.51			(1.81	)		1.66			4.32			(3.47	)
Net income (loss)	$	1.15		$	(2.13	)	$	1.07		$	3.28		$	(3.20	)

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     Revenues.

										Change			Change
										from 2008			from 2007
	2009			2008			2007			to 2009			to 2008
	(in millions)
Third-party revenues	$	1,869		$	3,142		$	3,044		$	(1,273	)(1)	$	98	(2)
Revenues—affiliates		—			253	(3)		127	(3)		(253	)		126
Unrealized gains (losses) on energy derivatives		(44	)		(1	)		32			(43	)(4)		(33	)(5)
Total revenues	$	1,825		$	3,394		$	3,203		$	(1,569	)	$	191

(1)	Decrease primarily due to (a) lower power and natural gas sales prices and (b) lower power sales volumes. These decreases were partially offset by an increase in natural gas sales volumes.
(2)	Increase primarily due to (a) higher power and natural gas sales prices and (b) higher capacity payments. These increases were partially offset by (a) lower natural gas and power sales volumes and (b) lower steam sales due to the deconsolidation of Channelview.
(3)	We deconsolidated Channelview in August 2007. These revenues represent sales of fuel to Channelview prior to the assets being sold in July 2008.
(4)	See footnote 1 under “—Unrealized Gains (Losses) on Energy Derivatives.”
(5)	See footnote 2 under “—Unrealized Gains (Losses) on Energy Derivatives.”

     Cost of Sales.

										Change			Change
										from 2008			from 2007
	2009			2008			2007			to 2009			to 2008
	(in millions)
Third-party costs	$	1,195		$	1,834		$	1,973		$	(639	)(1)	$	(139	)(2)
Cost of sales—affiliates		—			72	(3)		43	(3)		(72	)		29
Unrealized (gains) losses on energy derivatives		(66	)		8			25			(74	)(4)		(17	)(5)
Total cost of sales	$	1,129		$	1,914		$	2,041		$	(785	)	$	(127	)

(1)	Decrease primarily due to (a) lower prices paid for natural gas and (b) lower natural gas and coal volumes purchased. These decreases were partially offset by higher prices paid for coal.
(2)	Decrease primarily due to lower natural gas volumes purchased. This decrease was partially offset by higher prices paid for natural gas and coal.
(3)	We deconsolidated Channelview in August 2007. These cost of sales represent purchases of power from Channelview prior to the assets being sold in July 2008.
(4)	See footnote 1 under “—Unrealized Gains (Losses) on Energy Derivatives.”
(5)	See footnote 2 under “—Unrealized Gains (Losses) on Energy Derivatives.”

Open Gross Margin.  Our segment profitability measure is open gross margin. Open gross margin consists of (a) open energy gross margin and (b) other margin. Open gross margin excludes hedges and other items and unrealized gains/losses on energy derivatives. Open energy gross margin is calculated using the day-ahead and real-time market power sales prices received by the plants less market-based delivered fuel costs. Open energy gross margin is (a)(i) economic generation multiplied by (ii) commercial capacity factor (which equals generation) multiplied by (b) open energy unit margin. Economic generation is estimated generation at 100% plant availability based on an hourly analysis of when it is economical to generate based on the price of power, fuel, emission allowances and variable operating costs. Economic generation can vary depending on the comparison of market prices to our cost of generation. It will decrease if there are fewer hours when market prices exceed the cost of generation. It will increase if there are more hours when market prices exceed the

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cost of generation. Other margin represents power purchase agreements, capacity payments, ancillary services revenues and selective commercial strategies relating to optimizing our assets.

								Change			Change
								from 2008			from 2007
	2009		2008			2007		to 2009			to 2008
East Coal
Open energy gross margin	$	239	$	719		$	778	$	(480	)(1)	$	(59	)(2)
Other margin		186		139			70		47	(3)		69	(4)
Open gross margin	$	425	$	858		$	848	$	(433	)	$	10
East Gas
Open energy gross margin	$	20	$	42		$	50	$	(22	)(5)	$	(8	)
Other margin		188		145			109		43	(4)		36	(6)
Open gross margin	$	208	$	187		$	159	$	21		$	28
West
Open energy gross margin	$	14	$	(1	)	$	20	$	15	(7)	$	(21	)(8)
Other margin		119		167			141		(48	)(9)		26	(10)
Open gross margin	$	133	$	166		$	161	$	(33	)	$	5
Other
Open energy gross margin	$	—	$	1		$	24	$	(1	)	$	(23	)(11)
Other margin		60		44			67		16	(12)		(23	)(13)
Open gross margin	$	60	$	45		$	91	$	15		$	(46	)

(1)	Decrease primarily due to (a) lower unit margins (lower power prices partially offset by lower fuel costs) and (b) lower economic generation.
(2)	Decrease primarily due to (a) lower economic generation and (b) lower unit margins (higher fuel costs partially offset by higher power prices). These decreases were partially offset by increased commercial capacity factor due to lower planned and unplanned outages in 2008.
(3)	Increase primarily due to higher RPM capacity payments. This increase was partially offset by lower ancillary payments.
(4)	Increase primarily due to higher RPM capacity payments.
(5)	Decrease primarily due to lower unit margins (lower power prices partially offset by lower fuel costs). This decrease was partially offset by higher economic generation.
(6)	Increase primarily due to higher RPM capacity payments. This increase was partially offset by lower revenue from purchase power agreements.
(7)	Increase primarily due to higher unit margins (lower fuel costs). This increase was partially offset by lower economic generation.
(8)	Decrease primarily due to (a) lower unit margins (higher fuel costs partially offset by higher power prices) and (b) lower economic generation.
(9)	Decrease primarily due to selective commercial strategies, which we did not engage in during 2009.
(10)	Increase primarily due to higher capacity payments.
(11)	Decrease primarily due to lower economic generation related to the deconsolidation of Channelview in August 2007.
(12)	Increase primarily due to (a) higher revenue from power purchase agreements and (b) selective commercial strategies, which we did not engage in during 2009.

27

(13) Decrease primarily due to (a) the deconsolidation of Channelview in August 2007 and (b) selective commercial strategies, which we did not engage in during 2009.

Included in revenues or cost of sales are two items (a) hedges and other items and (b) unrealized gains/losses on energy derivatives that are not included in open gross margin. See notes 2(e), 6 and 20 to our consolidated financial statements for further discussion. The analyses of these items are included below.

Hedges and Other Items.  We may enter selective hedges, including originated transactions, to (a) seek potential value greater than what is available in the spot or day-ahead markets, (b) address operational requirements or (c) seek a specific financial objective. Hedges and other items primarily relate to settlements of power and fuel hedges, long-term natural gas transportation contracts, storage contracts and long-term tolling contracts. They are primarily derived based on methodology consistent with the calculation of open energy gross margin in that a portion of this item represents the difference between the margins calculated using the day-ahead and real-time market power sales prices received by the plants less market-based delivered fuel costs and the actual amounts paid or received during the period.

									Change			Change
									from 2008			from 2007
	2009			2008		2007			to 2009			to 2008
Hedges and other items income (loss)	$	(152	)	$	233	$	(104	)	$	(385	)(1)	$	337	(2)

(1)

Net change primarily due to (a) $482 million decrease due to a decline in results of fuel hedges and sales of excess coal supplies in 2009 as compared to 2008 in our East Coal segment and (b) $60 million decrease due to a decline on gas transportation hedges. These decreases were partially offset by (a) $97 million gain on hedges of generation, (b) $29 million decrease in losses on closed power hedges and (c) $19 million lower market valuation adjustments to fuel inventory due to $19 million in losses in 2009 in our East Coal segment and $38 million in losses in 2008 in our East Gas and Other segments.

(2)

Net change primarily due to (a) $191 million increase in gains on fuel hedges and (b) $137 million decrease in losses on closed power hedges.

Unrealized Gains (Losses) on Energy Derivatives.  We use derivative instruments to manage operational or market constraints and to increase the return on our generation assets. We record in our consolidated statement of operations non-cash gains/losses based on current changes in forward commodity prices for derivative instruments receiving mark-to-market accounting treatment which will settle in future periods. We refer to these gains and losses prior to settlement, as well as ineffectiveness on cash flow hedges, as “unrealized gains/losses on energy derivatives.” In some cases, the underlying transactions being economically hedged receive accrual accounting treatment, resulting in a mismatch of accounting treatments. Since the application of mark-to-market accounting has the effect of pulling forward into current periods non-cash gains/losses relating to and reversing in future delivery periods, analysis of results of operations from one period to another can be difficult.

										Change			Change
										from 2008			from 2007
	2009			2008			2007			to 2009			to 2008
Revenues—unrealized	$	(44	)	$	(1	)	$	32		$	(43	)	$	(33	)
Cost of sales—unrealized		66			(8	)		(25	)		74			17
Net unrealized gains (losses) on energy derivatives	$	22		$	(9	)	$	7		$	31	(1)	$	(16	)(2)

(1)	Net change primarily due to $61 million in gains due to reversal of previously recognized unrealized losses on energy derivatives which settled during the period, partially offset by $30 million in losses from changes in prices on our energy derivatives marked to market.
(2)	Net change primarily due to $79 million in losses due to reversal of previously recognized unrealized gains on energy derivatives which settled during the period, partially offset by $63 million in gains from changes in prices on our energy derivatives marked to market.

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Operation and Maintenance.

							Change			Change
							from 2008			from 2007
	2009		2008		2007		to 2009			to 2008
	(in millions)
Plant operation and maintenance	$	395	$	441	$	476	$	(46	)(1)	$	(35	)(2)
REMA leases		60		60		60		—			—
Taxes other than income and insurance		34		38		41		(4	)		(3	)
Information Technology, Risk and other salaries and benefits		25		22		21		3			1
Commercial Operations		17		20		19		(3	)		1
Severance		6		—		—		6			—
Bighorn (non-plant operations)		—		7		8		(7	)(3)		(1	)(3)
Channelview (non-plant operations)		—		—		8		—			(8	)(4)
Other, net		13		7		10		6			(3	)
Operation and maintenance	$	550	$	595	$	643	$	(45	)	$	(48	)

(1)	Decrease primarily due to (a) $22 million decrease in base O&M primarily due to decreased operations attributable to the use of our plant-specific operating model and cost reduction initiatives and (b) $13 million decrease in outages and projects spending. These decreases were primarily in our East Coal segment.
(2)	Decrease primarily due to (a) $15 million decrease in planned outages and projects largely driven by decreases in our East Coal segment, (b) the deconsolidation of Channelview (which was part of our Other segment) in August 2007 and (c) $6 million decrease in base O&M due to decreased routine maintenance largely driven by decreases in our East Coal segment partially offset by increases in our West segment.
(3)	The Bighorn plant was sold in October 2008.
(4)	We deconsolidated Channelview in August 2007 and sold the plant in July 2008.

General and Administrative.

							Change			Change
							from 2008			from 2007
	2009		2008		2007		to 2009			to 2008
	(in millions)
Salaries and benefits	$	53	$	59	$	64	$	(6	)	$	(5	)
Professional fees, contract services and information systems maintenance		21		29		36		(8	)		(7	)
Rent and utilities		13		15		14		(2	)		1
Legal costs		5		8		9		(3	)		(1	)
Severance		3		—		1		3			(1	)
Other, net		6		11		11		(5	)		—
General and administrative	$	101	$	122	$	135	$	(21	)	$	(13	)

Western States Litigation and Similar Settlements. See notes 16 and 17 to our consolidated financial statements.

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Gains on Sales of Assets and Emission and Exchange Allowances, Net.

							Change			Change
							from 2008			from 2007
	2009		2008		2007		to 2009			to 2008
	(in millions)
CO2 exchange allowances(1)	$	10	$	38	$	—	$	(28	)	$	38
SO2 and NOx emission allowances		7		—		1		7			(1	)
Bighorn plant(2)		3		47		—		(44	)		47
Investment in and receivables from Channelview(3)		2		6		—		(4	)		6
Equipment		—		—		24		—			(24	)
Other, net		—		2		1		(2	)		1
Gains on sales of assets and emission and exchange allowances, net	$	22	$	93	$	26	$	(71	)	$	67

(1)	During 2007, we joined the Chicago Climate Exchange and sold some allowances in 2008 and 2009.
(2)	The Bighorn plant was in our West segment and sold in October 2008.
(3)	In July 2008, we sold the Channelview plant, which was in our Other segment. This amount represents our change in the estimate of the recovery of the net investment in and receivables from Channelview as it was deconsolidated in August 2007.

Goodwill Impairment.  See note 5 to our consolidated financial statements.

Long-lived Assets Impairments.  See note 4 to our consolidated financial statements.

Depreciation and Amortization.

							Change			Change
							from 2008			from 2007
	2009		2008		2007		to 2009			to 2008
	(in millions)
Depreciation on plants	$	226	$	226	$	269	$	—		$	(43	)(1)
Other, net—depreciation		15		15		14		—			1
Depreciation		241		241		283		—			(42	)
Amortization of emission allowances		24		68		110		(44	)(2)		(42	)(3)
Other, net—amortization		4		4		5		—			(1	)
Amortization		28		72		115		(44	)		(43	)
Depreciation and amortization	$	269	$	313	$	398	$	(44	)	$	(85	)

(1)	Decrease primarily due to (a) early retirements of plant components when replacement components are installed for upgrades (from $29 million, primarily in our East Coal and East Gas segments, in 2007 to $4 million in 2008), (b) classification of Bighorn assets (which were in our West segment) as held for sale in April 2008, which requires depreciation to cease and (c) the deconsolidation of Channelview in August 2007.
(2)	Decrease primarily due to (a) lower weighted average cost of SO2 allowances and (b) decrease in SO2 allowances used. The decrease was primarily in our East Coal segment.
(3)	Decrease primarily due to (a) lower weighted average cost of SO2 allowances and (b) decrease in SO2and NOxallowances used. The decrease was primarily in our East Coal segment.

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     Income of Equity Investment, Net.

							Change		Change
							from 2008		from 2007
	2009		2008		2007		to 2009		to 2008
	(in millions)
Sabine Cogen, LP	$	1	$	1	$	5	$	—	$	(4	)
Income of equity investment, net	$	1	$	1	$	5	$	—	$	(4	)

     Debt Extinguishments Losses.

										Change			Change
										from 2008			from 2007
	2009			2008			2007			to 2009			to 2008
	(in millions)
Deferred financing costs—accelerated amortization due to extinguishments	$	(5	)	$	(1	)	$	(41	)	$	(4	)	$	40
Net premium/discount—debt extinguishments losses		(3	)		(1	)		(73	)(1)		(2	)		72
Debt extinguishments losses	$	(8	)	$	(2	)	$	(114	)	$	(6	)	$	112

(1) Includes $21 million consent solicitation fee.

     Other, Net.

									Change			Change
									from 2008			from 2007
	2009		2008			2007			to 2009			to 2008
	(in millions)
Impairment of investments	$	—	$	(2	)	$	(3	)	$	2		$	1
Other, net		—		7			3			(7	)(1)		4
Other, net	$	—	$	5		$	—		$	(5	)	$	5

(1) Decrease primarily due to a recovery of a claim in 2008.

Interest Expense.

										Change			Change
										from 2008			from 2007
	2009			2008			2007			to 2009			to 2008
	(in millions)
Fixed-rate debt	$	206		$	212		$	219		$	(6	)	$	(7	)
Deferred financing costs		7			7			9			—			(2	)
Financing fees expensed		6			8			12			(2	)		(4	)
Channelview		—			—			16			—			(16	)(1)
Variable-rate debt		—			—			14			—			(14	)
Amortization of fair value adjustment of acquired debt		(12	)		(11	)		(11	)		(1	)		—
Capitalized interest(2)		(23	)		(17	)		(4	)		(6	)		(13	)
Other, net		2			1			7			1			(6	)
Interest expense(3)	$	186		$	200		$	262		$	(14	)	$	(62	)

(1)	Decrease due to the deconsolidation of Channelview in August 2007.
(2)	Relates primarily to environmental capital expenditures for SO2 emission reductions at our Cheswick and Keystone plants, which are included in our East Coal segment.

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(3) See notes 7 and 23 to our consolidated financial statements regarding certain debt and related interest expense classified in discontinued operations.

     Interest Income.

							Change			Change
							from 2008			from 2007
	2009		2008		2007		to 2009			to 2008
	(in millions)
Interest on temporary cash investments	$	2	$	15	$	12	$	(13	)(1)	$	3
Net margin deposits		—		2		6		(2	)		(4	)
Other, net		—		4		1		(4	)		3
Interest income	$	2	$	21	$	19	$	(19	)	$	2

(1) Decrease primarily due to significant reduction in money market interest rates.

Income Tax Expense (Benefit). See note 14 to our consolidated financial statements. A reconciliation of the federal statutory income tax rate to the effective income tax rate is:

	2009			2008			2007
Federal statutory rate		(35	)%		35	%		(35	)%
Additions (reductions) resulting from:
Federal tax uncertainties		—			2			(2	)
Federal valuation allowance		16			67			(7	)
State income taxes, net of federal income taxes		(1	)(1)		180	(2)		(4	)
Goodwill impairment		—			201			—
Other, net		(1	)		35	(3)		4
Effective rate		(21	)%		520	%		(44	)%

(1)	Of this percentage, $32 million (5%) relates to an increase in our state valuation allowances.
(2)	Of this percentage, $36 million (142%) relates to an increase in our state valuation allowances.
(3)	Of this percentage, $6 million (23%) relates to write-off of book goodwill due to the sale of our Bighorn plant in October 2008.

Income (Loss) from Discontinued Operations.  See note 23 to our consolidated financial statements.

Liquidity and Capital Resources

Overview.  We are committed to a strong balance sheet and ample liquidity that will enable us to avoid distress in cyclical troughs and access capital markets throughout the cycle. We believe our liquidity has and continues to exceed the level required to achieve this goal. As discussed below, we have used and expect to continue to use some of our cash and cash equivalents to reduce debt. In late 2009, we deployed some of our cash to margin deposits by replacing outstanding letters of credit, which together with our reduction of secured debt, improved our revolver’s financial maintenance covenant ratio.

Debt Reduction.  Our goal for gross debt (total GAAP debt plus our REMA operating leases) is $1.25 billion to $1.75 billion. As of December 31, 2009, we had gross debt of $2.8 billion and GAAP debt of $2.4 billion. The comparable target for total GAAP debt, based on the current balance for our REMA leases of $423 million, is approximately $800 million to $1.3 billion. We believe that the non-GAAP measure gross debt is a useful and relevant measure of our financial obligations and the strength and flexibility of our capital structure.

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On May 1, 2009, we sold our Texas retail business for $363 million in cash, which included the value of the net working capital. We offered a portion of the net proceeds to holders of our senior secured notes and PEDFA bonds. The following table reflects our 2009 debt reduction efforts.

	Senior Secured		PEDFA
	6.75% Notes		Fixed-Rate Bonds		Total
	(in millions)
Net proceeds from sale of Texas retail	$	169	$	92	$	261	(1)
Tender offer		127		2		129	(2)
Open market purchases		92		35		127	(3)
Total	$	388	$	129	$	517

(1)	Purchased at par and all activity is classified as discontinued operations.
(2)	Total consideration paid was $132 million.
(3)	Total consideration paid was $127 million.

In the future, we could use a variety of means to achieve our gross debt goal, including retirements at maturity (Orion Power Holdings, Inc.’s $400 million senior unsecured notes due in May 2010), open market purchases, call provisions and tender offers.

Cash Flows.  During 2009, we used $392 million in operating cash flows from continuing operations, including the net increase in margin deposits of $256 million (cash outflow). See “—Historical Cash Flows” for further detail of our cash flows from operating activities and explanation of our $158 million and $248 million use of cash from investing activities from continuing operations and use of cash from financing activities from continuing operations, respectively, during 2009.

Sources of Liquidity and Capital Resources

Our principal sources of liquidity and capital resources are cash and cash equivalents on hand, cash flows from operations, unused borrowing capacity and letters of credit capacity. We expect these sources will be adequate to meet our liquidity needs in 2010.

As of February 11, 2010, we had total available liquidity of $1.7 billion, comprised of cash and cash equivalents ($1.0 billion), unused borrowing capacity ($500 million) and letters of credit capacity ($169 million).

As discussed under “—Business Overview—Strategy,” our current market environment is challenged. Commodity prices and power demand were down in 2009 and remain low relative to recent history. However, we have fixed commitments to receive RPM capacity payments through May 2013 and power purchase and capacity agreement payments through 2014 totaling $1.8 billion, of which $555 million relates to 2010. See note 15 to our consolidated financial statements. See “Business—Operations” in Item 1 of this Form 10-K for revenues by type and by reportable segment for 2009, 2008 and 2007.

We continue to monitor our business and hedging with the goal of at least breaking even on a free cash flow basis in the event of a sustained depressed commodity price environment. Based on our assessment of the economic environment and volatility in commodity markets, we have hedged, with swaps, approximately 33% and 31% of estimated power generation from our PJM coal plants (which are in our East Coal segment) for 2010 and 2011 (based on MWh), respectively. We have hedged an additional 1% and 7% of this estimated power generation for 2010 and 2011, respectively, with financial options to retain the energy margin upside for market improvements. We consider free cash flow to be operating cash flow from continuing operations, adjusted for capital expenditures, net sales (purchases) of emission and exchange allowances and changes in net margin deposits.

If additional liquidity is required, it could be sourced from collateral structures, borrowings, net proceeds from asset sales or securities offerings. We cannot make any assurances that we would be able to obtain such additional liquidity on commercially reasonable terms or at all. Also, as discussed in note 7 to our consolidated

33

financial statements, there are certain restrictive covenants and other contractual restrictions related to our ability to obtain additional borrowings.

For further description of factors that could affect our liquidity and capital resources, see “Risk Factors” in Item 1A of this Form 10-K and the discussion of restrictive covenants in note 7 to our consolidated financial statements.

Liquidity and Capital Requirements

Our liquidity and capital requirements primarily reflect our operating costs, capital expenditures (including environmental capital expenditures), collateral requirements, purchases of emissions allowances, discretionary debt extinguishments and debt service. Examples of operating costs include purchases of fuel, plant maintenance costs and payroll costs. Costs associated with litigation, regulatory and tax proceedings can also have a significant impact on our liquidity and cash requirements. For settlements and other costs associated with litigation, regulatory and tax proceedings, see notes 14, 16 and 17 to our consolidated financial statements.

Capital Requirements.  The following table provides information about our actual and estimated future capital requirements:

	2009 Actual			2010 Estimated		2011 Estimated
	(in millions)
Maintenance capital expenditures(1)	$	56		$	48	$	42
Environmental(2)(3)		111			34		20
Capitalized interest		23	(4)		6		—
Total capital expenditures	$	190		$	88	$	62

(1)	Excludes $8 million for 2010 through 2014 for pre-existing environmental conditions and remediation, which have been accrued for in our consolidated balance sheet as of December 31, 2009.
(2)	For a discussion of pending and contingent matters related to environmental regulations, see “—Business Overview—Pending Environmental Matters,” note 16(b) to our consolidated financial statements and “Business—Environmental Matters” in Item 1 of this Form 10-K.
(3)	The environmental amounts for years beyond 2011 could significantly increase subject to finalization of rules and market conditions.
(4)	Relates primarily to environmental capital expenditures for SO2 emission reductions at our Cheswick and Keystone plants.

Contractual Obligations.  The following table includes our obligations and commitments to make future payments under contracts as of December 31, 2009:

			Less than		One to		Three to		More than
Contractual Obligations	Total		One Year		Three Years		Five Years		Five Years
	(in millions)
Debt, including credit facilities(1)	$	3,770	$	569	$	290	$	1,122	$	1,789
Other commodity commitments(2)		972		229		204		139		400
Derivative liabilities		213		152		61		—		—
REMA operating lease payments		934		52		119		128		635
Maintenance agreements obligations		505		31		22		35		417
Other operating lease payments		309		64		98		50		97
Plant and equipment commitments(3)		53		31		7		15		—
Other(4)		291		147		31		31		82
Total contractual cash obligations	$	7,047	$	1,275	$	832	$	1,520	$	3,420

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(1)	Includes interest payments.
(2)	See note 15(c) to our consolidated financial statements.
(3)	These amounts are included in the capital requirements table above under either maintenance capital expenditures or environmental.
(4)	Includes an estimated income tax cash payment of $65 million relating to Western states-related matters, estimated pension and post retirement benefit payments and other contractual obligations.

As of December 31, 2009, we have estimated minimum sales commitments over the next five years, which are not classified as derivative assets and liabilities, of (in millions):

2010	$	555
2011		474
2012		440
2013		198
2014		100
Total(1)	$	1,767

(1) See note 15(c) to our consolidated financial statements.

Contingencies and Guarantees.  We are involved in a number of legal, environmental, tax and other proceedings before courts and are subject to ongoing investigations by certain governmental agencies that could negatively impact our liquidity. See notes 16 and 17 to our consolidated financial statements.

We also enter into guarantee and indemnification arrangements in the normal course of business, none of which is expected to materially impact our liquidity. See note 15(b) to our consolidated financial statements.

Credit Risk

By extending credit to our counterparties, we are exposed to credit risk. For a discussion of our credit risk and policy, see note 2(f) to our consolidated financial statements.

Off-Balance Sheet Arrangements

For 2007, 2008 and 2009, we do not have any off-balance sheet arrangements to report under requirements effective prior to 2010. In connection with related amended accounting guidance for variable interest entities, which is effective as of January 1, 2010, we are assessing (a) our REMA leases for our interests in the Conemaugh, Keystone and Shawville plants (see note 15(a) to our consolidated financial statements) and (b) the tolling agreement at the Vandolah plant whereby we provide our own fuel for operations and take all the power generated (see note 15(a) to our consolidated financial statements). If (a) the single power plant legal entities, which own the plants or our interests in the plants are determined to be variable interest entities, (b) our contracts are determined to be or contain variable interests in those entities and (c) we have the power to direct the activities of the entities that most significantly impact the entities’ economic performance and the obligation to absorb losses of or the right to receive benefits from the entities that could be significant to the entities, we would be required to consolidate the entities, which could materially change our future financial statements.

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Historical Cash Flows

Cash Flows—Operating Activities

2009 Compared to 2008 and 2008 Compared to 2007.

										Change			Change
										from 2008			from 2007
	2009			2008			2007			to 2009			to 2008
	(in millions)
Operating income (loss)	$	(413	)	$	201		$	(10	)	$	(614	)	$	211
Goodwill and long-lived assets impairments		211			305			—			(94	)		305
Depreciation and amortization		269			313			398			(44	)		(85	)
Gains on sales of assets and emission and exchange allowances, net		(22	)		(93	)		(26	)		71			(67	)
Net changes in energy derivatives		(21	)(1)		9	(2)		(7	)(3)		(30	)		16
Western states litigation and similar settlements		—			3	(4)		—	(5)		(3	)		3
Western states litigation and similar settlements payments		(3	)		—	(4)		(35	)(5)(6)		(3	)		35
Margin deposits, net		(256	)		199			286			(455	)		(87	)
Option premiums purchased		(30	)		—			—			(30	)		—
Interest payments		(194	)		(206	)		(300	)		12			94
Change in accounts and notes receivable and accounts payable, net		96			(38	)		(60	)		134			22
Change in inventory		(15	)		(32	)		(22	)		17			(10	)
Income tax payments, net of refunds		(2	)		(12	)		(3	)		10			(9	)
Pension contributions		(20	)		(6	)		(13	)		(14	)		7
Kern refund(7)		3			30			—			(27	)		30
Other, net		5			31			(4	)		(26	)		35
Net cash provided by (used in) continuing operations from operating activities		(392	)		704			204			(1,096	)		500
Net cash provided by (used in) discontinued operations from operating activities		585			(521	)		558			1,106			(1,079	)
Net cash provided by operating activities	$	193		$	183		$	762		$	10		$	(579	)

(1)	Includes unrealized gains on energy derivatives of $22 million.
(2)	Includes unrealized losses on energy derivatives of $9 million.
(3)	Includes unrealized gains on energy derivatives of $7 million.
(4)	We expensed $37 million and paid $34 million in 2008.
(5)	We expensed and paid $22 million in 2007.
(6)	We expensed $35 million in 2006 and paid it in 2007.
(7)	See note 16(c) to our consolidated financial statements.

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Cash Flows Investing Activities

2009 Compared to 2008 and 2008 Compared to 2007.

										Change			Change
										from 2008			from 2007
	2009			2008			2007			to 2009			to 2008
	(in millions)
Capital expenditures(1)	$	(190	)	$	(279	)	$	(175	)	$	89		$	(104	)
Proceeds from sales of assets, net		36			527			82			(491	)		445
Proceeds from sales of emission and exchange allowances		19			42	(2)		7			(23	)		35
Purchases of emission allowances		(22	)		(61	)(3)		(92	)(4)		39			31
Restricted cash		(5	)		1			(6	)		(6	)		7
Other, net		4			6			6			(2	)		—
Net cash provided by (used in) continuing operations from investing activities		(158	)		236			(178	)		(394	)		414
Net cash provided by (used in) discontinued operations from investing activities		312			(20	)		(1	)		332			(19	)
Net cash provided by (used in) investing activities	$	154		$	216		$	(179	)	$	(62	)	$	395

(1)	Relates primarily to environmental capital expenditures for SO2 emission reductions at our Cheswick and Keystone plants, which are included in our East Coal segment. The scrubber project for our Keystone plant was completed in 2009. The scrubber project for our Cheswick plant was halted in mid-2009 with plans to resume in 2010.
(2)	Includes $38 million from sales of CO2 exchange allowances.
(3)	Includes $48 million and $13 million for purchases of SO2 and NOx allowances, respectively.
(4)	Includes $89 million for purchases of SO2 allowances.

Cash Flows—Financing Activities

2009 Compared to 2008 and 2008 Compared to 2007.

										Change			Change
										from 2008			from 2007
	2009			2008			2007			to 2009			to 2008
	(in millions)
Proceeds from issuance of senior unsecured notes	$	—		$	—		$	1,300		$	—		$	(1,300	)
Payments of senior secured notes and PEDFA fixed-rate bonds		(255	)		(58	)		(1,126	)		(197	)		1,068
Net payments on senior secured term loans		—			—			(400	)		—			400
Proceeds from issuances of stock		12			14			41			(2	)		(27	)
Payments of debt extinguishments expenses		(5	)		(1	)		(73	)		(4	)		72
Payments of financing costs		—			—			(31	)		—			31
Other, net		—			—			(3	)		—			3
Net cash used in continuing operations from financing activities		(248	)		(45	)		(292	)		(203	)		247
Net cash used in discontinued operations from financing activities		(261	)		—			—			(261	)		—
Net cash used in financing activities	$	(509	)	$	(45	)	$	(292	)	$	(464	)	$	247

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New Accounting Pronouncements, Significant Accounting Policies and Critical Accounting Estimates

New Accounting Pronouncements

See note 2 to our consolidated financial statements.

Significant Accounting Policies

See note 2 to our consolidated financial statements.

Critical Accounting Estimates

We make a number of estimates and judgments in preparing our consolidated financial statements. These estimates can differ from actual results and have a significant impact on our recorded assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. We consider an estimate to be a critical accounting estimate if it requires a high level of subjectivity or judgment and a significant change in the estimate would have a material impact on our financial condition or results of operations. Each critical accounting estimate affects our four reportable segments, East Coal, East Gas, West and Other, unless indicated otherwise. However, as the impacts from our critical accounting estimates to our statements of operations are typically not included as a component of open gross margin, they do not typically impact our segments profitability measure. The Audit Committee of our Board of Directors reviews each critical accounting estimate with our senior management. Further discussion of these accounting policies and estimates is in the notes to our consolidated financial statements.

Long-Lived Assets.

We consider the estimate used to assess the recoverability of our long-lived assets (property, plant and equipment and intangible assets) a critical accounting estimate. As of December 31, 2009, we had $4.9 billion of long-lived assets. This estimate affects all segments, which hold 99% of our total net property, plant and equipment and net intangible assets. Our East Coal segment holds the largest portion of our net property, plant and equipment and net intangible assets at 59% of our consolidated total. See notes 2(g), 4 and 5 to our consolidated financial statements.

We evaluate our long-lived assets when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Examples of such events or changes in circumstances are:

•  a significant decrease in the market price of a long-lived asset

•  a significant adverse change in the manner an asset is being used or its physical condition

•  an adverse action by a regulator or legislature or an adverse change in the business climate

•  an accumulation of costs significantly in excess of the amount originally expected for the construction or acquisition of an asset

•  a current-period loss combined with a history of losses or the projections of future losses

•  a change in our intent about an asset from an intent to hold to a greater than 50% likelihood that an asset will be sold or disposed of before the end of its previously estimated useful life

When we believe an impairment condition may have occurred, we are required to estimate the undiscounted future cash flows associated with a long-lived asset or group of long-lived assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities for long-lived assets that are expected to be held and used. Each plant (including its property, plant and equipment and intangible assets) was determined to be its own group.

The determination of impairment is a two-step process, the first of which involves comparing the undiscounted cash flows to the carrying value of the asset. If the carrying value exceeds the undiscounted cash flows, the fair value of the asset must be determined. The fair value of an asset is the price that would be received from a sale of the asset in an orderly transaction between market participants at the measurement

38

date. Quoted market prices in active markets are the best evidence of fair value and are used as the basis for the measurement, when available. In the absence of quoted prices for identical or similar assets, fair value is estimated using various internal and external valuation methods. These methods include discounted cash flow analyses and reviewing available information on comparable transactions.

Key Assumptions.  The following summarizes some of the most significant estimates and assumptions used in evaluating our plant level undiscounted cash flows. The ranges for the fundamental view assumptions are to account for variability by year and region.

	December 31, 2009
Undiscounted Cash Flow Scenarios Weightings:
5-year market forecast with escalation(1)(2)	50%
5-year market forecast with fundamental view(1)	50%
Range of Assumptions in Fundamental View:
Demand for power growth per year	1%-2%
After-tax rate of return on new construction(3)	6.5%-9.5%
Spread between natural gas and coal prices, $/MMBTU(4)	$3-$5

(1)	For each scenario, the first five years of cash flows are the same.
(2)	We assumed an annual 2.5% escalation percentage beyond year five.
(3)	The low to mid part of the range represents natural gas-fired plants’ required returns and the mid to high part of the range represents coal-fired and nuclear plants’ required returns.
(4)	Natural gas and coal prices are prior to transportation costs.

Our Indian River plant is located in Florida where the merchant power market is primarily bilateral. This plant had historically generated most of its revenues and gross margin from power purchase agreements, which expired in 2009. Therefore, we believed it was more meaningful to develop different assumptions for our Indian River plant. We estimated the cash flows and probability weightings around five different scenarios. Four of the scenarios (weighted for a combined 70%) included power purchase agreements for varying time periods and ultimate sale of the plant and the remaining scenario (weighted at 30%) included a sale only.

We estimate the undiscounted cash flows of our plants based on a number of subjective factors, including: (a) appropriate weighting of undiscounted cash flow scenarios, as shown in the table above, (b) forecasts of future power generation margins, (c) estimates of our future cost structure, (d) environmental assumptions, (e) time horizon of cash flow forecasts and (f) estimates of terminal values of plants, if necessary, from the eventual disposition of the assets. We did not include the cash flows associated with our economic hedges in our PJM region (East Coal and East Gas segments) as these cash flows are not specific to any one plant.

Under the 5-year market forecast with escalation scenario, we use the following data: (a) forward market curves for commodity prices as of December 18, 2009 for the first five years, (b) cash flow projections through the plant’s estimated remaining useful life and (c) escalation factor of cash flows of 2.5% per year after year five.

Under the 5-year market forecast with fundamental view scenario, we model all of our plants and those of others in the regions in which we operate using these assumptions: (a) forward market curves for commodity prices as of December 18, 2009 for the first five years; (b) ranges shown in the table above used in developing our fundamental view beyond five years; (c) the markets in which we operate will continue to be deregulated and earn margins based on forward or projected market prices; (d) projected market prices for energy and capacity will be set by the forecasted available supply and level of forecasted demand—new supply will enter markets when market prices and associated returns, including any assumed subsidies for renewable energy, are sufficient to achieve minimum return requirements; (e) minimum return requirements on future construction of new generation facilities, as shown in the table above, will likely be driven or influenced by utilities, which we expect will have a lower cost of capital than merchant generators; (f) various ranges of

39

environmental regulations, including those for SO₂, NO_x and greenhouse gas emissions; and (g) cash flow projections through the plant’s estimated remaining useful life.

Fair Value.  Generally, fair value will be determined using an income approach or a market-based approach. Under the income approach, the future cash flows are estimated as described above and then discounted using a risk-adjusted rate. Under a market-based approach, we may also consider prices of similar assets, consult with brokers or employ other valuation techniques.

The following are key assumptions used in our fair value analyses for our two plants for which the undiscounted cash flows did not exceed the net book value of the long-lived assets.

	New Castle			Indian River
Valuation approach weightings:
Income approach		100	%		100	%
Market-based approach		0	%		0	%
Risk-adjusted discount rate for the estimated cash flows		15	%		15	%

We only used the income approach as we believe no relevant market data exists for these two plants for which we were required to estimate fair value. The discount rates reflect the uncertainty of the plants’ cash flows and their inability to support meaningful amounts of debt, and was determined considering factors such as the potential for future capacity and power purchase agreement revenues and regulatory, commodity and macroeconomic conditions.

We determined that our New Castle plant, which consists of property, plant and equipment, was impaired by $120 million as of December 31, 2009. This impairment was primarily due to the expected levels of low profitability given that the plant would likely require significant environmental capital expenditures in the future under existing and likely environmental regulations. Under the plant-specific operating model, the New Castle plant is in the “restore profit” group. We determined that our Indian River plant, which consists of property, plant and equipment and various intangible assets (water rights, permits and emission allowances), was impaired by $91 million as of December 31, 2009. This impairment was primarily due to a power purchase agreement with a utility in Florida expiring in December 2009 and because of the uncertainty that a replacement power purchase agreement will occur for the foreseeable future. Under the plant-specific operating model, the Indian River plant is in the “restore profit” group. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of this Form 10-K for further discussion of our plant-specific operating model. We believe the remaining net book values of $44 million for New Castle and $52 million for Indian River represent our best estimates of fair values as of December 31, 2009.

Certain disclosures are required about nonfinancial assets and liabilities measured at fair value on a nonrecurring basis. This applies to our long-lived assets for which we were required to determine fair value. A fair value hierarchy exists for inputs used in measuring fair value that maximizes the use of observable inputs (Level 1 or Level 2) and minimizes the use of unobservable inputs (Level 3) by requiring that the observable inputs be used when available. See note 2(d) to our consolidated financial statements for further discussion about the three levels. These assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and affects the valuation of fair value and the assets’ placement within the fair value hierarchy levels.

	December 31,						2009
	2009						Impairment
	Level 1		Level 2		Level 3		Charges
	(in millions)
New Castle property, plant and equipment(1)	$	—	$	—	$	44	$	120
Indian River property, plant and equipment, water rights, permits and emission allowances(2)		—		—		52		91
Total	$	—	$	—	$	96	$	211

40

(1)	New Castle is in our East Coal segment.
(2)	Indian River is in our Other segment.

Effect if Different Assumptions Used.  The estimates and assumptions used to determine whether long-lived assets are recoverable or whether impairment exists are subject to high degree of uncertainty. Different assumptions as to power prices, fuel costs, our future cost structure, environmental assumptions and remaining useful lives and ultimate disposition values of our plants would result in estimated future cash flows that could be materially different than those considered in the recoverability assessments as of December 31, 2009 and could result in having to estimate the fair value of other plants.

Use of a different risk-adjusted discount rate would result in fair value estimates for the two plants for which we recorded an impairment in 2009 that could be materially greater than or less than the fair value estimates as of December 31, 2009. Any future fair value estimates for our New Castle and Indian River long-lived assets that are greater than the fair value estimates as of December 31, 2009 will not result in reversal of the 2009 impairment charges.

The undiscounted cash flow scenarios we considered in assessing the recoverability of our long-lived assets are those which we believe are most likely to occur based on market data as of the end of 2009. If we had solely utilized the 5-year market forecast with escalation scenario, the carrying value of four additional plants and related intangible assets ($628 million) would have been greater than the undiscounted cash flows, which would have necessitated fair value estimates for those plants. Alternatively, if we had solely utilized the 5-year market forecast with fundamental view, the carrying value of one additional plant and related intangible assets ($110 million) would have been greater than the undiscounted future cash flows, which would have necessitated fair value estimates for that plant.

The discounted cash flow scenarios we considered in determining the fair values of our New Castle and Indian River long-lived assets are those which we believe are most representative of a market participant view. If we had solely utilized the 5-year market forecast with escalation scenario, the fair value of the New Castle long-lived assets would have been $51 million (resulting in an impairment of $113 million as opposed to $120 million recognized). Alternatively, if we had solely utilized the 5-year market forecast with fundamental view, the fair value of the New Castle long-lived assets would have been $35 million (resulting in an impairment of $129 million as opposed to $120 million recognized). As discussed above for our Indian River plant, if we had only used the two scenarios that lead to the most extreme fair values, the calculated fair value for our Indian River long-lived assets would have ranged from $25 million to $84 million (resulting in an impairment ranging from $118 million to $59 million as opposed to $91 million recognized).

Fair Value—Derivative Assets and Liabilities.

In determining fair value for our derivative assets and liabilities, we generally use the market approach and incorporate assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation techniques.

A fair value hierarchy exists for inputs used in measuring fair value that maximizes the use of observable inputs (Level 1 or Level 2) and minimizes the use of unobservable inputs (Level 3) by requiring that the observable inputs be used when available. Derivative instruments classified as Level 2 primarily include emission allowances futures that are exchanged-traded and over-the-counter (OTC) derivative instruments such as generic swaps, forwards and options. The fair value measurements of these derivative assets and liabilities are based largely on unadjusted indicative quoted prices from independent brokers in active markets who regularly facilitate our transactions. An active market is considered to have transactions with sufficient frequency and volume to provide pricing information on an ongoing basis. Derivative instruments for which fair value is calculated using quoted prices that are deemed not active or that have been extrapolated from quoted prices in active markets are classified as Level 3. For certain natural gas and power contracts, we adjust seasonal or calendar year quoted prices based on historical observations to represent fair value for each month in the season or calendar year, such that the average of all months is equal to the quoted price. A

41

derivative instrument that has a tenor that does not span the quoted period is considered an unobservable Level 3 measurement.

We evaluate and validate the inputs we use to estimate fair value by a number of methods, including validating against market published prices and daily broker quotes obtainable from multiple pricing services. For OTC derivative instruments classified as Level 2, indicative quotes obtained from brokers in liquid markets generally represent fair value of these instruments. We believe these price quotes are executable. Adjustments to the quotes are adjustments to the bid or ask price depending on the nature of the position to appropriately reflect exit pricing and are considered a Level 3 input to the fair value measurement. In less liquid markets such as coal, in which a single broker’s view of the market is used to estimate fair value, we consider such inputs to be unobservable Level 3 inputs. We do not use third party sources that determine price based on market surveys or proprietary models.

We report our derivative assets and liabilities, for which the normal purchase/normal sale exception has not been made, at fair value and consider it to be a critical accounting estimate because these estimates are highly susceptible to change from period to period and are dependent on many subjective factors, including:

•  estimated forward market price curves

•  valuation adjustments relating to time value

•  liquidity valuation adjustments

•  credit adjustments, based on the credit standing of the counterparties and our own non-performance risk

Derivative assets are discounted for credit risk using a yield curve representative of the counterparty’s probability of default. The counterparty’s default probability is based on a modified version of published default rates, taking 20-year historical default rates from Standard & Poor’s and Moody’s and adjusting them to reflect a rolling five-year average. For derivative liabilities, fair value measurement reflects the nonperformance risk related to that liability, which is our own credit risk. We derive our nonperformance risk by applying our credit default swap spread against the respective derivative liability.

To determine the fair value for Level 3 energy derivatives where there are no market quotes or external valuation services, we rely on various modeling techniques. We use a variety of valuation models, which vary in complexity depending on the contractual terms of, and inherent risks in, the instrument being valued. We use both industry-standard models as well as internally developed proprietary valuation models that consider various assumptions such as market prices for power and fuel, price shapes, ancillary services, volatilities and correlations as well as other relevant factors. There is inherent risk in valuation modeling given the complexity and volatility of energy markets. Therefore, it is possible that results in future periods may be materially different as contracts are ultimately settled.

For additional information regarding our derivative assets and liabilities, see notes 2(d), 2(e) and 6 to our consolidated financial statements and “Quantitative and Qualitative Disclosures about Market Risk” in Item 7A of this Form 10-K.

Loss Contingencies.

We record loss contingencies when it is probable that a liability has been incurred and the amount can be reasonably estimated. We consider loss contingency estimates to be critical accounting estimates because they entail significant judgment regarding probabilities and ranges of exposure, and the ultimate outcome of the proceedings is unknown and could have a material adverse effect on our results of operations, financial condition and cash flows. See notes 16 and 17 to our consolidated financial statements.

Deferred Tax Assets, Valuation Allowances and Tax Liabilities.

We estimate (a) income taxes in the jurisdictions in which we operate, (b) deferred tax assets and liabilities based on expected future taxes in the jurisdictions in which we operate, (c) valuation allowances for deferred tax assets and (d) uncertain income tax positions. These estimates are considered critical accounting estimates because they require projecting future operating results (which is inherently imprecise) and

42

judgments related to the ultimate determination of tax positions by taxing authorities. Also, these estimates depend on assumptions regarding our ability to generate future taxable income during the periods in which temporary differences are deductible. See note 14 to our consolidated financial statements for additional information.

We assess our future ability to use federal, state and foreign net operating loss carryforwards, capital loss carryforwards and other deferred tax assets using the more-likely-than-not criteria. These assessments include an evaluation of our recent history of earnings and losses, future reversals of temporary differences and identification of other sources of future taxable income, including the identification of tax planning strategies in certain situations.

Item 7A.   Quantitative and Qualitative Disclosures About Market Risk.

Our primary market risk exposure relates to fluctuations in commodity prices, principally, natural gas, power, coal and oil. As described in notes 2(e) and 2(f) to our consolidated financial statements, we have a risk control framework to manage our risk exposure. However, the effectiveness of this framework can never be completely estimated or fully assured. For example, we could experience volatility in earnings from basis price differences, transmission issues, price correlation issues, volume variation or other factors, including margins being compressed as a result of market prices behaving differently than expected. In addition, a reduction in market liquidity may impair the effectiveness of our risk management practices and resulting hedge strategies. These and other factors could have a material adverse effect on our results of operations, financial condition and cash flows.

Non-Trading Market Risks

Commodity Price Risk

Changes in commodity prices prior to the energy delivery period are inherent in our business. Accordingly, we may enter selective hedges, including originated transactions, to (a) seek potential value greater than what is available in the spot market, (b) address operational requirements or (c) seek a specific financial objective. We use derivative instruments such as futures, forwards, swaps and options to execute our hedge strategy. For further discussion of these strategies and related market risks, see notes 2(e) and 6 to our consolidated financial statements.

As of December 31, 2009, the fair values of the contracts related to our net non-trading derivative assets and liabilities are (asset (liability)):

														2015 and		Total Fair
Sources of Fair Value	2010			2011			2012			2013		2014		Thereafter		Value
	(in millions)
Prices actively quoted (Level 1)	$	23		$	41		$	—		$	—	$	—	$	—	$	64
Prices provided by other external sources (Level 2)		(39	)		(36	)		(13	)		—		—		—		(88	)
Prices based on models and other valuation methods (Level 3)		(23	)		—			—			—		—		—		(23	)
Total mark-to-market non-trading derivatives	$	(39	)	$	5		$	(13	)	$	—	$	—	$	—	$	(47	)

The fair values shown in the table above are subject to significant changes due to fluctuating commodity forward market prices, volatility and credit risk. Market prices assume a functioning market with an adequate number of buyers and sellers to provide liquidity. Insufficient market liquidity could significantly affect the values that could be obtained for these contracts, as well as the costs at which these contracts could be hedged. For further discussion of how we arrive at these fair values, see note 2(d) to our consolidated financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—

43

New Accounting Pronouncements, Significant Accounting Policies and Critical Accounting Estimates—Critical Accounting Estimates” in Item 7 of this Form 10-K.

A hypothetical 10% movement in the underlying energy prices would have the following potential loss impacts on our non-trading derivatives:

As of December 31,		Market Prices	Earnings Impact			Fair Value Impact
			(in millions)
	2009	10% increase	$	(47	)	$	(47	)
	2008	10% decrease		(5	)		(5	)

This risk analysis does not include the favorable impact that the same hypothetical price movements would have on our physical purchases and sales of fuel and power to which the hedges relate. The adverse impact of changes in commodity prices on our portfolio of non-trading energy derivatives would be offset (although not necessarily in the same period) by a favorable impact on the underlying physical transactions, assuming:

•  the derivatives are not closed out in advance of their expected term

•  the derivatives continue to function effectively as hedges of the underlying risk

•  as applicable, anticipated underlying transactions settle as expected

If any of these assumptions cease to be true, we may experience a benefit or loss relative to the underlying exposure.

Interest Rate Risk

As of December 31, 2009 and 2008, we have no variable rate debt outstanding. We earn interest income, for which the interest rates vary, on our cash and cash equivalents and net margin deposits. Our variable rate interest expense and interest income was $0 and $2 million, respectively, during 2009 and $0 and $17 million, respectively, during 2008.

If interest rates decreased by one percentage point from their December 31, 2009 and 2008 levels, the fair values of our fixed rate debt would have increased by $126 million and $110 million, respectively.

Trading Market Risks

Prior to March 2003, we engaged in proprietary trading activities as discussed in note 5 to our consolidated financial statements. Trading positions entered into prior to our decision to exit this business are being closed on economical terms or are being retained and settled over the contract terms. In addition, we have transactions relating to non-core asset management, such as gas storage and transportation contracts not tied to generation assets, which are classified as trading activities.

As of December 31, 2009, the fair values of the contracts related to our legacy trading and non-core asset management positions and recorded as net derivative assets and liabilities are (asset (liability)):

												2015 and		Total Fair
Sources of Fair Value	2010			2011		2012		2013		2014		Thereafter		Value
	(in millions)
Prices actively quoted (Level 1)	$	24		$	—	$	—	$	—	$	—	$	—	$	24
Prices provided by other external sources (Level 2)		—			—		—		—		—		—		—
Prices based on models and other valuation methods (Level 3)		(5	)		—		—		—		—		—		(5	)
Total	$	19		$	—	$	—	$	—	$	—	$	—	$	19

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The fair values in the above table are subject to significant changes based on fluctuating market prices and conditions. See the discussion above related to non-trading derivative assets and liabilities for further information on items that impact our portfolio of trading contracts.

Our consolidated realized and unrealized margins relating to trading activities, including both derivative and non-derivative instruments, are (income (loss)):

	2009			2008
	(in millions)
Realized	$	31		$	11
Unrealized		(11	)		14
Total	$	20		$	25

An analysis of these net derivative assets and liabilities is:

	2009			2008
	(in millions)
Fair value of contracts outstanding, beginning of period	$	30		$	19
Contracts realized or settled		(32	)(1)		(9	)(2)
Changes in fair values attributable to market price and other market changes		21			20
Fair value of contracts outstanding, end of period	$	19		$	30

(1)	Amount includes realized gain of $31 million and deferred settlements of $1 million.
(2)	Amount includes realized gain of $11 million partially offset by deferred settlements of $2 million.

We primarily assess the risk of our legacy trading and non-core asset management positions using a value-at-risk method to maintain our total exposure within limits set by the Audit Committee. Value-at-risk is the potential loss in value of trading positions due to adverse market movements over a defined time period within a specified confidence level. We use the parametric variance/covariance method with delta/gamma approximation to calculate value-at-risk.

Our value-at-risk model utilizes four major parameters:

•  Confidence level—95% for natural gas and petroleum products and 99% for power products

•  Volatility—calculated daily from historical forward prices using the exponentially weighted moving average method

•  Correlation—calculated daily from daily volatilities and historical forward prices using the exponentially weighted moving average method

•  Holding period—natural gas and petroleum products generally have two day-holding periods. Power products have holding periods of five to 20 days based on the risk profile of the portfolio and the liquidation period

While we believe that our value-at-risk assumptions and approximations are reasonable, different assumptions and/or approximations could produce materially different estimates. An inherent limitation of value-at-risk is that past market risk may not produce accurate predictions of future market risk. In addition, value-at-risk calculated for a specified holding period does not fully capture the market risk of positions that cannot be liquidated or offset with hedges within that specified period. Future transactions, market volatility, reduction of market liquidity, failure of counterparties to satisfy their contractual obligations and/or a failure of risk controls could result in material losses from our legacy trading and non-core asset management positions.

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The daily value-at-risk for our legacy trading and non-core asset management positions is:

	2009		2008
	(in millions)
As of December 31	$	1	$	2
Year Ended December 31:
Average		2		4
High		4		13
Low		—		—

Item 8.   Financial Statements and Supplementary Data.

The information required by this Item is incorporated by reference from the consolidated financial statements beginning on page F-1.

Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A.   Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on this evaluation, these officers have concluded that, as of the end of such period, our disclosure controls and procedures are effective.

Management’s Annual Report on Internal Control Over Financial Reporting

The information required by this Item is incorporated by reference from “RRI Energy, Inc.’s Report on Internal Control Over Financial Reporting” on page F-1.

Changes in Internal Control Over Financial Reporting

In connection with the evaluation described above, we identified no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) during our fiscal quarter ended December 31, 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.   Other Information.

None.

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PART III

Item 10.   Directors, Executive Officers and Corporate Governance.

See “Business—Executive Officers” in Item 1 of this Form 10-K. Pursuant to General Instruction G to Form 10-K, we incorporate by reference the information to be disclosed in our definitive proxy statement for the annual stockholder meeting at which we will elect directors (Proxy Statement).

Item 11.   Executive Compensation.

Pursuant to General Instruction G to Form 10-K, we incorporate by reference into this Item 11 the information to be disclosed in our Proxy Statement.

Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Equity Compensation Plan Information

The following table provides information as of December 31, 2009 regarding our equity compensation plans.

	(a)			(b)		(c)
						Number of Securities
	Number of			Weighted-Average		Remaining Available for
	Securities to be Issued			Exercise Price of		Future Issuance Under
	Upon Exercise of			Outstanding		Equity Compensation Plans
	Outstanding Options,			Options, Warrants		(Excluding Securities Reflected
	Warrants and Rights			and Rights(1)		in column (a))
Equity compensation plans approved by security holders(2)		6,487,502	(3)	$	14.09		23,247,230	(4)
Equity compensation plans not approved by security holders(5)		717,806	(6)	$	8.42		3,618,389
Total		7,205,308		$	13.67		26,865,619

(1)	The weighted average exercise prices exclude shares issuable under outstanding time-based restricted stock units (which do not have an exercise price).
(2)	Plans approved by stockholders include the RRI Energy, Inc. Employee Stock Purchase Plan, the 2002 Long-Term Incentive Plan, the Long-Term Incentive Plan of RRI Energy, Inc. and the RRI Energy, Inc. Transition Stock Plan.
(3)	This amount includes 5,485,284 shares issuable upon the exercise of outstanding stock options and 1,002,218 shares issuable pursuant to outstanding restricted stock units granted under the 2002 Long-Term Incentive Plan.
(4)	Includes stockholder approved reserves of 8,262,101 shares as of December 31, 2009 that may be issued under the Employee Stock Purchase Plan and 14,985,129 shares that may be issued under the 2002 Long-Term Incentive Plan. Under the 2002 Long-Term Incentive Plan, no more than 25% of the shares available for future issuance are available for grant as awards of restricted stock and non-restricted awards of common stock or units denominated in common stock. No additional shares may be issued under the Long-Term Incentive Plan of RRI Energy, Inc. or the RRI Energy, Inc. Transition Stock Plan. No additional shares may be issued under the RRI Energy, Inc. Employee Stock Purchase Plan as it was terminated effective December 31, 2009, other than the 431,733 shares issued in January 2010 for the last offering period.
(5)	The RRI Energy Inc. 2002 Stock Plan permits grants of stock options, stock appreciation rights, performance based stock awards, time-based stock awards and cash awards to all employees other than the executive officers subject to the reporting requirements of Section 16(a) of the Exchange Act. The Board authorized 6,000,000 shares for grant upon adoption of the 2002 Stock Plan. To the extent these

47

6,000,000 shares were not granted in 2002, the excess shares were cancelled. In January 2003, an additional 6,000,000 shares were authorized for the plan, with no more than 25% of these shares available for grant as awards of restricted stock and non-restricted awards of common stock or units denominated in common stock. The total number of shares available for future issuance is adjusted for new grants, exercises, forfeitures, cancellations and terminations of outstanding awards.

(6)

This amount includes 436,579 shares issuable upon the exercise of outstanding stock options and 281,227 shares issuable pursuant to outstanding restricted stock units.

Pursuant to General Instruction G to Form 10-K, we incorporate by reference into this Item 12 the information to be disclosed in our Proxy Statement under the captions “Stock Ownership of Certain Beneficial Owners and Management—Directors and Executive Officers, and—Principal Stockholders.”

Item 13.   Certain Relationships and Related Transactions, and Director Independence.

Item 14.   Principal Accountant Fees and Services.

Pursuant to General Instruction G to Form 10-K, we incorporate by reference into each of these Items 13 and 14 the information to be disclosed in our Proxy Statement.

48

PART IV

Item 15.   Exhibits and Financial Statement Schedules.

(a) List of Documents Filed as Part of This Report.

(1)   Index to Consolidated Financial Statements of RRI Energy, Inc. and Subsidiaries.

RRI Energy, Inc.’s Report on Internal Control Over Financial Reporting	F-1
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Statements of Operations for the Years Ended December 31, 2009, 2008 and 2007	F-3
Consolidated Balance Sheets as of December 31, 2009 and 2008	F-4
Consolidated Statements of Cash Flows for the Years Ended December 31, 2009, 2008 and 2007	F-5
Consolidated Statements of Stockholders’ Equity and Comprehensive Income (Loss) for the Years Ended December 31, 2009, 2008 and 2007	F-6
Notes to Consolidated Financial Statements	F-7

(2)   Financial Statement Schedule.

Schedule II—RRI Energy, Inc. and Subsidiaries—Valuation and Qualifying Accounts for the Years Ended December 31, 2009, 2008 and 2007 F-68

All other schedules are omitted because of the absence of the conditions under which they are required or because the required information is included in the financial statements.

The following financial statements are included in this report pursuant to Item 3-16 of Regulation S-X:

Consolidated Financial Statements of RRI Energy Mid-Atlantic Power Holdings, LLC and Subsidiaries

Report of Independent Registered Public Accounting Firm	F-69
Consolidated Statements of Operations for the Years Ended December 31, 2009, 2008 and 2007	F-70
Consolidated Balance Sheets as of December 31, 2009 and 2008	F-71
Consolidated Statements of Cash Flows for the Years Ended December 31, 2009, 2008 and 2007	F-72
Consolidated Statements of Member’s Equity and Comprehensive Income (Loss) for the Years Ended December 31, 2009, 2008 and 2007	F-73
Notes to Consolidated Financial Statements	F-74

Consolidated Financial Statements of Orion Power Holdings, Inc. and Subsidiaries

Report of Independent Registered Public Accounting Firm	F-99
Consolidated Statements of Operations for the Years Ended December 31, 2009, 2008 and 2007	F-100
Consolidated Balance Sheets as of December 31, 2009 and 2008	F-101
Consolidated Statement of Cash Flows for the Years Ended December 31, 2009, 2008 and 2007	F-102
Consolidated Statements of Stockholders’ Equity and Comprehensive Income (Loss) for the Years Ended December 31, 2009, 2008 and 2007	F-103
Notes to Consolidated Financial Statements	F-104

49

(3)   Index to Exhibits.

The exhibits with the cross symbol (+) are filed with the Form 10-K. The exhibits with the asterisk symbol (*) are compensatory arrangements filed pursuant to Item 601(b)(10)(iii) of Regulation S-K. The representations, warranties and covenants contained in the exhibits were made only for purposes of such exhibits, as of specific dates, solely for the benefit of the parties thereto, may be subject to limitations agreed upon by those parties and may be subject to standards of materiality that differ from those applicable to investors. Investors should read such representations, warranties and covenants (or any descriptions thereof contained in the exhibits) in conjunction with information provided elsewhere in this filing and in our other filings and should not rely solely on such information as characterizations of our actual state of facts.

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	2	.1	Asset Purchase Agreement by and among Reliant Energy Channelview LP, Reliant Energy Services Channelview LLC and GIM Channelview Cogeneration, LLC entered into June 9, 2008 and dated as of April 3, 2008 (This filing excludes schedules and exhibits, which the registrant agrees to furnish supplementally to the Securities and Exchange Commission upon request)	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Quarterly Report on Form 10-Q for the period ended June 30, 2008	1-16455		2.1
	2	.2	Asset Purchase Agreement for Bighorn power plant by and among Reliant Energy Wholesale Generation, LLC, Reliant Energy Asset Management, LLC and Nevada Power Company dated as of April 21, 2008 (This filing excludes schedules and exhibits, which the registrant agrees to furnish supplementally to the Securities and Exchange Commission upon request)	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Quarterly Report on Form 10-Q for the period ended March 31, 2008	1-16455		2.1
	2	.3	Amendment No. 1 to Asset Purchase Agreement for Bighorn power plant by and among Reliant Energy Wholesale Generation, LLC, Reliant Energy Asset Management, LLC and Nevada Power Company, dated as of May 12, 2008	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Quarterly Report on Form 10-Q for the period ended June 30, 2008	1-16455		2.2
	2	.4	LLC Membership Interest Purchase Agreement by and between Reliant Energy, Inc. and NRG Retail LLC, dated as of February 28, 2009 (Portions of this Exhibit have been omitted pursuant to a request for confidential treatment)	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Annual Report on Form 10-K for the year ended December 31, 2008	1-16455		2.4

50

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	2	.5	Letter Agreement dated March 24, 2009 re: Section 7.11 of the Membership Interest Purchase Agreement, dated as of February 28, 2009 by and between Reliant Energy, Inc. and NRG Retail LLC	RRI Energy, Inc.’s Quarterly Report on Form 10-Q for the period ended March 31, 2009	1-16455		2.1
	2	.6	Letter Agreement dated April 9, 2009 re: Section 7.9(iv) of the Membership Interest Purchase Agreement, dated as of February 28, 2009 by and between Reliant Energy, Inc. and NRG Retail LLC	RRI Energy, Inc.’s Quarterly Report on Form 10-Q for the period ended March 31, 2009	1-16455		2.2
	2	.7	Letter Agreement dated April 28, 2009 re: Sections 3.2(i), 7.12, 7.13(b) and 7.20 of the Membership Interest Purchase Agreement, dated as of February 28, 2009 by and between Reliant Energy, Inc. and NRG Retail LLC	RRI Energy, Inc.’s Quarterly Report on Form 10-Q for the period ended March 31, 2009	1-16455		2.3
	2	.8	Letter Agreement dated April 30, 2009 re: Effectiveness of the Closing of the Membership Interest Purchase Agreement, dated as of February 28, 2009 by and between Reliant Energy, Inc. and NRG Retail LLC	RRI Energy, Inc.’s Quarterly Report on Form 10-Q for the period ended March 31, 2009	1-16455		2.4
	3	.1	Third Restated Certificate of Incorporation	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Quarterly Report on Form 10-Q for the period ended June 30, 2007	1-16455		3.1
	3	.2	Sixth Amended and Restated Bylaws	RRI Energy, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2009	1-16455		3.2
	3	.3	Certificate of Ownership and Merger merging a wholly-owned subsidiary into registrant pursuant to Section 253 of the General Corporation Law of the State of Delaware, effective as of May 2, 2009	RRI Energy, Inc.’s Quarterly Report on Form 10-Q for the period ended March 31, 2009	1-16455		3.3
	4	.1	Specimen Stock Certificate	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Amendment No. 5 to Registration Statement on Form S-1, filed March 23, 2001	333-48038		4.1

51

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	4	.2	Rights Agreement between Reliant Resources, Inc. and The Chase Manhattan Bank, as Rights Agent, including a form of Rights Certificate, dated as of January 15, 2001	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Amendment No. 8 to Registration Statement on Form S-1, filed April 27, 2001	333-48038		4.2
	4	.3	Senior Indenture among Reliant Energy, Inc. and Wilmington Trust Company, dated as of December 22, 2004	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Current Report on Form 8-K, filed December 27, 2004	1-16455		4.1
	4	.4	First Supplemental Indenture relating to the 6.75% Senior Secured Notes due 2014, among Reliant Energy, Inc., the Guarantors listed therein and Wilmington Trust Company, dated as of December 22, 2004	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Current Report on Form 8-K, filed December 27, 2004	1-16455		4.2
	4	.5	Second Supplemental Indenture relating to the 6.75% Senior Secured Notes due 2014, among Reliant Energy, Inc., the Guarantors listed therein and Wilmington Trust Company, dated as of September 21, 2006	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Annual Report on Form 10-K for the year ended December 31, 2006	1-16455		4.18
	4	.6	Third Supplemental Indenture relating to the 6.75% Senior Secured Notes due 2014, among Reliant Energy, Inc., the Guarantors listed therein and Wilmington Trust Company, dated as of December 1, 2006	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Current Report on Form 8-K, filed December 7, 2006	1-16455		4.3
	4	.7	Sixth Supplemental Indenture relating to the 6.75% Senior Secured Notes due 2014, among RRI Energy, Inc., The Guarantors listed therein and Wilmington Trust Company, dated as of June 1, 2009	RRI Energy, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2009	1-16455		10.1
	4	.8	Seventh Supplemental Indenture relating to the 6.75% Senior Secured Notes due 2014, among RRI Energy, Inc., the Guarantors listed therein and Wilmington Trust Company, dated as of August 20, 2009	RRI Energy’s Current Report on Form 8-K, filed August 24, 2009	1-16455		99.1
	+4	.9	Eighth Supplemental Indenture relating to the 6.75% Senior Secured Notes due 2014, among RRI Energy, Inc., the Guarantors listed therein and Wilmington Trust Company, dated as of December 1, 2009

52

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	4	.10	Indenture between Orion Power Holdings, Inc. and Wilmington Trust Company, dated as of April 27, 2000	Orion Power Holdings, Inc.’s Registration Statement on Form S-1, filed August 18, 2000	333-44118		4.1
	4	.11	Fourth Supplemental Indenture relating to the 7.625% Senior Notes due 2014, among Reliant Energy, Inc., the Guarantors listed therein and Wilmington Trust Company, dated as of June 13, 2007	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Current Report on Form 8-K, filed June 15, 2007	1-16455		4.1
	4	.12	Fifth Supplemental Indenture relating to the 7.875% Senior Notes due 2017, among Reliant Energy, Inc., the Guarantors listed therein and Wilmington Trust Company, dated as of June 13, 2007	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Current Report on Form 8-K, filed June 15, 2007	1-16455		4.2
	10	.1A	Master Separation Agreement between Reliant Resources, Inc. and Reliant Energy, Incorporated, dated as of December 31, 2000	CenterPoint Energy Houston Electric, LLC’s (formerly known as Reliant Energy, Incorporated) Quarterly Report on Form 10-Q for the period ended March 31, 2001	1-3187		10.1
	+10	.1B	Schedules to Master Separation Agreement between Reliant Resources, Inc. and Reliant Energy, Incorporated, dated as of December 31, 2000
	10	.2A	Tax Allocation Agreement between Reliant Resources, Inc. and Reliant Energy, Incorporated, dated as of December 31, 2000	CenterPoint Energy Houston Electric, LLC’s (formerly known as Reliant Energy, Incorporated) Quarterly Report on Form 10-Q for the period ended March 31, 2001	1-3187		10.8
	+10	.2B	Exhibit to Tax Allocation Agreement between Reliant Resources, Inc. and Reliant Energy, Incorporated, dated as of December 31, 2000
	10	.3	Participating Preferred Stock Purchase Agreement by and between Reliant Energy, Inc. and FR Reliant Holdings LP dated as of October 10, 2008	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Current Report on Form 8-K, filed October 16, 2008	1-16455		10.1

53

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	10	.4	Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2001A, among Reliant Energy, Inc., the Subsidiary Guarantors defined therein and J.P. Morgan Trust Company, National Association, as trustee, dated as of December 22, 2004	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Current Report on Form 8-K, filed December 27, 2004	1-16455		10.2
	10	.5A	Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2002A, among Reliant Energy, Inc., the Subsidiary Guarantors defined therein and J.P. Morgan Trust Company, National Association, as trustee, dated as of December 22, 2004	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Current Report on Form 8-K, filed December 27, 2004	1-16455		10.3
	+10	.5B	Exhibit C to Exhibit B to Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2002A, among Reliant Energy, Inc., the Subsidiary Guarantors defined therein and J.P. Morgan Trust Company, National Association, as trustee, dated as of December 22, 2004
	10	.6A	Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2002B, among Reliant Energy, Inc., the Subsidiary Guarantors defined therein and J.P. Morgan Trust Company, National Association, as trustee, dated as of December 22, 2004	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Current Report on Form 8-K, filed December 27, 2004	1-16455		10.4

54

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	+10	.6B	Exhibit C to Exhibit B to Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2002B, among Reliant Energy, Inc., the Subsidiary Guarantors defined therein and J.P. Morgan Trust Company, National Association, as trustee, dated as of December 22, 2004
	10	.7A	Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2003A, among Reliant Energy, Inc., the Subsidiary Guarantors defined therein and J.P. Morgan Trust Company, National Association, as trustee, dated as of December 22, 2004	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Current Report on Form 8-K filed December 27, 2004	1-16455		10.5
	+10	.7B	Exhibit C to Exhibit B to Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2003A, among Reliant Energy, Inc., the Subsidiary Guarantors defined therein and J.P. Morgan Trust Company, National Association, as trustee, dated as of December 22, 2004
	10	.8A	Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2004A, among Reliant Energy, Inc., the Subsidiary Guarantors defined therein and J.P. Morgan Trust Company, National Association, as trustee, dated as of December 22, 2004	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Current Report on Form 8-K, filed December 27, 2004	1-16455		10.6

55

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	+10	.8B	Exhibit C to Exhibit B to Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2004A, among Reliant Energy, Inc., the Subsidiary Guarantors defined therein and J.P. Morgan Trust Company, National Association, as trustee, dated as of December 22, 2004
	10	.9	Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2001A, among Reliant Energy Power Supply, LLC, Reliant Energy, Inc., the Subsidiary Guarantors as defined in the Guarantee Agreement and J.P. Morgan Trust Company, National Association, as trustee, dated as of September 21, 2006	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Annual Report on Form 10-K for the year ended December 31, 2006	1-16455		10.14
	10	.10	Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2002A, among Reliant Energy Power Supply, LLC, Reliant Energy, Inc., the Subsidiary Guarantors as defined in the Guarantee Agreement and J.P. Morgan Trust Company, National Association, as trustee, dated as of September 21, 2006	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Annual Report on Form 10-K for the year ended December 31, 2006	1-16455		10.15

56

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	10	.11	Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2002B, among Reliant Energy Power Supply, LLC, Reliant Energy, Inc., the Subsidiary Guarantors as defined in the Guarantee Agreement and J.P. Morgan Trust Company, National Association, as trustee, dated as of September 21, 2006	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Annual Report on Form 10-K for the year ended December 31, 2006	1-16455		10.16
	10	.12	Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2003A, among Reliant Energy Power Supply, LLC, Reliant Energy, Inc., the Subsidiary Guarantors as defined in the Guarantee Agreement and J.P. Morgan Trust Company, National Association, as trustee, dated as of September 21, 2006	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Annual Report on Form 10-K for the year ended December 31, 2006	1-16455		10.17
	10	.13	Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2004A, among Reliant Energy Power Supply, LLC, Reliant Energy, Inc., the Subsidiary Guarantors as defined in the Guarantee Agreement and J.P. Morgan Trust Company, as trustee, dated as of September 21, 2006	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Annual Report on Form 10-K for the year ended December 31, 2006	1-16455		10.18

57

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	10	.14	Second Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2001A, among Reliant Energy, Inc., the Subsidiary Guarantors as defined in the Guarantee Agreement and The Bank of New York Trust Company, N.A., as trustee, dated as of December 1, 2006	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Current Report on Form 8-K, filed December 7, 2006	1-16455		10.1
	10	.15	Second Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2002A, among Reliant Energy, Inc., the Subsidiary Guarantors as defined in the Guarantee Agreement and The Bank of New York Trust Company, N.A., as trustee, dated as of December 1, 2006	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Current Report on Form 8-K, filed December 7, 2006	1-16455		10.2
	10	.16	Second Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2002B, among Reliant Energy, Inc., the Subsidiary Guarantors as defined in the Guarantee Agreement and The Bank of New York Trust Company, N.A., as trustee, dated as of December 1, 2006	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Current Report on Form 8-K, filed December 7, 2006	1-16455		10.3

58

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	10	.17	Second Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2003A, among Reliant Energy, Inc., the Subsidiary Guarantors as defined in the Guarantee Agreement and The Bank of New York Trust Company, N.A., as trustee, dated as of December 1, 2006	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Current Report on Form 8-K, filed December 7, 2006	1-16455		10.4
	10	.18	Third Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2004A, among Reliant Energy, Inc., the Subsidiary Guarantors as defined in the Guarantee Agreement and The Bank of New York Trust Company, N.A., as trustee, dated as of December 1, 2006	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Current Report on Form 8-K, filed December 7, 2006	1-16455		10.5
	10	.19	Third Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2001A, among RRI Energy, Inc., the Subsidiary Guarantors as defined in the Guarantee Agreement and The Bank of New York Trust Company, N.A., as trustee, dated as of June 1, 2009	RRI Energy, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2009	1-16455		10.2
	10	.20	Third Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2002A, among RRI Energy, Inc., the Subsidiary Guarantors as defined in the Guarantee Agreement and The Bank of New York Trust Company, N.A., as trustee, dated as of June 1, 2009	RRI Energy, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2009	1-16455		10.3

59

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	10	.21	Third Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2002B, among RRI Energy, Inc., the Subsidiary Guarantors as defined in the Guarantee Agreement and The Bank of New York Trust Company, N.A., as trustee, dated as of June 1, 2009	RRI Energy, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2009	1-16455		10.4
	10	.22	Third Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2003A, among RRI Energy, Inc., the Subsidiary Guarantors as defined in the Guarantee Agreement and The Bank of New York Trust Company, N.A., as trustee, dated as of June 1, 2009	RRI Energy, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2009	1-16455		10.5
	10	.23	Fourth Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project), Series 2004A, among RRI Energy, Inc., the Subsidiary Guarantors as defined in the Guarantee Agreement and The Bank of New York Trust Company, N.A., as trustee, dated as of June 1, 2009	RRI Energy, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2009	1-16455		10.6
	10	.24	Fourth Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s exempt facilities revenues bonds (Reliant Energy Seward, LLC Project), Series 2001A, among RRI Energy, Inc. the Subsidiary Guarantors as defined in the Guarantee Agreement and the Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of August 20, 2009	RRI Energy, Inc.’s Current Report on Form 8-K, filed August 24, 2009	1-16455		99.2

60

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	10	.25	Fourth Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s exempt facilities revenues bonds (Reliant Energy Seward, LLC Project), Series 2002A, among RRI Energy, Inc. the Subsidiary Guarantors as defined in the Guarantee Agreement and the Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of August 20, 2009	RRI Energy, Inc.’s Current Report on Form 8-K, filed August 24, 2009	1-16455		99.3
	10	.26	Fourth Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s exempt facilities revenues bonds (Reliant Energy Seward, LLC Project), Series 2002B, among RRI Energy, Inc. the Subsidiary Guarantors as defined in the Guarantee Agreement and the Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of August 20, 2009	RRI Energy, Inc.’s Current Report on Form 8-K, filed August 24, 2009	1-16455		99.4
	10	.27	Fourth Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s exempt facilities revenues bonds (Reliant Energy Seward, LLC Project), Series 2003A, among RRI Energy, Inc. the Subsidiary Guarantors as defined in the Guarantee Agreement and the Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of August 20, 2009	RRI Energy, Inc.’s Current Report on Form 8-K, filed August 24, 2009	1-16455		99.5

61

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	10	.28	Fifth Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s exempt facilities revenues bonds (Reliant Energy Seward, LLC Project), Series 2004A, among RRI Energy, Inc. the Subsidiary Guarantors as defined in the Guarantee Agreement and the Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of August 20, 2009	RRI Energy, Inc.’s Current Report on Form 8-K, filed August 24, 2009	1-16455		99.6
	+10	.29	Fifth Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s exempt facilities revenues bonds (Reliant Energy Seward, LLC Project), Series 2001A, among RRI Energy, Inc. the Subsidiary Guarantors as defined in the Guarantee Agreement and the Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of December 1, 2009
	+10	.30	Fifth Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s exempt facilities revenues bonds (Reliant Energy Seward, LLC Project), Series 2002A, among RRI Energy, Inc. the Subsidiary Guarantors as defined in the Guarantee Agreement and the Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of December 1, 2009

62

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	+10	.31	Fifth Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s exempt facilities revenues bonds (Reliant Energy Seward, LLC Project), Series 2002B, among RRI Energy, Inc. the Subsidiary Guarantors as defined in the Guarantee Agreement and the Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of December 1, 2009
	+10	.32	Fifth Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s exempt facilities revenues bonds (Reliant Energy Seward, LLC Project), Series 2003A, among RRI Energy, Inc. the Subsidiary Guarantors as defined in the Guarantee Agreement and the Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of December 1, 2009
	+10	.33	Sixth Supplemental Guarantee Agreement relating to Pennsylvania Economic Development Financing Authority’s exempt facilities revenues bonds (Reliant Energy Seward, LLC Project), Series 2004A, among RRI Energy, Inc. the Subsidiary Guarantors as defined in the Guarantee Agreement and the Bank of New York Mellon Trust Company, N.A., as Trustee, dated as of December 1, 2009

63

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	10	.34A	Credit and Guaranty Agreement among Reliant Energy, Inc., as Borrower, the Other Loan Parties referred to therein as guarantors, the lenders party thereto, Deutsche Bank AG New York Branch, as Administrative Agent and Collateral Agent, Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc., as Joint Lead Arrangers, Deutsche Bank Securities Inc., J.P. Morgan Securities Inc., Goldman Sachs Credit Partners L.P., Merrill Lynch Capital Corporation and ABN AMRO Bank N.V., as Joint Bookrunners with respect to the Revolving Credit Facility and Deutsche Bank Securities Inc., J.P. Morgan Securities Inc., Goldman Sachs Credit Partners L.P., Merrill Lynch Capital Corporation and Bear, Sterns & Co. Inc., as Joint Bookrunners with respect to the Pre-Funded L/C Facility, dated as of June 12, 2007	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.) Current Report on Form 8-K, filed June 15, 2007	1-16455		1.1

64

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	+10	.34B	Exhibits and Schedules to Credit and Guaranty Agreement among Reliant Energy, Inc., as Borrower, the Other Loan Parties referred to therein as guarantors, the lenders party thereto, Deutsche Bank AG New York Branch, as Administrative Agent and Collateral Agent, Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc., as Joint Lead Arrangers, Deutsche Bank Securities Inc., J.P. Morgan Securities Inc., Goldman Sachs Credit Partners L.P., Merrill Lynch Capital Corporation and ABN AMRO Bank N.V., as Joint Bookrunners with respect to the Revolving Credit Facility and Deutsche Bank Securities Inc., J.P. Morgan Securities Inc., Goldman Sachs Credit Partners L.P., Merrill Lynch Capital Corporation and Bear, Sterns & Co. Inc., as Joint Bookrunners with respect to the Pre-Funded L/C Facility, dated as of June 12, 2007 (Portions of this Exhibit have been omitted pursuant to a request for confidential treatment)
	10	.35	Facility Lease Agreement between Conemaugh Lessor Genco LLC and Reliant Energy Mid-Atlantic Power Holdings, LLC, dated as of August 24, 2000	RRI Energy Mid-Atlantic Power Holdings, LLC’s (formerly Reliant Energy Mid-Atlantic Power Holdings, LLC’s) Registration Statement on Form S-4, filed December 8, 2000	333-51464		4.6a
	10	.36	Schedule identifying substantially identical agreements to Facility Lease Agreement constituting Exhibit 10.35	RRI Energy Mid-Atlantic Power Holdings, LLC’s (formerly Reliant Energy Mid-Atlantic Power Holdings, LLC’s) Registration Statement on Form S-4, filed December 8, 2000	333-51464		4.6b
	10	.37	Pass Through Trust Agreement between Reliant Energy Mid-Atlantic Power Holdings, LLC and Bankers Trust Company, made with respect to the formation of the Series A Pass Through Trust and the issuance of 8.554% Series A Pass Through Certificates, dated as of August 24, 2000	RRI Energy Mid-Atlantic Power Holdings, LLC’s (formerly Reliant Energy Mid-Atlantic Power Holdings, LLC’s) Registration Statement on Form S-4, filed December 8, 2000	333-51464		4.4a

65

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	10	.38	Schedule identifying substantially identical agreements to Pass Through Trust Agreement constituting Exhibit 10.37	RRI Energy Mid-Atlantic Power Holdings, LLC’s (formerly Reliant Energy Mid-Atlantic Power Holdings, LLC’s) Registration Statement on Form S-4, filed December 8, 2000	333-51464		4.4b
	10	.39	Participation Agreement among (i) Conemaugh Lessor Genco LLC, as Owner Lessor; (ii) Reliant Energy Mid-Atlantic Power Holdings, LLC, as Facility Lessee; (iii) Wilmington Trust Company, as Lessor Manager; (iv) PSEGR Conemaugh Generation, LLC, as Owner Participant; (v) Bankers Trust Company, as Lease Indenture Trustee; and (vi) Bankers Trust Company, as Pass Through Trustee, dated as of August 24, 2000	RRI Energy Mid-Atlantic Power Holdings, LLC’s (formerly Reliant Energy Mid-Atlantic Power Holdings, LLC’s) Registration Statement on Form S-4, filed December 8, 2000	333-51464		4.5a
	10	.40	Schedule identifying substantially identical agreements to Participation Agreement constituting Exhibit 10.39	RRI Energy Mid-Atlantic Power Holdings, LLC’s (formerly Reliant Energy Mid-Atlantic Power Holdings, LLC’s) Registration Statement on Form S-4, filed December 8, 2000	333-51464		4.5b
	10	.41A	First Amendment to Participation Agreement, dated as of November 15, 2001	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2005	1-16455		10.20
	+10	.41B	Exhibit M to First Amendment to Participation Agreement, dated as of November 15, 2001
	10	.42	Schedule identifying substantially identical agreements to First Amendment to Participation Agreement constituting Exhibit 10.41A	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2005	1-16455		10.21
	10	.43	Second Amendment to Participation Agreement, dated as of June 18, 2003	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2005	1-16455		10.22
	10	.44	Schedule identifying substantially identical agreements to Second Amendment to Participation Agreement constituting Exhibit 10.43	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2005	1-16455		10.23

66

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	10	.45	Lease Indenture of Trust, Mortgage and Security Agreement between Conemaugh Lessor Genco LLC, as Owner Lessor, and Bankers Trust Company, as Lease Indenture Trustee, dated as of August 24, 2000	RRI Energy Mid-Atlantic Power Holdings, LLC’s (formerly Reliant Energy Mid-Atlantic Power Holdings, LLC’s) Registration Statement on Form S-4, filed December 8, 2000	333-51464		4.8a
	10	.46	Schedule identifying substantially identical agreements to Lease Indenture of Trust constituting Exhibit 10.45	RRI Energy Mid-Atlantic Power Holdings, LLC’s (formerly Reliant Energy Mid-Atlantic Power Holdings, LLC’s) Registration Statement on Form S-4, filed December 8, 2000	333-51464		4.8b
	10	.47A	Purchase and Sale Agreement by and between Orion Power Holdings, Inc., Reliant Energy, Inc., Great Lakes Power Inc. and Brascan Corporation, dated as of May 18, 2004	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Current Report on Form 8-K, filed May 21, 2004	1-16455		99.2
	+10	.47B	Schedules to Purchase and Sale Agreement by and between Orion Power Holdings, Inc., Reliant Energy, Inc., Great Lakes Power Inc. and Brascan Corporation, dated as of May 18, 2004
	10	.48A	Purchase and Sale Agreement between Orion Power Holdings, Inc., as Seller, Reliant Energy, Inc., as Guarantor, and Astoria Generating Company Acquisitions, L.L.C., as Buyer, dated as of September 30, 2005	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Current Report on Form 8-K, filed October 6, 2005	1-16455		10.1
	+10	.48B	Exhibits and Schedules to Purchase and Sale Agreement between Orion Power Holdings, Inc., as Seller, Reliant Energy, Inc., as Guarantor, and Astoria Generating Company Acquisitions, L.L.C., as Buyer, dated as of September 30, 2005
	10	.49A	Settlement and Release of Claims Agreement among each of the Reliant Parties, OMOI, each of the California Parties, each of the Additional Claimants, each of the Class Action Parties and each of the Local Governmental Parties (each as defined therein), dated as of October 12, 2005	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Current Report on Form 8-K, filed October 20, 2005	1-16455		10.1

67

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	+10	.49B	Exhibits to Settlement and Release of Claims Agreement among each of the Reliant Parties, OMOI, each of the California Parties, each of the Additional Claimants, each of the Class Action Parties and each of the Local Governmental Parties (each as defined therein), dated as of October 12, 2005
	*10	.50	Executive Life Insurance Plan, effective as of January 1, 1994, including the first and second amendments thereto (RRI Energy, Inc. has adopted certain obligations under this plan with respect to Brian Landrum)	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Amendment No. 8 to Registration Statement on Form S-1, filed April 27, 2001	333-48038		10.30
	*10	.51	Transition Stock Plan, effective as of May 4, 2001	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2001	1-16455		10.37
	*10	.52	2002 Stock Plan, effective as of March 1, 2002	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Registration Statement on Form S-8, filed April 19, 2002	333-86610		4.5
	*10	.53	Annual Incentive Compensation Plan, effective as of January 1, 2001	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2001	1-16455		10.9
	*10	.54	First Amendment to Annual Incentive Compensation Plan, dated as of September 27, 2007	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2008	1-16455		10.44
	*10	.55	2002 Annual Incentive Compensation Plan for Executive Officers, effective as of March 1, 2002	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) 2002 Proxy Statement on Schedule 14A	1-16455		Appendix I
	*10	.56	First Amendment to 2002 Annual Incentive Compensation Plan for Executive Officers, dated as of September 27, 2007	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2008	1-16455		10.46
	*10	.57	Long-Term Incentive Plan, effective as of January 1, 2001	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2001	1-16455		10.10
	*10	.58	2002 Long-Term Incentive Plan, effective as of June 6, 2002	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Registration Statement on Form S-8, filed April 19, 2002	333-86612		4.5
	*10	.59	Deferral Plan, effective as of January 1, 2002	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Registration Statement on Form S-8, filed December 7, 2001	333-74790		4.1

68

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	*10	.60	First Amendment to Deferral Plan, effective as of January 14, 2003	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2003	1-16455		10.5
	*10	.61	Second Amendment to Deferral Plan, effective as of December 31, 2004	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2008	1-16455		10.51
	*10	.62	Deferral and Restoration Plan, effective as of January 1, 2005	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2008	1-16455		10.52
	*10	.63	Successor Deferral Plan, effective as of January 1, 2002	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2004	1-16455		10.30
	*10	.64	Deferred Compensation Plan, effective as of September 1, 1985, including the first nine amendments thereto (This is now a part of the plan listed as Exhibit 10.63)	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Amendment No. 8 to Registration Statement on Form S-1, filed April 27, 2001	333-48038		10.25
	*10	.65	Deferred Compensation Plan, as amended and restated effective as of January 1, 1989, including the first nine amendments thereto (This is now a part of the plan listed as Exhibit 10.63)	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Amendment No. 8 to Registration Statement on Form S-1, filed April 27, 2001	333-48038		10.26
	*10	.66	Deferred Compensation Plan, as amended and restated effective as of January 1, 1991, including the first ten amendments thereto (This is now a part of the plan listed as Exhibit 10.63)	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Amendment No. 8 to Registration Statement on Form S-1, filed April 27, 2001	333-48038		10.27
	*10	.67	Benefit Restoration Plan, as amended and restated effective as of July 1, 1991, including the first amendment thereto (This is now a part of the plan listed as Exhibit 10.63)	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Amendment No. 8 to Registration Statement on Form S-1, filed April 27, 2001	333-48038		10.12
	*10	.68A	Key Employee Award Program 2004-2006 of the 2002 Long-Term Incentive Plan and the Form of Agreement for Key Employee Award Program, effective as of February 13, 2004	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Quarterly Report on Form 10-Q for the period ended June 30, 2004	1-16455		10.1
	+*10	.68B	Exhibit B to Key Employee Award Program 2004-2006 of the 2002 Long-Term Incentive Plan and the Form of Agreement for Key Employee Award Program, effective as of February 13, 2004

69

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	*10	.69	First Amendment to the Key Employee Award Program, effective as of August 10, 2005	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2005	1-16455		10.44
	*10	.70	Form of 2002 Stock Plan Nonqualified Stock Option Award Agreement, 2003 Grants	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2004	1-16455		10.39
	*10	.71	Form of Change in Control Agreement for CEO, CFO and COO	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2008	1-16455		10.61
	*10	.72	Form of Change in Control Agreement for certain officers other than CEO, CFO and COO	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2008	1-16455		10.62
	*10	.73	Reliant Energy, Inc. Executive Severance Plan, effective as of January 1, 2006	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2005	1-16455		10.57
	*10	.74	First Amendment to Reliant Energy, Inc. Executive Severance Plan, dated as of September 27, 2007	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2008	1-16455		10.64
	*10	.75	Form of 2002 Long-Term Incentive Plan Nonqualified Stock Option Award Agreement for Directors	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2004	1-16455		10.53
	*10	.76	Form of 2002 Long-Term Incentive Plan Restricted Stock Award Agreement for Directors	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2004	1-16455		10.54
	*10	.77	Form of Amendment of 2002 Long-Term Incentive Plan Restricted Stock Award Agreement for Directors	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2008	1-16455		10.67
	*10	.78	Form of 2002 Long-Term Incentive Plan Quarterly Restricted and Premium Restricted Stock Units Award Agreement for Directors	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2004	1-16455		10.55
	*10	.79	Form of 2002 Long-Term Incentive Plan Quarterly Common Stock and Premium Restricted Stock Award Agreement for Directors	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2007	1-16455		10.65
	*10	.80	Form of 2002 Long-Term Incentive Plan Restricted Stock Award Agreement for Directors	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2007	1-16455		10.66

70

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	*10	.81	Form of Long-Term Incentive Plan Restricted Stock Award Agreement for Directors’ initial grant	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Current Report on Form 8-K, filed August 24, 2006	1-16455		10.1
	*10	.82	Reliant Energy, Inc. Non-Employee Directors’ Compensation Program, effective as of October 13, 2008	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2008	1-16455		10.72
	*10	.83	2002 Long-Term Incentive Plan 2008 Long-Term Incentive Award Program for officers (Form of Agreement included with Program)	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Quarterly Report on Form 10-Q for the period ended March 31, 2008	1-16455		10.1
	*10	.84	2002 Long-Term Incentive Plan 2007 Long-Term Incentive Award Program for Officers	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Quarterly Report on Form 10-Q for the period ended March 30, 2007	1-16455		10.1
	*10	.85	Form of 2002 Long-Term Incentive Plan 2007 Long-Term Incentive Award Agreement for Officers	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Quarterly Report on Form 10-Q for the period ended March 30, 2007	1-16455		10.2
	*10	.86	2002 Long-Term Incentive Plan 2007 Long-Term Incentive Award Agreement for Mark Jacobs	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Quarterly Report on Form 10-Q for the period ended June 30, 2007	1-16455		10.3
	*10	.87	2002 Long-Term Incentive Plan Amendment to Nonqualified Stock Option Award Agreement by and between Reliant Energy, Inc. and Joel V. Staff dated as of May 16, 2007—March 12, 2003 grant	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Quarterly Report on Form 10-Q for the period ended June 30, 2007	1-16455		10.4
	*10	.88	2002 Long-Term Incentive Plan Amendment to Nonqualified Stock Option Award Agreement by and between Reliant Energy, Inc. and Joel V. Staff dated as of May 16, 2007—May 8, 2003 grant	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Quarterly Report on Form 10-Q for the period ended June 30, 2007	1-16455		10.5
	*10	.89	2002 Long-Term Incentive Plan Amendment to Nonqualified Stock Option Award Agreement by and between Reliant Energy, Inc. and Joel V. Staff dated as of May 16, 2007—August 23, 2003 grant	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Quarterly Report on Form 10-Q for the period ended June 30, 2007	1-16455		10.6
	*10	.90	2002 Long-Term Incentive Plan Amendment to Key Employee Award Program 2004-2006 Agreement by and between Reliant Energy, Inc. and Joel V. Staff dated as of May 16, 2007—February 13, 2004 grant	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Quarterly Report on Form 10-Q for the period ended June 30, 2007	1-16455		10.7

71

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	*10	.91	2002 Long-Term Incentive Plan Long-Term Incentive Award Agreement for Rick J. Dobson	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Quarterly Report on Form 10-Q for the period ended September 30, 2007	1-16455		10.2
	*10	.92	2002 Long-Term Incentive Plan Long-Term Incentive Award Agreement for Albert H. Myres, Sr.	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2007	1-16455		10.77
	*10	.93	2002 Long-Term Incentive Plan Long-Term Incentive Award Agreement for Charles Griffey	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2007	1-16455		10.78
	*10	.94	2009 Long Term Incentive Award Program for Officers and Form of Award Agreement	RRI Energy, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2009	1-16455		10.1
	*10	.95	2002 Long Term Incentive Plan Director Common Stock Award for Evan J. Silverstein	RRI Energy, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2009	1-16455		10.2
	*10	.96	2002 Long Term Incentive Plan Form of Director Annual Award Agreement	RRI Energy, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2009	1-16455		10.3
	*10	.97	2002 Long Term Incentive Plan Form of Quarterly Common Stock and Premium Restricted Stock Award for Directors	RRI Energy, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2009	1-16455		10.4
	*10	.98	Non-Employee Directors’ Compensation Program, effective as of June 19, 2009	RRI Energy, Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2009	1-16455		10.5
	+*10	.99	Non-Employee Directors’ Compensation Program, effective as of January 1, 2010
	+*10	.100	2002 Long Term Incentive Plan Form of Restricted Stock Unit Award Agreement for Directors
	*+10	.101	2002 Long Term Incentive Plan 2009 Long Term Incentive Award Program for officers (Form of 2009 Long Term Incentive Award Agreement Included with Program)
	10	.102	Guarantee by NRG Energy, Inc., as Guarantor, in favor of Reliant Energy, Inc. dated as of February 28, 2009	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2008	1-16455		10.84

72

					SEC File or
Exhibit				Reporter or Registration	Registration	Exhibit
Number			Document Description	Statement	Number	Reference
	10	.103	Agreement Regarding Prosecution of Litigation by and among Merrill Lynch Commodities, Inc., Merrill Lynch & Co., Inc., Reliant Energy Power Supply, LLC, RERH Holdings, LLC, Reliant Energy Retail Holdings, LLC, Reliant Energy Retail Services, LLC, RE Retail Receivables, LLC and Reliant Energy Solutions East, LLC dated as of February 28, 2009	RRI Energy, Inc.’s (formerly Reliant Energy, Inc.’s) Annual Report on Form 10-K for the year ended December 31, 2008	1-16455		10.85
	*+10	.104	Omnibus Amendment Reliant Energy, Inc. Executive Deferral, Incentive and Non-Qualified Plans effective as of May 2, 2009 (amending plans filed as Exhibits 10.51, 10.52, 10.53, 10.55, 10.57, 10.58, 10.59, 10.62 and 10.63)
	*+10	.105	Omnibus Amendment Reliant Energy, Inc. Severance Plans effective as of May 2, 2009 (amending Reliant Energy, Inc. Executive Severance Plan filed as Exhibit 10.73)
	+12	.1	RRI Energy, Inc. and Subsidiaries Ratio of Earnings from Continuing Operations to Fixed Charges
	+21	.1	Subsidiaries of RRI Energy, Inc.
	+23	.1	Consent of KPMG LLP, independent registered public accounting firm of RRI Energy, Inc.
	+31	.1	Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	+31	.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	+32	.1	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)
	+101		Interactive Data File

73

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

RRI Energy, Inc.

(Registrant)

By: /s/  Mark M. Jacobs

Mark M. Jacobs

President and Chief Executive Officer

February 25, 2010

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated as of February 25, 2010.

Signature	Title
/s/  Mark M. Jacobs Mark M. Jacobs	President and Chief Executive Officer
/s/  Rick J. Dobson Rick J. Dobson	Executive Vice President and Chief Financial Officer (Principal Financial Officer)
/s/  Thomas C. Livengood Thomas C. Livengood	Senior Vice President and Controller (Principal Accounting Officer)
/s/  E. William Barnett E. William Barnett	Director
/s/  Mark M. Jacobs Mark M. Jacobs	Director
/s/  Steven L. Miller Steven L. Miller	Director
/s/  Laree E. Perez Laree E. Perez	Director
/s/  Evan J. Silverstein Evan J. Silverstein	Director

74

RRI ENERGY, INC.’S REPORT ON INTERNAL
CONTROL OVER FINANCIAL REPORTING

The management of RRI Energy, Inc. and its subsidiaries (the Company) is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control system was designed to provide reasonable assurance to our management and Board of Directors regarding the preparation and fair presentation of published financial statements.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2009. In making this assessment, our management used the criteria set forth in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment we believe that, as of December 31, 2009, our internal control over financial reporting is effective based on those criteria.

Our independent auditors have issued an audit report on our internal control over financial reporting. This report appears on page F-2.

/s/  Mark M. Jacobs
Mark M. Jacobs
President and
Chief Executive Officer /s/  Rick J. Dobson
Rick J. Dobson
Executive Vice President and
Chief Financial Officer

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

RRI Energy, Inc.:

We have audited the accompanying consolidated balance sheets of RRI Energy, Inc. and subsidiaries (the Company) as of December 31, 2009 and 2008, and the related consolidated statements of operations, stockholders’ equity and comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2009. In connection with our audits of the consolidated financial statements, we have also audited financial statement schedule II – Valuation and Qualifying Accounts for each of the years in the three-year period ended December 31, 2009. We have also audited the Company’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for these consolidated financial statements and financial statement schedule, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of Internal Control Over Financial Reporting on page F-1. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule and an opinion on the Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of RRI Energy, Inc. and subsidiaries as of December 31, 2009 and 2008, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2009, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. Also in our opinion, RRI Energy, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

As discussed in notes 2(d) and 23(c) to the consolidated financial statements, the Company changed its method of accounting for fair value measurements of financial instruments due to the adoption of new accounting requirements issued by the FASB, as of January 1, 2008.

KPMG LLP

Houston, Texas

February 24, 2010

F-2

RRI ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	2009			2008			2007
	(thousands of dollars, except per share amounts)
Revenues:
Revenues (including $(44,170), $(1,151) and $31,662 unrealized gains (losses)) (including $0, $253,001 and $127,083 from affiliates)	$	1,824,839		$	3,393,900		$	3,202,528
Expenses:
Cost of sales (including $65,961, $(7,405) and $(25,113) unrealized gains (losses)) (including $0, $71,568 and $42,645 from affiliates)		1,129,249			1,913,689			2,040,769
Operation and maintenance		550,253			595,262			642,406
General and administrative		100,745			121,173			134,488
Western states litigation and similar settlements		—			37,467			22,000
Gains on sales of assets and emission and exchange allowances, net		(21,913	)		(92,202	)		(25,699	)
Goodwill and long-lived assets impairments		210,771			304,859			—
Depreciation and amortization		269,191			312,642			398,691
Total operating expense		2,238,296			3,192,890			3,212,655
Operating Income (Loss)		(413,457	)		201,010			(10,127	)
Other Income (Expense):
Income of equity investment, net		605			1,198			4,686
Debt extinguishments losses		(7,501	)		(2,257	)		(113,522	)
Other, net		(248	)		4,727			4
Interest expense		(186,296	)		(199,590	)		(262,410	)
Interest income		2,516			21,178			19,638
Total other expense		(190,924	)		(174,744	)		(351,604	)
Income (Loss) from Continuing Operations Before Income Taxes		(604,381	)		26,266			(361,731	)
Income tax expense (benefit)		(125,349	)		136,532			(160,100	)
Loss from Continuing Operations		(479,032	)		(110,266	)		(201,631	)
Income (loss) from discontinued operations		881,844			(629,409	)		566,738
Net Income (Loss)	$	402,812		$	(739,675	)	$	365,107
Basic Earnings (Loss) per Share:
Loss from continuing operations	$	(1.36	)	$	(0.32	)	$	(0.59	)
Income (loss) from discontinued operations		2.51			(1.81	)		1.66
Net income (loss)	$	1.15		$	(2.13	)	$	1.07
Diluted Earnings (Loss) per Share:
Loss from continuing operations	$	(1.36	)	$	(0.32	)	$	(0.59	)
Income (loss) from discontinued operations		2.51			(1.81	)		1.66
Net income (loss)	$	1.15		$	(2.13	)	$	1.07

See Notes to our Consolidated Financial Statements

F-3

RRI ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31,
	2009			2008
	(thousands of dollars, except per share amounts)
ASSETS
Current Assets:
Cash and cash equivalents	$	943,440		$	1,004,367
Restricted cash		24,093			2,721
Accounts and notes receivable, principally customer, net		152,569			249,871
Inventory		331,584			314,999
Derivative assets		132,062			161,340
Margin deposits		198,582			32,676
Investment in and receivables from Channelview, net		—			58,703
Prepayments and other current assets		86,844			124,449
Current assets of discontinued operations ($55,855 and $295,477 of margin deposits)		108,476			2,506,340
Total current assets		1,977,650			4,455,466
Property, Plant and Equipment, net		4,602,313			4,819,789
Other Assets:
Other intangibles, net		305,913			380,554
Derivative assets		53,138			78,879
Prepaid lease		277,370			273,374
Other ($33,793 and $29,012 accounted for at fair value)		239,078			219,552
Long-term assets of discontinued operations		5,232			494,781
Total other assets		880,731			1,447,140
Total Assets	$	7,460,694		$	10,722,395
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt and short-term borrowings	$	404,505		$	12,517
Accounts payable, principally trade		142,787			156,604
Derivative liabilities		151,461			202,206
Margin deposits		2,860			93,000
Other		169,898			199,026
Current liabilities of discontinued operations ($11,000 and $0 of margin deposits)		58,452			2,375,895
Total current liabilities		929,963			3,039,248
Other Liabilities:
Derivative liabilities		61,436			140,493
Other		260,547			272,079
Long-term liabilities of discontinued operations		13,700			873,190
Total other liabilities		335,683			1,285,762
Long-term Debt		1,949,771			2,610,737
Commitments and Contingencies
Temporary Equity Stock-based Compensation		6,890			9,004
Stockholders’ Equity:
Preferred stock; par value $0.001 per share (125,000,000 shares authorized; none outstanding)		—			—
Common stock; par value $0.001 per share (2,000,000,000 shares authorized; 352,785,985 and 349,812,537 issued)		114			111
Additional paid-in capital		6,259,248			6,238,639
Accumulated deficit		(1,972,389	)		(2,375,201	)
Accumulated other comprehensive loss		(48,586	)		(85,905	)
Total stockholders’ equity		4,238,387			3,777,644
Total Liabilities and Equity	$	7,460,694		$	10,722,395

See Notes to our Consolidated Financial Statements

F-4

RRI ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	2009			2008			2007
	(thousands of dollars)
Cash Flows from Operating Activities:
Net income (loss)	$	402,812		$	(739,675	)	$	365,107
(Income) loss from discontinued operations		(881,844	)		629,409			(566,738	)
Loss from continuing operations		(479,032	)		(110,266	)		(201,631	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Goodwill and long-lived assets impairments		210,771			304,859			—
Depreciation and amortization		269,191			312,642			398,691
Deferred income taxes		(120,646	)		99,930			(153,344	)
Net changes in energy derivatives		(21,285	)		8,556			(6,549	)
Amortization of deferred financing costs		7,086			6,653			9,213
Debt extinguishments losses		7,501			2,257			113,522
Gains on sales of assets and emission and exchange allowances, net		(21,913	)		(92,202	)		(25,699	)
Western states litigation and similar settlements		—			3,467			—
Other, net		(13,121	)		(10,486	)		6,342
Changes in other assets and liabilities:
Accounts and notes receivable, net		108,985			9,978			(40,630	)
Changes in notes, receivables and payables with affiliate, net		43			3,687			(13,078	)
Inventory		(14,711	)		(31,862	)		(21,863	)
Margin deposits, net		(256,046	)		199,370			285,641
Net derivative assets and liabilities		(32,460	)		3,049			(8,253	)
Western states litigation and similar settlements payments		(3,449	)		—			(35,000	)
Accounts payable		(12,776	)		(48,470	)		(19,771	)
Other current assets		12,269			1,969			2,559
Other assets		(6,466	)		10,207			(12,633	)
Taxes payable/receivable		(6,883	)		24,325			(9,166	)
Other current liabilities		(11,157	)		10,091			(56,011	)
Other liabilities		(7,417	)		(4,327	)		(8,810	)
Net cash provided by (used in) continuing operations from operating activities		(391,516	)		703,427			203,530
Net cash provided by (used in) discontinued operations from operating activities		585,045			(520,732	)		558,213
Net cash provided by operating activities		193,529			182,695			761,743
Cash Flows from Investing Activities:
Capital expenditures		(189,511	)		(278,757	)		(174,589	)
Proceeds from sales of assets, net		35,931			526,956			82,075
Proceeds from sales of emission and exchange allowances		19,180			42,458			6,815
Purchases of emission allowances		(22,711	)		(60,986	)		(91,923	)
Restricted cash		(4,620	)		530			(6,326	)
Other, net		3,750			6,562			6,045
Net cash provided by (used in) continuing operations from investing activities		(157,981	)		236,763			(177,903	)
Net cash provided by (used in) discontinued operations from investing activities		311,800			(20,128	)		(747	)
Net cash provided by (used in) investing activities		153,819			216,635			(178,650	)
Cash Flows from Financing Activities:
Proceeds from long-term debt		—			—			1,300,000
Payments of long-term debt		(254,980	)		(57,704	)		(1,535,887	)
Increase in short-term borrowings and revolving credit facilities, net		—			—			6,554
Payments of financing costs		—			—			(31,245	)
Payments of debt extinguishments expenses		(4,778	)		(1,017	)		(72,779	)
Proceeds from issuances of stock		11,245			13,570			41,317
Net cash used in continuing operations from financing activities		(248,513	)		(45,151	)		(292,040	)
Net cash used in discontinued operations from financing activities		(260,707	)		—			—
Net cash used in financing activities		(509,220	)		(45,151	)		(292,040	)
Net Change in Cash and Cash Equivalents, Total Operations		(161,872	)		354,179			291,053
Less: Net Change in Cash and Cash Equivalents, Discontinued Operations		(100,945	)		(126,118	)		92,066
Cash and Cash Equivalents at Beginning of Period, Continuing Operations		1,004,367			524,070			325,083
Cash and Cash Equivalents at End of Period, Continuing Operations	$	943,440		$	1,004,367		$	524,070
Supplemental Disclosure of Cash Flow Information:
Cash Payments:
Interest paid (net of amounts capitalized) for continuing operations	$	194,355		$	205,956		$	299,379
Income taxes paid (net of income tax refunds received) for continuing operations		2,330			12,312			2,833

See Notes to our Consolidated Financial Statements

F-5

RRI ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (LOSS)

									Accumulated Other Comprehensive Income (Loss)
									Unrealized
									Gain (Loss)														Discontinued
									on					Benefits			Benefits			Total			Operations
									Available-		Deferred			Actuarial			Net			Accumulated			Accumulated
			Additional						For-		Derivative			Net			Prior			Other			Other			Total
	Common		Paid			Accumulated			Sale		Gains			Gain			Service			Comprehensive			Comprehensive			Stockholders’			Comprehensive
	Stock		In Capital			Deficit			Securities		(Losses)			(Loss)			Costs			Income (Loss)			Income (Loss)			Equity			Income (Loss)
														(thousands of dollars)
Balance December 31, 2006	$	99	$	6,174,665		$	(2,026,316	)	$	—	$	(178,402	)	$	(15,463	)	$	(10,869	)	$	(204,734	)	$	6,159		$	3,949,873
Adjustment to initially apply FIN 48				(468	)		25,683																				25,215
Balance after initial adjustment to apply FIN 48		99		6,174,197			(2,000,633	)		—		(178,402	)		(15,463	)		(10,869	)		(204,734	)		6,159			3,975,088
Net income							365,107																				365,107		$	365,107
Distribution to CenterPoint Energy, Inc.				(2,487	)																						(2,487	)
Warrants		1		43																							44
Transactions under stock plans		6		43,659																							43,665
Conversion of convertible senior subordinated notes to common stock				100																							100
Other comprehensive income (loss):
Deferred gain from cash flow hedges, net of tax of $3 million												3,225									3,225						3,225			3,225
Reclassification of net deferred loss from cash flow hedges into net income, net of tax of $58 million												93,933									93,933			(5,030	)		88,903			88,903
Reclassification of benefits net prior service costs into net income, net of tax of $0																		1,308			1,308						1,308			1,308
Reclassification of benefits actuarial net loss into net income, net of tax of $0															356						356						356			356
Deferred benefits actuarial net gain, net of tax of $0															1,725						1,725						1,725			1,725
Comprehensive income																													$	460,624
Balance December 31, 2007	$	106	$	6,215,512		$	(1,635,526	)	$	—	$	(81,244	)	$	(13,382	)	$	(9,561	)	$	(104,187	)	$	1,129		$	4,477,034
Net loss							(739,675	)																			(739,675	)	$	(739,675	)
Warrants		5		2,070																							2,075
Transactions under stock plans				19,039																							19,039
Conversion of convertible senior subordinated notes to common stock				2,018																							2,018
Other comprehensive income (loss):
Reclassification of net deferred loss from cash flow hedges into net loss, net of tax of $20 million												32,605									32,605			(1,129	)		31,476			31,476
Reclassification of benefits net prior service costs into net loss, net of tax of $0																		961			961						961			961
Reclassification of benefits actuarial net loss into net loss, net of tax of $0															188						188						188			188
Deferred benefits, net of tax of $1 million and $1 million															(20,111	)		(810	)		(20,921	)					(20,921	)		(20,921	)
Unrealized gain on available-for-sale securities, net of tax of $3 million										5,449											5,449						5,449			5,449
Comprehensive loss																													$	(722,522	)
Balance December 31, 2008	$	111	$	6,238,639		$	(2,375,201	)	$	5,449	$	(48,639	)	$	(33,305	)	$	(9,410	)	$	(85,905	)	$	—		$	3,777,644
Net income							402,812																				402,812		$	402,812
Transactions under stock plans		3		20,609																							20,612
Other comprehensive income (loss):
Reclassification of net deferred loss from cash flow hedges into net income, net of tax of $11 million												14,791									14,791						14,791			14,791
Reclassification of benefits net prior service costs into net income, net of tax of $0																		6,046			6,046						6,046			6,046
Reclassification of benefits actuarial net loss into net income, net of tax of $0															2,977						2,977						2,977			2,977
Deferred benefits, net of tax of $0 and $1 million															10,091			351			10,442						10,442			10,442
Unrealized gain on available-for-sale securities, net of tax of $2 million										3,063											3,063						3,063			3,063
Comprehensive income																													$	440,131
Balance December 31, 2009	$	114	$	6,259,248		$	(1,972,389	)	$	8,512	$	(33,848	)	$	(20,237	)	$	(3,013	)	$	(48,586	)	$	—		$	4,238,387

See Notes to our Consolidated Financial Statements

F-6

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)   Background and Basis of Presentation

Background.  “RRI Energy” refers to RRI Energy, Inc. and “we,” “us” and “our” refer to RRI Energy, Inc. and its consolidated subsidiaries. We provide energy, capacity, ancillary and other energy services to wholesale customers in competitive energy markets in the United States through our ownership and operation of and contracting for power generation capacity. Our business consists of four reportable segments. See note 20.

RRI Energy, a Delaware corporation, was formed in August 2000 by CenterPoint Energy, Inc. (CenterPoint) (known as Reliant Energy, Incorporated at the time) in connection with the planned separation of its regulated and unregulated operations. CenterPoint transferred substantially all of its unregulated businesses to us. In May 2001, Reliant Energy became a publicly traded company and in September 2002, CenterPoint distributed its remaining ownership of our common stock to its shareholders.

We sold our retail business in three transactions occurring in December 2008, May 2009 and December 2009. We began reporting this business as discontinued operations in the first quarter of 2009. In connection with the Texas retail sale, we changed our name to RRI Energy, Inc. from Reliant Energy, Inc. effective May 2, 2009. See note 23.

Basis of Presentation.  All significant intercompany transactions have been eliminated.

Channelview.  In August 2007, four of our wholly-owned subsidiaries, Reliant Energy Channelview LP (Channelview LP), Reliant Energy Channelview (Texas) LLC, Reliant Energy Channelview (Delaware) LLC and Reliant Energy Services Channelview LLC (collectively, Channelview), filed for reorganization under Chapter 11 of the Bankruptcy Code. As Channelview was subject to the supervision of the bankruptcy court, we deconsolidated Channelview’s financial results beginning August 20, 2007, and began reporting our investment in Channelview using the cost method. The Channelview plant was sold in July 2008. Channelview emerged from bankruptcy in October 2009 at which time we reconsolidated the entities. See note 22.

(2)   Summary of Significant Accounting Policies

(a)   Use of Estimates and Market Risk and Uncertainties.

Management makes estimates and assumptions to prepare financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) that affect:

•  the reported amounts of assets, liabilities and equity

•  the reported amounts of revenues and expenses

•  our disclosure of contingent assets and liabilities at the date of the financial statements

Actual results could differ from those estimates.

We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which we believe to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. We have evaluated subsequent events for recording and disclosure to February 25, 2010, the date the financial statements were issued.

Our critical accounting estimates include:  (a) fair value of derivative assets and liabilities; (b) recoverability and fair value of long-lived assets; (c) loss contingencies and (d) deferred tax assets, valuation allowances and tax liabilities.

We are subject to various risks inherent in doing business. See notes 2(c), 2(d), 2(e), 2(f), 2(g), 2(l), 2(m), 2(n), 2(o), 2(p), 3, 4, 5, 6, 7, 10, 11, 12, 13, 14, 15, 16, 17, 21, 22 and 23.

(b)   Principles of Consolidation.

We include our accounts and those of our wholly-owned subsidiaries in our consolidated financial statements, excluding Channelview during its deconsolidation from August 2007 through October 2009. We do not consolidate three power generating facilities (see note 15(a)), which are under operating leases, or a 50% equity investment in a cogeneration plant.

F-7

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(c)   Revenues.

Power Generation Revenues.  We record gross revenues from the sales of power and other energy services under the accrual method. Electric power and other energy services are sold at market-based prices through existing power exchanges or third party contracts. Energy sales and services that have been delivered but not billed by period end are estimated. During 2009, 2008 and 2007, we recorded $922 million, $2.1 billion and $2.1 billion, respectively, in power generation revenues.

Capacity Revenues.  We record gross revenues from the sales of capacity under the accrual method. These sales are sold at market-based prices primarily through the RPM auction market in PJM. We also sell in MISO, Cal ISO and other markets where we enter into agreements with counterparties. Sales that have been delivered but not billed by period end are estimated. During 2009, 2008 and 2007, we recorded $536 million, $455 million and $268 million, respectively, in capacity revenues.

Natural Gas Sales Revenues.  We record gross revenues from the sales of natural gas under the accrual method. These sales are sold at market-based prices through third party contracts or related party affiliates. Sales that have been delivered but not billed by period end are estimated. During 2009, 2008 and 2007, we recorded $381 million, $948 million and $994 million, respectively, in natural gas sales revenues.

(d)   Fair Value Measurements.

Fair Value Hierarchy and Valuation Techniques.  We apply recurring fair value measurements to our financial assets and liabilities. In determining fair value, we generally use a market approach and incorporate assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation techniques. These inputs can be readily observable, market corroborated, or generally unobservable internally developed inputs. Based on the observability of the inputs used in our valuation techniques, our financial assets and liabilities are classified as follows:

Level 1:  Level 1 represents unadjusted quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date. This category primarily includes our energy derivative instruments that are exchange-traded or that are cleared and settled through the exchange. Our cash equivalents and available-for-sale and trading securities are also valued using Level 1 inputs.

Level 2:  Level 2 represents quoted market prices for similar assets or liabilities in active markets, quoted market prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data. This category includes emission allowances futures that are exchange-traded and over-the-counter (OTC) derivative instruments such as generic swaps, forwards and options.

Level 3:  This category includes our energy derivative instruments whose fair value is estimated based on internally developed models and methodologies utilizing significant inputs that are generally less readily observable from objective sources (such as implied volatilities and correlations). Our OTC, complex or structured derivative instruments that are transacted in less liquid markets with limited pricing information are included in Level 3. Examples are coal contracts, longer term natural gas contracts and options valued using implied or internally developed inputs.

We value some of our OTC, complex or structured derivative instruments using valuation models, which utilize inputs that may not be corroborated by market data, such as market prices for power and fuel, price shapes, volatilities and correlations as well as other relevant factors. When such inputs are significant to the fair value measurement, the derivative assets or liabilities are classified as Level 3 when we do not have corroborating market evidence to support significant valuation model inputs and cannot verify the model to market transactions. We believe the transaction price is the best estimate of fair value at inception under the exit price methodology.

Accordingly, when a pricing model is used to value such an instrument, the resulting value is adjusted so the model value at inception equals the transaction price. Valuation models are typically impacted by Level 1 or Level 2 inputs that can be observed in the market, as well as unobservable Level 3 inputs. Subsequent to initial recognition, we update Level 1 and Level 2 inputs to reflect observable market changes. Level 3 inputs

F-8

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

are updated when corroborated by available market evidence. In the absence of such evidence, management’s best estimate is used.

See note 4 for discussion of our fair value measurements for some non-financial assets.

Fair Value of Derivative Instruments and Certain Other Assets.  We apply recurring fair value measurements to our financial assets and liabilities. Fair value measurements of our financial assets and liabilities are as follows:

	December 31,
	2009
										Total
	Level 1		Level 2		Level 3		Reclassifications(1)			Fair Value
	(in millions)
Total derivative assets	$	137	$	46	$	4	$	(2	)	$	185
Total derivative liabilities		49		134		32		(2	)		213
Cash equivalents(2)		965		—		—		—			965
Other assets(3)		34		—		—		—			34

(1)	Reclassifications are required to reconcile to our consolidated balance sheet presentation.
(2)	Represent investments in money market funds and are included in cash and cash equivalents and restricted cash in our consolidated balance sheet. We had $943 million of cash equivalents included in cash and cash equivalents and $22 million of cash equivalents included in restricted cash.
(3)	Include $13 million in available-for-sale securities (shares in a public exchange) and $21 million in trading securities (rabbi trust investments (which are comprised of mutual funds) associated with our non-qualified deferred compensation plans for key and highly compensated employees).

	December 31,
	2008
										Total
	Level 1		Level 2		Level 3		Reclassifications(1)			Fair Value
	(in millions)
Total derivative assets	$	125	$	111	$	7	$	(3	)	$	240
Total derivative liabilities		17		208		121		(3	)		343
Cash equivalents(2)		1,004		—		—		—			1,004
Other assets(3)		29		—		—		—			29

(1)	Reclassifications are required to reconcile to our consolidated balance sheet presentation.
(2)	Represent investments in money market funds and are included in cash and cash equivalents in our consolidated balance sheet. We had $1.0 billion of cash equivalents included in cash and cash equivalents.
(3)	Include $8 million in available-for-sale securities (shares in a public exchange) and $21 million in trading securities (rabbi trust investments (which is comprised of mutual funds) associated with our non-qualified deferred compensation plans for key and highly compensated employees).

F-9

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following is a reconciliation of changes in fair value of net derivative assets and liabilities classified as Level 3:

	Net Derivatives (Level 3)
	2009			2008
	(in millions)
Balance, beginning of period (net asset (liability))	$	(114	)	$	21
Total gains (losses) realized/unrealized:
Included in earnings(1)		(79	)		127
Purchases, issuances and settlements (net)		165			(262	)
Transfers in and/or out of Level 3 (net)		—			—
Balance, end of period (net asset (liability))	$	(28	)	$	(114	)
Changes in unrealized gains (losses) relating to derivative assets and liabilities still held as of December 31, 2009 and 2008:
Revenues	$	(1	)	$	—
Cost of sales		(23	)		5
Total	$	(24	)	$	5

(1) Recorded in revenues and cost of sales.

Nonperformance Risk on Derivative Liabilities.  Fair value measurement of our derivative liabilities reflects the nonperformance risk related to that liability, which is our own credit risk. We derive our nonperformance risk by applying our credit default swap spread against the respective derivative liability. As of December 31, 2009 and 2008, we had $1 million and $15 million, respectively, in reserves for nonperformance risk on derivative liabilities. This change in accounting estimate had an impact during 2008 as follows (income (loss)):

	2008
	Loss from
	Continuing Operations
	before Income Taxes			Net Loss
	(in millions)
Total derivative liabilities	$	15	(1)	$	10	(2)

(1)	This amount represented a decrease in our net derivative liabilities with the corresponding unrealized gains of $7 million and $8 million recorded in revenues and cost of sales, respectively.
(2)	This represents an $0.03 impact on loss per share for 2008.

Fair Value of Other Financial Instruments.  The fair values of cash, accounts receivable and payable and margin deposits approximate their carrying amounts. Values of our debt for continuing operations (see note 6) are:

					2008
	December 31,
	2009
	Carrying		Fair		Carrying		Fair
	Value		Value(1)		Value		Value(1)
			(in millions)
Fixed rate debt	$	2,355	$	2,333	$	2,623	$	2,168
Total debt	$	2,355	$	2,333	$	2,623	$	2,168

(1) We based the fair values of our fixed rate debt on market prices and quotes from an investment bank.

See notes 2(e) and 6.

F-10

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(e)   Derivatives and Hedging Activities.

Changes in commodity prices prior to the energy delivery period are inherent in our business. Accordingly, we may enter selective hedges, including originated transactions, to (a) seek potential value greater than what is available in the spot or day-ahead markets, (b) address operational requirements or (c) seek a specific financial objective. For our risk management activities, we use derivative and non-derivative contracts that provide for settlement in cash or by delivery of a commodity. We use derivative instruments such as futures, forwards, swaps and options to execute our hedge strategy. We may also enter into derivatives to manage our exposure to changes in prices of emission and exchange allowances.

We account for our derivatives under one of three accounting methods (mark-to-market, accrual (under the normal purchase/normal sale exception to fair value accounting) or cash flow hedge accounting) based on facts and circumstances. See note 2(d) for discussion on fair value measurements.

A derivative is recognized at fair value in the balance sheet whether or not it is designated as an accounting hedge, except for derivative contracts designated as normal purchase/normal sale exceptions, which are not in our consolidated balance sheet or results of operations prior to settlement resulting in accrual accounting treatment.

Realized gains and losses on derivative contracts used for risk management purposes and not held for trading purposes are reported either on a net or gross basis based on the relevant facts and circumstances. Hedging transactions that do not physically flow are included in the same caption as the items being hedged.

A summary of our derivative activities and classification in our results of operations is:

	Primary
	Risk	Purpose for Holding or	Transactions that	Transactions that
Instrument	Exposure	Issuing Instrument(1)	Physically Flow/Settle(2)	Financially Settle(3)
Power futures, forward, swap and option contracts	Price risk	Power sales to customers	Revenues	Revenues
		Power purchases related to operations	Cost of sales	Revenues
		Power purchases/sales related to legacy trading and non-core asset management positions(4)	Revenues	Revenues
Natural gas and fuel futures, forward, swap and option contracts	Price risk	Natural gas and fuel sales related to operations	Revenues/ Cost of sales	Cost of sales
		Natural gas sales related to power generation(5)	N/A(6)	Revenues
		Natural gas and fuel purchases related to operations	Cost of sales	Cost of sales
		Natural gas and fuel purchases/sales related to legacy trading and non-core asset management positions(4)	Cost of sales	Cost of sales
Emission and exchange allowances futures(7)	Price risk	Purchases/sales of emission and exchange allowances	N/A(6)	Revenues/ Cost of sales

(1) The purpose for holding or issuing does not impact the accounting method elected for each instrument.

F-11

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(2)	Includes classification of unrealized gains and losses for derivative transactions reclassified to inventory or intangibles upon settlement.
(3)	Includes classification for mark-to-market derivatives and amounts reclassified from accumulated other comprehensive income (loss) related to cash flow hedges.
(4)	See discussion below regarding trading activities.
(5)	Natural gas financial swaps and options transacted to economically hedge generation in the PJM region.
(6)	N/A is not applicable.
(7)	Includes emission and exchange allowances futures for sulfur dioxide (SO2), nitrogen oxide (NOX) and carbon dioxide (CO2).

In addition to price risk, we are exposed to credit and operational risk. We have a risk control framework to manage these risks, which include: (a) measuring and monitoring these risks, (b) review and approval of new transactions relative to these risks, (c) transaction validation and (d) portfolio valuation and reporting. We use mark-to-market valuation, value-at-risk and other metrics in monitoring and measuring risk. Our risk control framework includes a variety of separate but complementary processes, which involve commercial and senior management and our Board of Directors. See note 2(f) for further discussion of our credit policy.

Earnings Volatility from Derivative Instruments.  We procure power, natural gas, coal, oil, natural gas transportation and storage capacity and other energy-related commodities to support our business. We may experience volatility in our earnings resulting from contracts receiving accrual accounting treatment while related derivative instruments are marked to market through earnings. As discussed in note 2(a), our financial statements include estimates and assumptions made by management throughout the reporting periods and as of the balance sheet dates. It is reasonable that subsequent to the balance sheet date of December 31, 2009, changes, some of which could be significant, have occurred in the inputs to our various fair value measures, particularly relating to commodity price movements.

Unrealized gains and losses on energy derivatives consist of both gains and losses on energy derivatives during the current reporting period for derivative assets or liabilities that have not settled as of the balance sheet date and the reversal of unrealized gains and losses from prior periods for derivative assets or liabilities that settled prior to the balance sheet date during the current reporting period.

Cash Flow Hedges.  During the first quarter of 2007, we de-designated our remaining cash flow hedges; therefore, as of December 31, 2009 and 2008, we do not have any designated cash flow hedges. The fair value of our de-designated cash flow hedges are deferred in accumulated other comprehensive loss, net of tax, to the extent the contracts have been effective as hedges, until the forecasted transactions affect earnings. At the time the forecasted transactions affect earnings, we reclassify the amounts in accumulated other comprehensive loss into earnings.

Presentation of Derivative Assets and Liabilities.  We present our derivative assets and liabilities on a gross basis (regardless of master netting arrangements with the same counterparty). Cash collateral amounts are also presented on a gross basis.

(f)   Credit Risk.

We have a credit policy that governs the management of credit risk, including the establishment of counterparty credit limits and specific transaction approvals. Credit risk is monitored daily and the financial condition of our counterparties is reviewed periodically. We try to mitigate credit risk by entering into contracts that permit netting and allow us to terminate upon the occurrence of certain events of default. We measure credit risk as the replacement cost for our derivative positions plus amounts owed for settled transactions.

Our credit exposure is based on our derivative assets and accounts receivable from our counterparties, after taking into consideration netting within each contract and any master netting contracts with counterparties. We believe this represents the maximum potential loss we could incur if our counterparties failed to perform according to their contract terms.

F-12

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of December 31, 2009, our derivative assets and accounts receivable, after taking into consideration netting within each contract and any master netting contracts with counterparties, are:

	Exposure		Credit		Exposure		Number of			Net Exposure of
	Before		Collateral		Net of		Counterparties			Counterparties
Credit Rating Equivalent	Collateral(1)(2)		Held(3)		Collateral		>10%			>10%
	(dollars in millions)
Investment grade	$	126	$	12	$	114		3	(4)	$	91
Non-investment grade		3		3		—		—			—
No external ratings:
Internally rated — Investment grade		48		—		48		1	(5)		42
Internally rated — Non-investment grade		17		16		1		—			—
Total	$	194	$	31	$	163		4		$	133

(1)	The table includes amounts related to certain contracts classified as discontinued operations in our consolidated balance sheets. These contracts settle through the expiration date in 2013.
(2)	The table excludes amounts related to contracts classified as normal purchase/normal sale and non-derivative contractual commitments that are not recorded in our consolidated balance sheets, except for any related accounts receivable. Such contractual commitments contain credit and economic risk if a counterparty does not perform. Nonperformance could have a material adverse impact on our future results of operations, financial condition and cash flows.
(3)	Collateral consists of cash, standby letters of credit and other forms approved by management.
(4)	These counterparties are two power grid operators and one financial institution.
(5)	This counterparty is a financial institution.

As of December 31, 2008, three investment grade counterparties (a financial institution and two power grid operators) represented 63% ($156 million) of our credit exposure.

Based on our current credit ratings, any additional collateral postings that would be required from us due to a credit downgrade would be immaterial. As of December 31, 2009 and December 31, 2008, we have posted cash margin deposits of $117 million and $70 million, respectively, as collateral for our derivative liabilities receiving mark-to-market accounting treatment and our accounts payable (classified either as continuing or discontinued operations). Additionally, as of December 31, 2009 and 2008, we have $5 million and $103 million, respectively, in letters of credit issued as collateral for our derivative liabilities receiving mark-to-market accounting treatment and our accounts payable (classified either as continuing or discontinued operations). See note 7.

(g)   Property, Plant and Equipment and Depreciation Expense.

We compute depreciation using the straight-line method based on estimated useful lives. Depreciation expense was $241 million, $241 million and $283 million during 2009, 2008 and 2007, respectively.

F-13

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	Estimated Useful		December 31,
	Lives (Years)		2009			2008
			(in millions)
Electric generation facilities		5 - 35	$	5,378	(1)	$	5,481	(2)
Building and building improvements		5 - 15		13			27
Land improvements		20 - 35		191			206
Other		3 - 10		254			241
Land				109			82
Assets under construction				386			381
Total				6,331			6,418
Accumulated depreciation				(1,729	)		(1,598	)
Property, plant and equipment, net			$	4,602		$	4,820

(1)	Includes $234 million ($212 million net of accumulated depreciation) relating to leasehold improvements for the Keystone, Shawville and Conemaugh plants. The original depreciation periods for these leasehold improvements range from primarily 10 to 31 years.
(2)	Includes $169 million ($152 million net of accumulated depreciation) relating to leasehold improvements for the Keystone, Shawville and Conemaugh plants.

See note 4 for discussion of our recoverability assessments of long-lived assets (property, plant and equipment and related intangible assets) and the impairments recognized during 2009 for our New Castle and Indian River plants.

(h)   Intangible Assets and Amortization Expense.

Goodwill.  We performed our goodwill impairment test annually on April 1 and when events or changes in circumstances indicated that the carrying value may not have been recoverable. During 2008, we impaired our remaining goodwill of continuing operations. See note 5.

Other Intangibles.  We recognize specifically identifiable intangible assets, including emission allowances, power generation site permits and water rights, when specific rights and contracts are acquired. We have no intangible assets with indefinite lives recorded as of December 31, 2009 and 2008. See note 4 for discussion of our recoverability assessments of long-lived assets (property, plant and equipment and related intangible assets) and the impairments recognized during 2009 for our New Castle and Indian River plants.

(i)   Capitalization of Interest Expense.

We capitalize interest on capital projects greater than $10 million and under development for one year or more. During 2009, 2008 and 2007, we capitalized $23 million, $17 million and $4 million of interest expense, respectively, relating primarily to environmental capital expenditures for SO₂ emission reductions at the Cheswick and Keystone plants.

(j)   Cash and Cash Equivalents.

We record all highly liquid short-term investments with maturities of three months or less as cash equivalents.

(k)   Restricted Cash.

Restricted cash includes cash at certain subsidiaries, the distribution or transfer of which is restricted by financing and other agreements.

(l)   Inventory.

We value fuel inventories at the lower of average cost or market. We reduce these inventories as they are used in the production of electricity or sold. During 2009, 2008 and 2007, we recorded $101 million,

F-14

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

$40 million and $5 million, respectively, for lower of average cost or market valuation adjustments in cost of sales. We value materials and supplies at average cost. We remove these inventories when they are used for repairs, maintenance or capital projects. Sales of fuel inventory are classified as operating activities in the consolidated statement of cash flows.

	December 31,
	2009		2008
	(in millions)
Materials and supplies, including spare parts	$	187	$	159
Coal		97		90
Natural gas		14		25
Heating oil		34		41
Total inventory	$	332	$	315

(m)   Environmental Costs.

We expense environmental expenditures related to existing conditions that do not have future economic benefit. We capitalize environmental expenditures for which there is a future economic benefit. We record liabilities for expected future costs, on an undiscounted basis, related to environmental assessments and/or remediation when they are probable and can be reasonably estimated. See note 16(b).

(n)   Asset Retirement Obligations.

Our asset retirement obligations relate to future costs primarily associated with dismantling power plants and coal ash disposal site closures. Changes in asset retirement obligations, classified in other long-term liabilities, are:

	2009			2008
	(in millions)
Balance, beginning of period	$	19		$	21
Revisions in estimated cash flows		8	(1)		(1	)
Payments		(4	)		(1	)
Accretion expense		2			2
Other, net		1			(2	)
Balance, end of period	$	26		$	19

(1) Primarily relates to changes in timing of expected closures and higher estimated costs.

As of December 31, 2009 and 2008, we have $20 million and $18 million, respectively (classified in other long-term assets) on deposit with the state of Pennsylvania to guarantee our obligation related to future closures of coal ash disposal landfill sites. See note 16(b).

(o)   Repair and Maintenance Costs for Power Generation Assets.

We expense repair and maintenance costs as incurred.

F-15

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(p)   Deferred Financing Costs.

We incur costs, which are deferred and amortized over the life of the debt, in connection with obtaining financings. See note 7. Changes in deferred financing costs, classified in other long-term assets, are:

	2009			2008			2007
	(in millions)
Balance, beginning of period	$	54		$	62		$	86
Capitalized		—			—			31
Amortized		(7	)		(7	)		(9	)
Accelerated amortization/write-offs(1)		(5	)		(1	)		(41	)
Channelview deconsolidation		—			—			(5	)
Balance, end of period	$	42		$	54		$	62

(1) Amounts are considered a portion of the net carrying value of the related debt and are expensed when accelerated as a component of debt extinguishments.

(q)   New Accounting Pronouncements Adopted.

FASB Codification.  The Financial Accounting Standards Board’s Accounting Standards Codification became effective for us in the third quarter of 2009. The Codification brings together in one place all authoritative GAAP except for rules, regulations and interpretative releases of the Securities and Exchange Commission which are also authoritative GAAP for us. This change did not materially affect our consolidated financial statements.

Measuring Liabilities at Fair Value.  This guidance provides clarification for measuring liabilities at fair value when there may be a lack of observable market information and requires an entity under those circumstances to employ techniques that use (a) the quoted price of the identical liability when traded as an asset, (b) quoted prices for similar liabilities or similar liabilities when traded as assets or (c) another valuation technique consistent with the fair value measurement principles such as an income approach or a market approach. This change did not impact our consolidated financial statements. See note 2(d).

Disclosures about Plan Assets.  This guidance requires enhanced disclosures regarding investment policies and strategies for our benefit plan assets as well as information about fair value measurements of plan assets. See note 11.

Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly.  This guidance provides direction on how to determine the fair value of certain assets and liabilities when there has been a significant decrease in the volume and level of activity for an asset or liability compared with normal market activity for the asset or liability. This guidance did not have a significant impact on our consolidated financial statements since the markets in which we purchase and sell commodities and derivative instruments are not distressed. See notes 2(d) and 6.

(r)   New Accounting Pronouncements Not Yet Adopted.

Improving Financial Reporting Around Variable Interest Entities.  For 2007, 2008 and 2009, we do not have any off-balance sheet arrangements to report under requirements effective prior to 2010. In connection with related amended accounting guidance for variable interest entities, which is effective as of January 1, 2010, we are assessing (a) our REMA leases for our interests in the Conemaugh, Keystone and Shawville plants (see note 15(a)) and (b) the tolling agreement at the Vandolah plant whereby we provide our own fuel for operations and take all the power generated (see note 15(a)). If (a) the single power plant legal entities, which own the plants or our interests in the plants are determined to be variable interest entities, (b) our contracts are determined to be or contain variable interests in those entities and (c) we have the power to direct the activities of the entities that most significantly impact the entities’ economic performance and the obligation to absorb losses of or the right to receive benefits from the entities that could be significant to the

F-16

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

entities, we would be required to consolidate the entities, which could materially change our future financial statements.

Improving Disclosures about Fair Value Measurements.  Effective for our first quarter 2010 Form 10-Q, this guidance provides for disclosures of significant transfers in and out of Levels 1 and 2. In addition, it clarifies existing disclosure requirements regarding inputs and valuation techniques as well as the appropriate level of disaggregation for fair value measurements disclosures. Effective for the 2011 financial statements, this guidance provides for disclosures of activity on a gross basis within the Level 3 reconciliation. These changes will only affect our disclosures.

(3)   Related Party Transactions

Indemnities and Releases.  As part of our separation from CenterPoint, we agreed to indemnify our former parent company for liabilities associated with the business we acquired. See notes 14(d), 15(b) and 16(c).

(4)   Long-Lived Assets Impairments

We periodically evaluate the recoverability of our long-lived assets (property, plant and equipment and intangible assets), which involves significant judgment and estimates, when there are certain indicators (see below) that the carrying value of these assets may not be recoverable. As of December 31, 2009, we had $4.9 billion of long-lived assets. This estimate affects all segments, which hold 99% of our total net property, plant and equipment and net intangible assets. Our East Coal segment holds the largest portion of our net property, plant and equipment and net intangible assets at 59% of our consolidated total. See notes 2(g) and 5.

We evaluate our long-lived assets when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Examples of such events or changes in circumstances are:

•  a significant decrease in the market price of a long-lived asset

•  a significant adverse change in the manner an asset is being used or its physical condition

•  an adverse action by a regulator or legislature or an adverse change in the business climate

•  an accumulation of costs significantly in excess of the amount originally expected for the construction or acquisition of an asset

•  a current-period loss combined with a history of losses or the projections of future losses

•  a change in our intent about an asset from an intent to hold to a greater than 50% likelihood that an asset will be sold or disposed of before the end of its previously estimated useful life

When we believe an impairment condition may have occurred, we are required to estimate the undiscounted future cash flows associated with a long-lived asset or group of long-lived assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities for long-lived assets that are expected to be held and used. Each plant (including its property, plant and equipment and intangible assets) was determined to be its own group.

The determination of impairment is a two-step process, the first of which involves comparing the undiscounted cash flows to the carrying value of the asset. If the carrying value exceeds the undiscounted cash flows, the fair value of the asset must be determined. The fair value of an asset is the price that would be received from a sale of the asset in an orderly transaction between market participants at the measurement date. Quoted market prices in active markets are the best evidence of fair value and are used as the basis for the measurement, when available. In the absence of quoted prices for identical or similar assets, fair value is estimated using various internal and external valuation methods. These methods include discounted cash flow analyses and reviewing available information on comparable transactions.

F-17

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Key Assumptions.  The following summarizes some of the most significant estimates and assumptions used in evaluating our plant level undiscounted cash flows. The ranges for the fundamental view assumptions are to account for variability by year and region.

	December 31, 2009
Undiscounted Cash Flow Scenarios Weightings:
5-year market forecast with escalation(1)(2)	50%
5-year market forecast with fundamental view(1)	50%
Range of Assumptions in Fundamental View:
Demand for power growth per year	1%-2%
After-tax rate of return on new construction(3)	6.5%-9.5%
Spread between natural gas and coal prices, $/MMBTU(4)	$3-$5

(1)	For each scenario, the first five years of cash flows are the same.
(2)	We assumed an annual 2.5% escalation percentage beyond year five.
(3)	The low to mid part of the range represents natural gas-fired plants’ required returns and the mid to high part of the range represents coal-fired and nuclear plants’ required returns.
(4)	Natural gas and coal prices are prior to transportation costs.

Our Indian River plant is located in Florida where the merchant power market is primarily bilateral. This plant had historically generated most of its revenues and gross margin from power purchase agreements, which expired in 2009. Therefore, we believed it was more meaningful to develop different assumptions for our Indian River plant. We estimated the cash flows and probability weightings around five different scenarios. Four of the scenarios (weighted for a combined 70%) included power purchase agreements for varying time periods and ultimate sale of the plant and the remaining scenario (weighted at 30%) included a sale only.

We estimate the undiscounted cash flows of our plants based on a number of subjective factors, including: (a) appropriate weighting of undiscounted cash flow scenarios, as shown in the table above, (b) forecasts of future power generation margins, (c) estimates of our future cost structure, (d) environmental assumptions, (e) time horizon of cash flow forecasts and (f) estimates of terminal values of plants, if necessary, from the eventual disposition of the assets. We did not include the cash flows associated with our economic hedges in our PJM region (East Coal and East Gas segments) as these cash flows are not specific to any one plant.

Under the 5-year market forecast with escalation scenario, we use the following data: (a) forward market curves for commodity prices as of December 18, 2009 for the first five years, (b) cash flow projections through the plant’s estimated remaining useful life and (c) escalation factor of cash flows of 2.5% per year after year five.

Under the 5-year market forecast with fundamental view scenario, we model all of our plants and those of others in the regions in which we operate, using these assumptions: (a) forward market curves for commodity prices as of December 18, 2009 for the first five years; (b) ranges shown in the table above used in developing our fundamental view beyond five years; (c) the markets in which we operate will continue to be deregulated and earn margins based on forward or projected market prices; (d) projected market prices for energy and capacity will be set by the forecasted available supply and level of forecasted demand—new supply will enter markets when market prices and associated returns, including any assumed subsidies for renewable energy, are sufficient to achieve minimum return requirements; (e) minimum return requirements on future construction of new generation facilities, as shown in the table above, will likely be driven or influenced by utilities, which we expect will have a lower cost of capital than merchant generators; (f) various ranges of environmental regulations, including those for SO₂, NO_x and greenhouse gas emissions; and (g) cash flow projections through the plant’s estimated remaining useful life.

Fair Value.  Generally, fair value will be determined using an income approach or a market-based approach. Under the income approach, the future cash flows are estimated as described above and then discounted using a risk-adjusted rate. Under a market-based approach, we may also consider prices of similar assets, consult with brokers or employ other valuation techniques.

F-18

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following are key assumptions used in our fair value analyses for our two plants for which the undiscounted cash flows did not exceed the net book value of the long-lived assets.

	New Castle			Indian River
Valuation approach weightings:
Income approach		100	%		100	%
Market-based approach		0	%		0	%
Risk-adjusted discount rate for the estimated cash flows		15	%		15	%

We only used the income approach as we believe no relevant market data exists for these two plants for which we were required to estimate fair value. The discount rates reflect the uncertainty of the plants’ cash flows and their inability to support meaningful amounts of debt, and was determined considering factors such as the potential for future capacity and power purchase agreement revenues and regulatory, commodity and macroeconomic conditions.

We determined that our New Castle plant, which consists of property, plant and equipment, was impaired by $120 million as of December 31, 2009. This impairment was primarily due to the expected levels of low profitability given that the plant would likely require significant environmental capital expenditures in the future under existing and likely environmental regulations. We determined that our Indian River plant, which consists of property, plant and equipment and various intangible assets (water rights, permits and emission allowances), was impaired by $91 million as of December 31, 2009. This impairment was primarily due to a power purchase agreement with a utility in Florida expiring in December 2009 and because of the uncertainty that a replacement power purchase agreement will occur for the foreseeable future. We believe the remaining net book values of $44 million for New Castle and $52 million for Indian River represent our best estimates of fair values as of December 31, 2009.

Certain disclosures are required about nonfinancial assets and liabilities measured at fair value on a nonrecurring basis. This applies to our long-lived assets for which we were required to determine fair value. A fair value hierarchy exists for inputs used in measuring fair value that maximizes the use of observable inputs (Level 1 or Level 2) and minimizes the use of unobservable inputs (Level 3) by requiring that the observable inputs be used when available. See note 2(d) for further discussion about the three levels. These assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and affects the valuation of fair value and the assets’ placement within the fair value hierarchy levels.

	December 31,						2009
	2009						Impairment
	Level 1		Level 2		Level 3		Charges
	(in millions)
New Castle property, plant and equipment(1)	$	—	$	—	$	44	$	120
Indian River property, plant and equipment, water rights, permits and emission allowances(2)		—		—		52		91
Total	$	—	$	—	$	96	$	211

(1)	New Castle is in our East Coal segment.
(2)	Indian River is in our Other segment.

Effect if Different Assumptions Used.  The estimates and assumptions used to determine whether long-lived assets are recoverable or whether impairment exists are subject to high degree of uncertainty. Different assumptions as to power prices, fuel costs, our future cost structure, environmental assumptions and remaining useful lives and ultimate disposition values of our plants would result in estimated future cash flows that could be materially different than those considered in the recoverability assessments as of December 31, 2009 and could result in having to estimate the fair value of other plants.

F-19

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Use of a different risk-adjusted discount rate would result in fair value estimates for the two plants for which we recorded an impairment in 2009 that could be materially greater than or less than the fair value estimates as of December 31, 2009. Any future fair value estimates for our New Castle and Indian River long-lived assets that are greater than the fair value estimates as of December 31, 2009 will not result in reversal of the 2009 impairment charges.

(5)   Intangible Assets

(a)   Goodwill.

The following table shows the changes in goodwill for 2008 (in millions):

As of January 1, 2008	$	327
Goodwill impairment		(305	)
Other changes		(22	)(1)
As of December 31, 2008	$	—

(1) Relates to the sale of our Channelview plant in July 2008 ($5 million) and the sale of our Bighorn plant in October 2008 ($17 million). See notes 21 and 22.

As of December 31, 2009 and 2008, we had $39 million and $47 million, respectively, of goodwill that is deductible for United States income tax purposes in future periods.

We tested goodwill for impairment on an annual basis in April (through 2008), and more often if events or circumstances indicated there may have been impairment. We historically (through the second quarter of 2009) had two reporting segments: wholesale energy and retail energy. Goodwill impairment testing was performed at the reporting unit level, which was consistent with our reporting segments. We continually assessed whether any indicators of impairment existed, which required a significant amount of judgment. Such indicators may have included a sustained significant decline in our share price and market capitalization; a decline in our expected future cash flows; a significant adverse change in legal factors or in the business climate; unanticipated competition; overall weaknesses in our industry; and slower growth rates. Any adverse change in these factors could have had a significant impact on the recoverability of goodwill and could have had a material impact on our consolidated financial statements.

During April 2008, we tested goodwill for impairment and determined that no impairments existed.

During the third and fourth quarters of 2008, given adverse changes in the business climate and the credit markets, our market capitalization being lower than our book value during all of the fourth quarter and extending into 2009, our review of strategic alternatives to enhance stockholder value and reductions in our expected near-term cash flows from operations, we reviewed our goodwill for impairment. We concluded that no goodwill impairments occurred as of September 30, 2008. As discussed below, as of December 31, 2008, we concluded that our historical wholesale energy segment’s goodwill of $305 million was impaired.

Goodwill was reviewed for impairments based on a two-step test. In the first step, we compared the fair value of each reporting unit with its net book value. We applied judgment in determining the fair value of our reporting units for purposes of performing our goodwill impairment tests because quoted market prices for our reporting units were not available. In estimating the fair values of the reporting units, we used a combination of an income approach and a market-based approach.

•  Income approach—We discounted the expected cash flows of each reporting unit. The discount rate used represented the estimated weighted average cost of capital, which reflected the overall level of inherent risk involved in our operations and cash flows and the rate of return an outside investor would expect to earn. To estimate cash flows beyond the final year of our model, we applied a terminal value multiple to the final year EBITDA.

•  Market-based approach—We used the guideline public company method, which focused on comparing our risk profile and growth prospects to select reasonably similar/guideline publicly traded companies.

F-20

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

We also used a public transaction method, which focused on exchange prices in actual transactions as an indicator of fair value.

In weighting the results of the various valuation approaches, prior to the fourth quarter of 2008, we placed more emphasis on the income approach, using management’s future cash flow projections for each reporting unit and risk-adjusted discount rates. As our earnings outlook declined, our earnings variability increased and our market capitalization declined significantly in 2008, we increased the weighting of the estimates of fair value of our reporting units determined by the market-based approaches. Further, the aggregate estimated fair value of our reporting units was compared to our total market capitalization, adjusted for a control premium. A control premium was added to the market capitalization to reflect the value that existed with having control over an entire entity.

If the estimated fair value of the reporting unit was higher than the recorded net book value, no impairment was considered to exist and no further testing was required. However, if the estimated fair value of the reporting unit was below the recorded net book value, a second step must be performed to determine the goodwill impairment required, if any. In the second step, the estimated fair value from the first step was used as the purchase price in a hypothetical acquisition of the reporting unit, which was then allocated to the reporting unit’s assets and liabilities in accordance with purchase accounting rules. The residual amount of goodwill that resulted from this hypothetical purchase price allocation was compared to the recorded amount of goodwill for the reporting unit, and the recorded amount was written down to the hypothetical amount, if lower.

Estimation of our Historical Wholesale Energy Reporting Unit’s Fair Value.  We estimated the fair value of our wholesale energy reporting unit based on a number of subjective factors, including: (a) appropriate weighting of valuation approaches, as discussed above, (b) projections about the future power generation margins, (c) estimates of our future cost structure, (d) environmental assumptions, (e) risk-adjusted discount rates for our estimated cash flows, (f) selection of peer group companies for the public company market approach, (g) required level of working capital, (h) assumed EBITDA multiple for terminal values and (i) time horizon of cash flow forecasts.

As part of our process, we developed 15-year forecasts of earnings and cash flows, assuming that demand for power grows at the rate of two percent a year. We modeled all of our power generation facilities and those of others in the regions in which we operate, using these assumptions: (a) the markets in which we operate will continue to be deregulated and earn a market return; (b) there will be a recovery in electricity margins over time such that companies building new generation facilities can earn a reasonable rate of return on their investment, which implies that margins and therefore cash flows in the future would be better than they are today because market prices will need to rise high enough to provide an incentive for new plants to be built, and the entire market will realize the benefit of those higher margins and (c) the long-term returns on future construction of new generation facilities will likely be driven by integrated utilities, which we expect will have a lower cost of capital than merchant generators, which implies that the revenues and margins described in (b) above will be at the level of return required for a regulated entity instead of a deregulated company. We assumed that the after-tax rate of return on new construction was 7.5%.

F-21

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Our assumptions for each of our goodwill impairment assessments during 2007 and 2008:

	April			April			September			December
	2007			2008			2008			2008
Income approach assumptions
EBITDA multiple for terminal values(1)		8.0			8.0			7.0			7.0
Risk-adjusted discount rate for our estimated cash flows(2)		9.5	%		10.0	%		11.0	%		13.0	%
Market-based approach assumptions
EBITDA multiple for publicly traded company		8			8			5			6
Valuation approach weightings(3)
Income approach		70	%		60	%		80	%		25	%
Market-based approach		30	%		40	%		20	%		75	%

(1)	Changed primarily due to market factors affecting peer company comparisons.
(2)	Increased primarily due to capital structure of peer company comparisons and increased required rate of return on debt and equity capital of peer companies.
(3)	Changed primarily due to increased focus on market-based approaches. See discussion above.

Based on our analysis, we concluded that the wholesale energy reporting unit did not pass the first step as of December 31, 2008, primarily due to lower expected cash flows due to the adverse business climate, significantly lower expected exchange transaction values due to credit market disruptions which would make it difficult for transactions to occur and increase the price of those transactions and significantly lower valuations for our peer companies. In addition, when we compared the aggregate of our fair value estimates of both reporting units to our market capitalization, including a control premium, we determined that the market participants’ views of our fair value had also declined significantly.

We then performed the second step of the impairment test, which required an allocation of the fair value as the purchase price in a hypothetical acquisition of the reporting unit. The significant hypothetical purchase price allocation adjustments made to the assets and liabilities of our wholesale energy reporting unit consisted of the following:

•  Adjusting the carrying value of our property, plant and equipment to values that would be expected in the current credit and market environment

•  Adjusting the carrying value of our emission allowances, which then traded at amounts significantly higher than our book value

•  Adjusting the carrying value of our debt, which had a lower fair value than our book value

•  Adjusting deferred income taxes for changes in the balances listed above

After making these hypothetical adjustments, no residual value remained for a goodwill allocation resulting in the impairment of our historical wholesale energy reporting unit’s goodwill net carrying amount of $305 million as of December 31, 2008.

F-22

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(b)   Other Intangibles.

	Remaining
	Weighted			December 31,
	Average			2009						2008
	Amortization			Carrying			Accumulated			Carrying			Accumulated
	Period (Years)			Amount			Amortization			Amount			Amortization
							(in millions)
SO2 emission allowances(1)(2)		—	(1)	$	140	(3)	$	(14	)(3)	$	178	(4)	$	(51	)(4)
NOx emission allowances(1)(5)		—	(1)		142	(3)		(2	)(3)		145	(4)		—	(4)
Power generation site permits(6)		23			41	(7)		(7	)(7)		73			(14	)
Water rights(6)		5			5	(8)		—	(8)		67			(18	)
Other		—			1			—			—			—
Total				$	329		$	(23	)	$	463		$	(83	)

(1)	Amortized to amortization expense on a units-of-production basis. As of December 31, 2009, we have recorded (a) SO2 emission allowances through the 2039 vintage year and (b) NOx emission allowances through the 2039 vintage year.
(2)	During 2009, 2008 and 2007, we purchased $19 million, $48 million and $89 million, respectively, of SO2 emission allowances.
(3)	During 2009, we wrote off the fully amortized carrying amount and accumulated amortization for SO2 and NOx emission allowances surrendered of $56 million and $6 million, respectively.
(4)	During 2008, we wrote off the fully amortized carrying amount and accumulated amortization for SO2 and NOx emission allowances surrendered of $313 million and $200 million, respectively.
(5)	During 2009, 2008 and 2007, we purchased $3 million, $13 million and $3 million, respectively, of NOx emission allowances.
(6)	Amortized to amortization expense on a straight-line basis over the estimated lives.
(7)	During 2009, we recognized an impairment charge of $21 million relating to permits at our Indian River plant. See note 4.
(8)	During 2009, we recognized an impairment charge of $43 million relating to water rights at our Indian River plant. See note 4.

	2009		2008		2007
	(in millions)
Amortization of emission allowances	$	24	$	68	$	110
Amortization of power generation site permits, water rights and other		4		4		5
Total amortization expense	$	28	$	72	$	115

Estimated amortization expense based on our intangibles as of December 31, 2009 for the next five years is (in millions):

2010	$	17	(1)
2011		15	(1)
2012		15	(1)
2013		14	(1)
2014		14	(1)

(1) These amounts do not include expected amortization expense of emission allowances not purchased as of December 31, 2009.

F-23

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(6)   Derivatives and Hedging Activities

We use derivative instruments to manage operational or market constraints and to increase return on our generation assets. See note 2(e).

As of December 31, 2009 and 2008, we do not have any designated cash flow hedges. Amounts included in accumulated other comprehensive loss are:

	December 31, 2009
			Expected to be
			Reclassified into
			Results of Operations
	At the End of the Period		in Next 12 Months
	(in millions)
De-designated cash flow hedges, net of tax(1)(2)	$	34	$	14

(1)	No component of the derivatives’ gain or loss was excluded from the assessment of effectiveness.
(2)	During 2009, 2008 and 2007, $0 was recognized in our results of operations as a result of the discontinuance of cash flow hedges because it was probable that the forecasted transaction would not occur.

As of December 31, 2009, our commodity derivative assets and liabilities include amounts for non-trading and trading activities as follows:

	Derivative Assets				Derivative Liabilities						Net Derivative
	Current		Long-Term		Current			Long-Term			Assets (Liabilities)
	(in millions)
Non-trading	$	66	$	53	$	(105	)	$	(61	)	$	(47	)
Trading		66		—		(47	)		—			19
Total derivatives	$	132	$	53	$	(152	)	$	(61	)	$	(28	)

We have the following derivative commodity contracts outstanding as of December 31, 2009:

			Notional Volumes(2)
Commodity	Unit(1)		Current			Long-term
			(in millions)
Power		MWh		(5	)		(6	)
Capacity energy		MWh		(2	)		(1	)
Natural gas(3)		MMBTU		(3	)		24
Natural gas basis		MMBTU		(5	)		—
Coal		MMBTU		122			176

(1)	MWh is megawatt hours and MMBTU is million British thermal units.
(2)	Negative amounts indicate net forward sales.
(3)	Includes current and long-term volumes related to purchases of put options.

F-24

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The income (loss) associated with our energy derivatives during 2009 is:

Derivatives not Designated as Hedging Instruments(1)	Revenues			Cost of Sales
	(in millions)
Non-Trading Commodity Contracts:
Unrealized(2)	$	(44	)	$	77
Realized(3)(4)(5)		371			(217	)
Total non-trading	$	327		$	(140	)
Trading Commodity Contracts:
Unrealized(2)	$	—		$	(11	)
Realized(3)		—			21
Total trading	$	—		$	10

(1)	We had interest rate swaps that were liquidated in 2002 and the related deferred losses in accumulated other comprehensive loss are being amortized into interest expense through 2012. An insignificant amount was amortized during 2009 and 2008. We amortized $5 million during 2007.
(2)	As discussed in note 2(e), during 2007, we de-designated our remaining cash flow hedges; the amount reflected here subsequent to that time relates to previously measured ineffectiveness reversing due to settlement of the derivative contracts.
(3)	Does not include realized gains or losses associated with cash month transactions, non-derivative transactions or derivative transactions that qualify for the normal purchase/normal sale exception.
(4)	Excludes settlement value of fuel contracts classified as inventory upon settlement.
(5)	Includes gains or losses from de-designated cash flow hedges reclassified from accumulated other comprehensive loss due to settlement of the derivative contracts. See note 2(e).

Trading Activities.  Prior to March 2003, we engaged in proprietary trading activities. Trading positions entered into prior to our decision to exit this business are being closed on economical terms or are being retained and settled over the contract terms. In addition, we have current transactions relating to non-core asset management, such as gas storage and transportation contracts not tied to generation assets, which are classified as trading activities. The income (loss) associated with these transactions is:

	2009		2008			2007
	(in millions)
Revenues	$	1	$	(8	)	$	1
Cost of sales		19		33			18
Total(1)	$	20	$	25		$	19

(1) Includes realized and unrealized gains and losses on both derivative instruments and non-derivative instruments.

F-25

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(7)   Debt

(a)   Overview.

	December 31,
	2009							2008
	Weighted							Weighted
	Average							Average
	Stated							Stated
	Interest							Interest
	Rate(1)			Long-term		Current		Rate(1)			Long-term			Current
	(in millions, except interest rates)
Facilities, Bonds and Notes:
RRI Energy:
Senior secured revolver due 2012		1.98	%	$	—	$	—		3.18	%	$	—		$	—
Senior secured notes due 2014		6.75			279		—		6.75			498	(2)		—
Senior unsecured notes due 2014		7.625			575		—		7.625			575			—
Senior unsecured notes due 2017		7.875			725		—		7.875			725			—
Subsidiary Obligations:
Orion Power Holdings, Inc. senior notes due 2010 (unsecured)		12.00			—		400		12.00			400			—
PEDFA(3) fixed-rate bonds due 2036		6.75			371		—		6.75			408	(4)		—
Total facilities, bonds and notes					1,950		400					2,606			—
Other:
Adjustment to fair value of debt(5)					—		5					4			13
Total other debt					—		5					4			13
Total debt				$	1,950	$	405				$	2,610	(6)	$	13

(1)	The weighted average stated interest rates are as of December 31, 2009 or 2008.
(2)	Excludes $169 million classified as discontinued operations. See note 23.
(3)	PEDFA is the Pennsylvania Economic Development Financing Authority. These bonds were issued for our Seward plant.
(4)	Excludes $92 million classified as discontinued operations. See note 23.
(5)	Debt acquired in the acquisition of Orion Power Holdings, Inc. (Orion Power Holdings) and subsidiaries (Orion Power) was adjusted to fair value as of the acquisition date. Included in interest expense is amortization of $12 million, $11 million and $11 million for valuation adjustments for debt during 2009, 2008 and 2007, respectively.
(6)	Excludes $261 million classified as discontinued operations. See note 23.

Amounts borrowed and available for borrowing under our revolving credit agreements as of December 31, 2009 are:

	Total Committed		Drawn		Letters		Unused
	Credit		Amount		of Credit		Amount
	(in millions)
RRI Energy senior secured revolver due 2012	$	500	$	—	$	—	$	500
RRI Energy letter of credit facility due 2014		250		—		81		169
Total	$	750	$	—	$	81	$	669

F-26

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Debt maturities as of December 31, 2009 are:

			RRI Energy
	RRI Energy		Consolidated
	(in millions)
2010	$	—	$	400
2011		—		—
2012		—		—
2013		—		—
2014		854		854
2015 and thereafter		725		1,096
	$	1,579	$	2,350

(b)   Significant Financing Activity.

2009 Debt Reduction Activity.  We completed the following secured debt reduction activities:

•  Senior secured 6.75% notes:

•  $127 million through cash tender offer

•  $92 million through open market purchases

•  These transactions resulted in net loss on extinguishments of $6 million related to the difference between the amounts paid and the net carrying value of the debt

•  PEDFA fixed-rate bonds:

•  $35 million through open market purchases

•  $2 million through cash tender offer

•  These transactions resulted in net loss on extinguishments of $2 million related to the difference between the amounts paid and the net carrying value of the debt

•  $261 million of our senior secured 6.75% notes ($169 million) and PEDFA fixed-rate bonds ($92 million) purchased with the net proceeds from the sale of our Texas retail business and classified as discontinued operations (see note 23)

2007 Financing Activity.  We completed a refinancing in June 2007, the components of which included:

•  Downsize of:

•  $700 million to $500 million senior secured revolver and extension of maturity from 2009 to 2012

•  $300 million to $250 million senior secured letter of credit facility and extension of maturity from 2010 to 2014

•  Issuance of:

•  $575 million 7.625% senior unsecured notes due 2014

•  $725 million 7.875% senior unsecured notes due 2017

•  Repayment of:

•  $521 million 9.25% senior secured notes due 2010

•  $537 million 9.50% senior secured notes due 2013

•  $400 million senior secured term loan due 2010

F-27

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(c)   Credit Facilities and Debt.

Senior Secured Revolver and Letter of Credit Facility (the June 2007 credit facilities).  We entered into the June 2007 credit facilities, which replaced our December 2006 credit facilities. The senior secured revolver bears interest at the London Inter Bank Offered Rate (LIBOR) plus 1.75% or a base rate plus 0.75%. Our revolving credit facility and letter of credit facility provide for the issuance of up to $500 million and $250 million of letters of credit, respectively.

The June 2007 credit facilities restrict our ability to, among other actions, (a) encumber our assets, (b) enter into business combinations or divest our assets, (c) incur additional debt or engage in sale and leaseback transactions, (d) pay dividends or pay subordinated debt, (e) enter into some transactions with affiliates, (f) materially change our business or (g) repurchase capital stock. When there are any revolving loans or revolving letters of credit outstanding under our June 2007 credit facilities, our consolidated net secured debt must not exceed four times adjusted net earnings (loss) before interest expense, interest income, income taxes, depreciation and amortization (consolidated secured leverage ratio). As of December 31, 2009, there were no revolving loans or revolving letters of credit outstanding.

The June 2007 credit facilities are guaranteed by and secured by the assets and stock of some of our subsidiaries. See note 18.

Senior Secured 6.75% Notes.  The senior secured notes are guaranteed by and secured by the assets and stock of some of our subsidiaries. See note 17. If our June 2007 credit facilities become unsecured and certain credit ratios are achieved for two consecutive quarters, the senior secured notes will become unsecured. Upon a change of control, the notes require that an offer to purchase the notes be made at a purchase price of 101% of the principal amount. The senior secured notes have negative covenants similar to the negative covenants in our June 2007 credit facilities. During 2009, 2008 and 2007, we repurchased $219 million, $45 million and $38 million, respectively.

Senior Unsecured 7.625% and 7.875% Notes.  In June 2007, we issued $575 million of 7.625% senior unsecured notes due 2014 and $725 million of 7.875% senior unsecured notes due 2017. These notes are unsecured obligations and not guaranteed. The unsecured notes restrict our ability to encumber our assets. Upon a change of control, the notes require that an offer to purchase the notes be made at a purchase price of 101% of the principal amount. The proceeds of this issuance were used to repay the tendered 9.25% and 9.50% senior secured notes and a portion of the senior secured term loan.

Senior Unsecured 9.25% and 9.50% Notes.  In June 2007, we completed a tender offer to purchase for cash any and all of the outstanding 9.25% senior secured notes due 2010 and 9.50% senior secured notes due 2013. We also solicited consents to (a) amend the applicable indentures governing the notes to eliminate substantially all of the restrictive covenants, (b) amend certain events of default, (c) modify other provisions contained in the indentures and (d) release the collateral securing the notes. Approximately 94.81% of the 2010 note holders and 97.73% of the 2013 note holders accepted the tender offer and agreed to the consents. We paid a cash premium of $50 million and a consent solicitation fee of $21 million to the note holders who tendered during 2007.

In July 2007, we called the remaining $29 million of our 2010 notes. In July 2008, we called the remaining $13 million of our 2013 notes.

Orion Power Holdings Senior Notes.  These notes were recorded at a fair value of $479 million upon the acquisition of Orion Power. The $79 million premium is being amortized to interest expense over the life of the notes. The senior notes are senior unsecured obligations of Orion Power Holdings, are not guaranteed by any of Orion Power Holdings’ subsidiaries and are non-recourse to RRI Energy. The senior notes have covenants that restrict the ability of Orion Power Holdings and its subsidiaries to, among other actions, (a) pay dividends or pay subordinated debt, (b) incur indebtedness or issue preferred stock, (c) make investments, (d) divest assets, (e) encumber its assets, (f) enter into transactions with affiliates, (g) engage in unrelated businesses and (h) engage in sale and leaseback transactions. As of December 31, 2009, conditions

F-28

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

under these covenants that allow the payment of dividends by Orion Power Holdings were not met. As of December 31, 2009, the adjusted net assets of Orion Power that are restricted to RRI Energy are $1.3 billion.

PEDFA Fixed-Rate Bonds.  RRI Energy Wholesale Generation, LLC partially financed the construction of its Seward power plant with proceeds from the issuance of tax-exempt revenue bonds by PEDFA. These bonds are guaranteed by RRI Energy and each guarantee is secured by the same collateral as our senior secured notes and has covenants similar to the June 2007 credit facilities. If our June 2007 credit facilities become unsecured and certain ratios are achieved for two consecutive quarters, the PEDFA bonds will become secured by only certain assets of our Seward power plant. Upon a change of control, the guarantees require that an offer to purchase the bonds be made at a purchase price of 101% of the principal amount. During 2009, we purchased $37 million.

(8)   Stockholders’ Equity

The following describes our capital stock activity:

	Common Stock
	(shares in thousands)
As of January 1, 2007		337,623
Issued to benefit plans		5,562
Issued for warrants		1,384
Issued for converted debt		11
As of December 31, 2007		344,580
Issued to benefit plans		1,064
Issued for warrants		3,958
Issued for converted debt		211
As of December 31, 2008		349,813
Issued to benefit plans		2,973
As of December 31, 2009		352,786

(9)   Earnings (Loss) Per Share

The amounts used in the basic and diluted earnings (loss) per common share computations are the same.

	2009			2008			2007
	(in millions)
Loss from continuing operations (basic and diluted)	$	(479	)	$	(110	)	$	(202	)

	2009		2008		2007
	(shares in thousands)
Weighted average shares outstanding (basic and diluted)		351,396		347,823		342,467

We excluded the following items from diluted earnings (loss) per common share due to the anti-dilutive effect:

	2009			2008			2007
	(shares in thousands, dollars in millions)
Shares excluded from the calculation of diluted earnings/loss per share		537	(1)		5,290	(2)		10,234	(2)
Shares excluded from the calculation of diluted earnings/loss per share because the exercise price exceeded the average market price		4,729	(3)		2,270	(3)		2,005	(3)

(1) Primarily includes stock options and restricted stock.

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RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(2)	Primarily includes stock options and warrants.
(3)	Includes stock options.

(10)   Stock-Based Incentive Plans

Overview of Plans.  The Compensation Committee of the Board of Directors administers our stock-based incentive plans. The RRI Energy, Inc. 2002 Long-Term Incentive Plan and the RRI Energy, Inc. 2002 Stock Plan permit us to grant various stock-based incentive awards to officers, key employees and directors. Awards may include stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, cash awards and stock awards.

As of December 31, 2009, 37 million shares are authorized for issuance under our stock-based incentive plans. No more than 25% of these shares can be granted as stock-based awards other than options. We have generally issued new shares when stock options are exercised and for other equity-based awards.

Summary.  Compensation costs related to share-based transactions are recognized in the financial statements based on estimated fair values at the grant dates. We did not capitalize any stock-based compensation costs as an asset during 2009, 2008 and 2007. Our compensation expense for our stock-based incentive plans was:

	2009			2008			2007
	(in millions)
Stock-based incentive plans compensation expense (pre-tax)	$	9		$	9		$	20
Income tax impact (before impact of the valuation allowances)	$	(2	)	$	(2	)	$	(7	)

We use the alternative method to calculate excess tax benefits available to absorb tax deficiencies.

Valuation Data.  Below is the description of the methods used to estimate the fair value of our various awards.

Time-based stock options	Black-Scholes option-pricing model value on the grant date
Time-based restricted stock(1)	Market price of our common stock on the grant date
Time-based cash units(2)	Market price of our common stock on each reporting measurement date
Performance-based options(3)	Black-Scholes option-pricing model value on each reporting measurement date until accounting grant date
Market-based cash units(2)	Monte Carlo simulation valuation model value on each reporting measurement date
Employee stock purchase plan	Black-Scholes option-pricing model value on the first day of the offering period

(1)	Restricted stock and restricted stock units are referred to as “restricted stock.”
(2)	These are liability-classified awards.
(3)	No awards were granted during 2009, 2008 and 2007.

Time-Based Stock Options.  We grant time-based stock options to officers, key employees and directors at an exercise price equal to the market value of our common stock on the grant date. Generally, options vest 33.33% per year for three years and have a term of 10 years. Compensation expense is measured at fair value on the grant date, net of estimated forfeitures, and expensed on a straight-line basis over the requisite service period for the entire award.

F-30

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Summarized time-based option activity is:

	2009
				Weighted		Weighted
				Average		Average Remaining		Aggregate
				Exercise		Contractual		Intrinsic
	Options			Price		Terms (Years)		Value
								(in millions)
Beginning of period		5,718,587		$	15.58		4	$	2
Exercised		(1,352,237	)(1)		4.57
Forfeited		(154,252	)		20.75
Expired		(860,768	)		20.97
End of period		3,351,330	(2)(3)		18.40		3		1
Exercisable at the end of period		3,025,856			17.97		2		1

(1)	Received proceeds of $6 million. Intrinsic value was $3 million on the exercise dates. No tax benefits were realized in 2009 due to our net operating loss carryforwards.
(2)	We estimate that 48,018 of these will be forfeited.
(3)	As of December 31, 2009, the total compensation cost related to nonvested time-based stock options not yet recognized and the weighted-average period over which it is expected to be recognized is $2 million and one year, respectively.

	2008			2007
	(in millions, except per unit amounts)
Weighted average grant date fair value of the time-based options granted	$	9.88		$	7.32
Proceeds from exercise of time-based options		2			21
Intrinsic value of exercised time-based options		3			26
Tax benefits realized		—(1	)		—(1	)

(1) None realized due to our net operating loss carryforwards.

Our time-based stock option awards are based on the following weighted average assumptions and resulting fair value. No time-based stock option awards were granted during 2009.

	2008
Expected term in years(1)		6
Estimated volatility(2)		38.37	%
Risk-free interest rate		3.17	%
Dividend yield		0	%
Weighted-average fair value	$	9.88

(1)	The expected term is based on a binomial lattice model.
(2)	We estimate volatility based on historical and implied volatility of our common stock.

Time-Based Restricted Stock Awards.  We grant time-based restricted stock awards to officers, key employees and directors. In general, these awards vest, subject to the participant’s continued employment, three years from the grant date. In June 2009, the Compensation Committee of our Board of Directors granted 817,030 time-based restricted stock units (which are included in the time-based restricted stock awards disclosure below) to employees under our stock and incentive plans. The awards will vest in June 2012. Compensation expense is measured at fair value on the grant date, net of estimated forfeitures, and expensed on a straight-line basis over the requisite service period.

F-31

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Summarized restricted stock award activity is:

	2009
				Weighted
				Average Grant
	Shares			Date Fair Value
Beginning of period		1,168,582		$	16.08
Granted		985,898			5.09
Vested		(499,646	)(1)		8.94
Forfeited		(339,655	)		17.39
End of period		1,315,179(2	)		10.21
December 31, 2009 total compensation cost related to nonvested time-based restricted stock awards not yet recognized	$	5 million
Weighted average period over which the nonvested time-based restricted stock is expected to be recognized		2 years

(1)	Based on the market price of our common stock on the vesting date, $2 million in fair value vested.
(2)	We estimate that 225,001 of these will be forfeited.

	2008		2007
	(in millions, except per unit amounts)
Fair value of time-based restricted stock that vested based on market price of our common stock on the vesting date	$	6	$	9
Weighted-average grant date fair value of time-based restricted stock granted		19.47		18.91

Time-Based Cash Awards.  We grant time-based cash awards (cash units with each cash unit having an equivalent fair market value of one share of our common stock on the vesting date) to officers and key employees. In general, these awards vest, subject to the participant’s continued employment, three years from the grant date. In June 2009, the Compensation Committee of our Board of Directors granted 817,030 time-based cash units to employees under our stock and incentive plans. These awards will vest in June 2012. Compensation expense is measured at fair value on each financial reporting measurement date, net of estimated forfeitures, and expensed on a straight-line basis (although subject to changes in fair value) over the requisite service period. As of December 31, 2009 and 2008, we had $1 million liability and $2 million liability, respectively, recorded for these awards.

During 2009, 2008 and 2007, 143,959, 218,524 and 392,126 time-based cash awards vested and were paid in the amount of $1 million, $4 million and $8 million, respectively. As of December 31, 2009, the total compensation cost related to nonvested time-based cash awards not yet recognized is $3 million and the weighted-average period over which it is expected to be recognized is two years.

Performance-Based and Market-Based Awards.  We grant performance-based and market-based awards to officers and key employees. The number of performance-based awards earned is determined at the end of each performance period. As of December 31, 2009 and 2008, there were no outstanding performance-based awards. As of December 31, 2009 and 2008, there were 242,098 and 354,772 outstanding market-based awards, respectively. Compensation expense is measured at fair value, net of estimated forfeitures, at each reporting measurement date preceding the grant date for accounting purposes. As of December 31, 2009 and 2008, we had insignificant amounts recorded for these awards. As of December 31, 2009, no market-based awards had vested.

F-32

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Summarized performance-based option activity of the 2004-2006 performance-based awards through the Key Employee Award Program is:

	2009
				Weighted		Weighted
				Average		Average Remaining		Aggregate
				Exercise		Contractual		Intrinsic
	Options			Price		Term (Years)		Value
								(in millions)
Beginning of period		2,854,000		$	8.34		5	$	—
Expired		(715,200	)		8.94
End of period		2,138,800			8.14		3		—
Exercisable at end of period		2,138,800			8.14		3		—
Weighted average grant date fair value		N/A

Our option awards under the 2004-2006 Key Employee Award Program was based on the following weighted average assumptions and resulting fair values for 2008 and 2007:

Expected term in years(1)	3
Estimated volatility(2)	31.21	%
Risk-free interest rate	4.9	%
Dividend yield	0	%
Weighted-average fair value	7.52

(1)	The expected term is based on a projection of exercise behavior considering the contractual terms and the participants of the option awards.
(2)	We estimated volatility based on historical and implied volatility of our common stock.

Other than the performance-based and market-based awards that vested in 2007, there were no other material performance-based or market-based awards that vested in 2009, 2008 and 2007.

Employee Stock Purchase Plan.  Under the RRI Energy, Inc. Employee Stock Purchase Plan (ESPP), which was terminated effective December 31, 2009, substantially all employees could purchase our common stock through payroll deductions of up to 15% of eligible compensation during semiannual offering periods commencing on January 1 and July 1 of each year. The share price paid by participants equaled 85% of the lesser of the average market price on the first or last business day of each offering period.

The estimated fair value of the discounted share price element in our ESPP was based on the following weighted average assumptions:

	2009			2008			2007
Expected term in years		0.5			0.5			0.5
Estimated volatility(1)		131.35	%		37.44	%		21.32	%
Risk-free interest rate		0.30	%		2.94	%		5.07	%
Dividend yield		0	%		0	%		0	%
Weighted-average fair value	$	2.90		$	6.42		$	3.87

(1) We estimated volatility based on the historical volatility of our common stock.

During 2009, 2008 and 2007, we issued 1,159,549 shares, 477,465 shares and 786,458 shares, respectively, under the ESPP and received $5 million, $9 million and $9 million, respectively, from the sale of shares to employees. In January 2010, we issued 431,733 shares under the ESPP relating to the last offering period and received $2 million from the sale of shares to employees.

F-33

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Other.  We did not use cash to settle equity instruments granted under stock-based compensation plans during 2009, 2008 or 2007. Some of our stock based equity awards provide for the settlement of the award in cash by us pursuant to change of control provisions and we do not believe it is probable these awards will become redeemable. During 2009, 2008 and 2007, there were no significant modifications to our outstanding stock-based awards.

(11)   Pension and Postretirement Benefits

Benefit Plans.  We sponsor multiple defined benefit pension plans. We provide subsidized postretirement benefits to some bargaining employees but generally do not provide them to non-bargaining employees.

Our benefit obligations and funded status are:

	Pension						Postretirement Benefits
	2009			2008			2009			2008
	(in millions)
Change in Benefit Obligations
Beginning of year	$	103		$	98		$	81		$	78
Service cost		5			6			1			1
Interest cost		6			5			4			4
Benefits paid		(5	)		(4	)		(2	)		(1	)
Settlements(1)		—			(2	)		—			—
Plans amendments/adjustments		1			1			(3	)		2
Actuarial (gain) loss		4			(1	)		(7	)		(3	)
Special termination benefits		2			—			1			—
End of year	$	116		$	103		$	75		$	81
Change in Plans’ Assets
Beginning of year	$	54		$	75		$	—		$	—
Employer contributions		20			6			2			1
Benefits paid		(5	)		(4	)		(2	)		(1	)
Effect of settlements(1)		—			(2	)		—			—
Actual investment return		12			(21	)		—			—
End of year	$	81		$	54		$	—		$	—
Funded status	$	(35	)	$	(49	)	$	(75	)	$	(81	)

(1) Settlement during 2008 relates to termination of the Channelview plan. See note 21.

Amounts recognized in our consolidated balance sheets are:

	Pension						Postretirement Benefits
	December 31,						December 31,
	2009			2008			2009			2008
	(in millions)
Current liabilities	$	—		$	—		$	(4	)	$	(3	)
Noncurrent liabilities		(35	)		(49	)		(71	)		(78	)
Net amount recognized	$	(35	)	$	(49	)	$	(75	)	$	(81	)

F-34

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The accumulated benefit obligation for all pension plans was $110 million and $94 million as of December 31, 2009 and 2008, respectively. All pension plans have accumulated benefit obligations in excess of plan assets.

Net periodic benefit costs are:

	Pension									Postretirement Benefits
	2009			2008			2007			2009			2008		2007
	(in millions)
Service cost	$	5		$	6		$	6		$	1		$	1	$	2
Interest cost		6			5			5			4			4		4
Expected return on plan assets		(4	)		(5	)		(4	)		—			—		—
Adjustment to annual expense		—			—			—			—			2		—
Net amortization		4			1			1			1			1		—
Net curtailments (gain) loss		5			—			—			(3	)		—		—
Special termination benefits		2			—			—			1			—		—
Net periodic benefit costs	$	18		$	7		$	8		$	4		$	8	$	6

As of December 31, 2009, $2 million and $1 million of net actuarial loss and net prior service costs, respectively, in accumulated other comprehensive loss are expected to be recognized in net periodic benefit cost during the next 12 months.

Assumptions.  The significant weighted average assumptions used to determine the benefit obligations are:

	Pension						Postretirement Benefits
	December 31,						December 31,
	2009			2008			2009			2008
Discount rate		5.50	%		5.75	%		5.50	%		5.75	%
Rate of compensation increase		3.0	%		3.0	%		N/A			N/A

The significant weighted average assumptions used to determine the net periodic benefit costs are:

	Pension									Postretirement Benefits
	2009			2008			2007			2009			2008			2007
Discount rate		5.75	%		5.75	%		5.75	%		5.75	%		5.75	%		5.75	%
Rate of compensation increase		3.0	%		3.0	%		3.0	%		N/A			N/A			N/A
Expected long-term rate of return on plans assets		7.5	%		7.5	%		7.5	%		N/A			N/A			N/A

The expected long-term rate of return on assets is determined based on third party capital market asset models. Generally, a time horizon of greater than five years is assumed and, therefore, interim volatility in returns is regarded with the appropriate perspective. Models assume that future returns are based on long-term, historical performance as adjusted for any differences in expected inflation, current dividend yields, expected corporate earnings growth and risk premiums based on the expected volatility of each asset category. The adjusted historical returns are weighted by the long-term pension plan asset allocation targets. Our investment manager and actuarial consultant assist with the analysis.

F-35

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Our assumed health care cost trend rates used to measure the expected cost of benefits covered by our postretirement plans are:

	2009			2008			2007
Health care cost trend rate assumed for next year(1)		8.0	%		7.9	%		8.3	%
Rate to which the cost trend rate is assumed to gradually decline (ultimate trend rate)(1)		5.5	%		5.5	%		5.5	%
Year that the rate reaches the ultimate trend rate		2015			2015			2015

(1) Represents blended rate for medical and prescription drug costs.

Assumed health care cost trend rates can have a significant effect on the amounts reported for our health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects as of December 31, 2009:

	One-Percentage Point
	Increase		Decrease
	(in millions)
Effect on service and interest cost	$	1	$	(1	)
Effect on accumulated postretirement benefit obligation		8		(7	)

Plans’ Assets.  Our Benefits Committee establishes the overall investment policy for the plans’ assets and appoints an investment manager to implement it. Plans’ assets are managed solely in the interest of the plans’ participants and their beneficiaries and are invested with the objective of earning the necessary returns to meet the time horizons of the accumulated and projected retirement benefit obligations. Asset diversification across asset types, fund strategies, and fund managers is intended to manage risk to a reasonable and prudent level. The investment manager may use derivative securities for diversification, risk-control and return enhancement purposes but may not use them for the purpose of leverage.

Our pension weighted average asset allocations and target allocation by asset category are:

	Percentage of Plan
	Assets as of December 31,						Target Allocation(1)
	2009			2008			2010
Domestic equity securities		34	%		38	%		35	%
International equity securities		26			20			25
Global equity securities		10			9			10
Debt securities		30			33			30
Total		100	%		100	%		100	%

(1) Our Benefits Committee has determined an allowable range for each category; these percentages represent the mid-point for each respective range.

F-36

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In managing the investments associated with the pension plans, the objective is to exceed, on a net-of-fee basis, the rate of return of a performance benchmark composed of the following indices:

Asset Class	Index	Weight
Domestic equity securities	Dow Jones U.S. Total Stock Market Index		40	%
International equity securities	MSCI All Country World Ex-U.S. Index		20
Global equity securities	MSCI All Country World Index		10
Debt securities	Barclays Capital Aggregate Bond Index		30
			100	%

Our Benefits Committee reviews plan asset performance each quarter by comparing the actual quarterly returns of each asset class to its related benchmark.

Fair Value Measurements.  The fair value hierarchy establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value into three categories: quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2) and significant unobservable inputs (Level 3). See note 2(d) for further discussion about the three levels.

The plans’ assets are invested in open-end mutual funds. The shares of the mutual funds held by the plans are valued at quoted market prices in an active market (which are based on the redeemable net asset value of the fund) and are classified as Level 1. The asset allocations below are based on the nature of the underlying mutual fund assets.

As of December 31, 2009, the allocated pension plans’ investments measured at fair value are as follows:

	Level 1		Level 2		Level 3
	(in millions)
Domestic equity securities(1)	$	28	$	—	$	—
International equity securities(2)		21		—		—
Global equity securities(3)		8		—		—
Debt securities(4)		24		—		—
Total	$	81	$	—	$	—

(1)	Comprised of large cap stocks.
(2)	Comprised of large cap foreign stocks.
(3)	Comprised of both foreign and domestic multi-cap stocks.
(4)	Comprised of intermediate-term, investment grade bonds.

Cash Obligations.  We expect pension cash contributions to approximate $9 million during 2010. Expected benefit payments for the next ten years, which reflect future service as appropriate, are:

			Postretirement
	Pension		Benefits
	(in millions)
2010	$	5	$	4
2011		5		4
2012		6		5
2013		6		5
2014		6		6
2015-2019		44		32

F-37

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(12)   Savings Plan

We have employee savings plans under Sections 401(a) and 401(k) of the Internal Revenue Code. Our savings plans benefit expense, including the matching contributions of generally up to 6% and discretionary contributions, was $16 million, $18 million and $17 million during 2009, 2008 and 2007, respectively.

We sponsor non-qualified deferred compensation plans for key and highly compensated employees. Our obligations under these plans were $33 million and related rabbi trust investments were $21 million as of December 31, 2009 and 2008.

(13)   Collective Bargaining Agreements

As of December 31, 2009, approximately 45% of our employees are subject to collective bargaining agreements. Approximately 25% of our employees are subject to collective bargaining agreements that will expire in 2010. We intend to negotiate the renewal of these agreements.

(14)   Income Taxes

(a)   Summary.

Our income tax expense (benefit) is:

	2009			2008			2007
	(in millions)
Current:
Federal	$	(7	)	$	7		$	—
State		2			29			(7	)
Total current		(5	)		36			(7	)
Deferred:
Federal		(103	)		57			(127	)
State		(17	)		43			(26	)
Total deferred		(120	)		100			(153	)
Income tax expense (benefit) from continuing operations	$	(125	)	$	136		$	(160	)
Income tax expense (benefit) from discontinued operations	$	410		$	(263	)	$	295

A reconciliation of the federal statutory income tax rate to the effective income tax rate for our continuing operations is:

	2009			2008			2007
Federal statutory rate		(35	)%		35	%		(35	)%
Additions (reductions) resulting from:
Federal tax uncertainties		—			2			(2	)
Federal valuation allowance(1)		16			67			(7	)
State income taxes, net of federal income taxes		(1	)(2)		180	(3)		(4	)
Goodwill impairment		—			201			—
Other, net		(1	)		35	(4)		4
Effective rate		(21	)%		520	%		(44	)%

(1)	Our changes to the federal valuation allowance are recorded at RRI Energy, Inc.
(2)	Of this percentage, $32 million (5%) relates to an increase in our state valuation allowances.

F-38

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(3)	Of this percentage, $36 million (142%) relates to an increase in our state valuation allowances.
(4)	Of this percentage, $6 million (23%) relates to write-off of book goodwill due to the sale of our Bighorn plant in October 2008.

	December 31,
	2009			2008
	(in millions)
Deferred tax assets:
Current:
Derivative liabilities, net	$	10		$	18
Employee benefits		4			3
Federal valuation allowance		(3	)		(1	)
State valuation allowances		(2	)		(5	)
Other		5			9
Total current deferred tax assets	$	14		$	24
Long-term:
Employee benefits	$	66		$	71
Net operating loss carryforwards		638			573
Alternative minimum tax credit		2			9
Environmental reserves		13			11
Derivative liabilities, net		15			27
Other		53			42
Federal valuation allowance		(126	)		(38	)
State valuation allowances		(133	)		(98	)
Other valuation allowances		—			(14	)
Total long-term deferred tax assets		528			583
Total deferred tax assets	$	542		$	607
Deferred tax liabilities:
Long-term:
Depreciation and amortization	$	486		$	562
Other		7			7
Total long-term deferred tax liabilities		493			569
Total deferred tax liabilities	$	493		$	569
Accumulated deferred income taxes, net	$	49		$	38

F-39

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(b)   Tax Attributes Carryovers.

				Statutory
	December 31,			Carryforward	Expiration
	2009			Period	Year(s)
	(in millions)			(in years)
Net operating loss carryforwards:
Federal	$	1,251		20	2024 through 2029
State		3,922		7 to 20	2010 through 2029
State tax credit carryforwards		6	(1)(2)	1 to 20	2010 through 2027
Alternative minimum tax credit carryforwards		2	(2)	Unlimited	None

(1)	Relates primarily to Texas margins tax credit carryforward.
(2)	Amount reflects the tax effect.

(c)   Valuation Allowances.

We assess our future ability to use federal, state and foreign net operating loss carryforwards, capital loss carryforwards and other deferred tax assets using the more-likely-than-not criteria. These assessments include an evaluation of our recent history of earnings and losses, future reversals of temporary differences and identification of other sources of future taxable income, including the identification of tax planning strategies in certain situations.

Our valuation allowances for deferred tax assets are:

							Capital, Foreign
	Federal			State			and Other
				(in millions)
As of January 1, 2007	$	25		$	85		$	18
Changes in valuation allowances		(2	)(1)(2)		(18	)(2)		4
Changes in valuation allowance included in accumulated other comprehensive loss		4			—			—
Channelview deconsolidation		(13	)		—			—
As of December 31, 2007		14			67			22
Changes in valuation allowances		18	(3)		36	(4)		(8	)
Changes in valuation allowance included in accumulated other comprehensive loss		7			—			—
As of December 31, 2008		39			103			14
Changes in valuation allowances		97	(5)		32	(5)		(14	)
Changes in valuation allowance included in accumulated other comprehensive loss		(7	)		—			—
As of December 31, 2009	$	129		$	135		$	—

(1)	During 2007, we submitted a revision to taxable income to the Internal Revenue Service filed in our 2003 federal income tax return, which resulted in an increase in our net deferred tax assets related to our net operating losses, which was offset by an increase in our valuation allowance of $19 million.
(2)	Net decrease primarily due to 2007 taxable income.
(3)	Net increase primarily due to 2008 goodwill impairment.
(4)	Net increase primarily due to 2008 taxable loss.
(5)	Net increase primarily due to 2009 taxable loss and long-lived assets impairments.

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(d)   Income Tax Uncertainties.

We may only recognize the tax benefit for financial reporting purposes from an uncertain tax position when it is more-likely-than-not that, based on the technical merits, the position will be sustained by taxing authorities or the courts. The recognized tax benefits are measured as the largest benefit having a greater than fifty percent likelihood of being realized upon settlement with a taxing authority. We classify accrued interest and penalties related to uncertain income tax positions in income tax expense/benefit.

In connection with the adoption of an interpretation of accounting for income tax uncertainties, we recognized the following in our consolidated financial statements:

	Adoption Effect on
	January 1, 2007
	Increase (Decrease)
	(in millions)
Goodwill	$	(2	)
Other long-term liabilities		(27	)
Accumulated deficit		(25	)

Our unrecognized federal and state tax benefits changed as follows:

	2009			2008			2007
	(in millions)
Beginning of year	$	3		$	1		$	4	(1)
Increases related to prior years		1			22			11
Decreases related to prior years		(1	)		(20	)		(11	)
Increases related to current year		—			—			—
Settlements		—			—			(3	)
Lapses in the statute of limitations		—			—			—
End of year	$	3		$	3		$	1

(1) Immediately after adoption.

We have the following in our consolidated balance sheet (included in other current and long-term liabilities):

	December 31,
	2009		2008
	(in millions)
Interest and penalties	$	1	$	1

During 2009, 2008 and 2007, we recognized $0, $1 million and $(2) million, respectively, of income tax expense (benefit) due to changes in interest and penalties for federal and state income taxes.

We have the following years that remain subject to examination or are currently under audit for our major tax jurisdictions:

	Subject to Examination		Currently Under Audit
Federal		2002 to 2009		2002 to 2008
Texas		2000 to 2009		2000 to 2006
Pennsylvania		2005 to 2009		2005 to 2006
California		2003 to 2009		2003 to 2006

We expect to continue discussions with taxing authorities regarding tax positions related to the following, and believe it is reasonably possible some of these matters could be resolved during 2010; however, we cannot estimate the range of changes that might occur: (a) $351 million charge during 2005 to settle certain civil

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

litigation and claims relating to the Western states energy crisis; and (b) the timing of tax deductions as a result of negotiations with respect to California-related revenue, depreciation and emission allowances.

We are in ongoing discussions with the Internal Revenue Service (IRS) regarding the timing of revenue recognition and tax deductions with respect to certain California-related items in our 2002 short taxable period return (subsequent to our separation from CenterPoint Energy, Inc.). The IRS has informed us it expects to issue a notice of denial of our administrative claim for refund involving these California-related items and we expect to institute refund litigation with respect to this claim in the U.S. District Court or U.S. Court of Federal Claims. In order to set a jurisdictional prerequisite to institute such a refund suit, we expect to make a payment of approximately $60 million to $65 million (which includes an asserted tax liability of $38 million plus interest) some time during the first half of 2010 and record a related receivable. If the IRS were to ultimately prevail in this matter, there would be an increase to our income tax expense. The payment will be refunded with interest if we are successful in the litigation.

Agreement with CenterPoint.  We ceased being a member of the CenterPoint consolidated tax group as of September 30, 2002 and could be limited in our ability to use tax attributes generated during periods through that date. CenterPoint’s audits of their federal income tax returns for the 1997 to 2002 tax reporting periods have been settled; however, claims have been formally submitted to the IRS for review. We have a tax allocation agreement that addresses the allocation of taxes pertaining to our separation from CenterPoint. This agreement provides that we may carry back net operating losses generated subsequent to September 30, 2002 to tax years when we were part of CenterPoint’s consolidated tax group. Any such carryback is subject to CenterPoint’s consent and any existing statutory carryback limitations. For items relating to periods prior to September 30, 2002, we will (a) recognize any net costs incurred by CenterPoint for settlement of temporary differences up to $15 million (of which $0 had been recognized through December 31, 2009 and 2008) as an equity contribution and (b) recognize any net benefits realized by CenterPoint for settlement of temporary differences up to $1 million as an equity distribution. Generally, amounts for temporary differences in excess of the $15 million and $1 million thresholds will be settled in cash between us and CenterPoint. Pursuant to this agreement, generally, taxes related to permanent differences are the responsibility of CenterPoint. As of December 31, 2009, we cannot predict the amount of any contingent liabilities or assets that we may incur or realize under this agreement.

(15)   Commitments

(a)   Lease Commitments.

REMA Leases.  One of our subsidiaries, REMA, entered into sale-leaseback transactions, under operating leases that are non-recourse to us. We lease 16.45% and 16.67% interests in the Conemaugh and Keystone facilities, respectively. The leases expire in 2034 and we expect to make payments through 2029. We also lease a 100% interest in the Shawville facility. This lease expires in 2026 and we expect to make payments through that date. At the expiration of these leases, there are several renewal options related to fair market value. REMA LLC’s subsidiaries guarantee the lease obligations and we have pledged the equity interests in these subsidiaries as collateral. We provide credit support for REMA’s lease obligations in the form of letters of credit under the June 2007 credit facilities. See note 7. During 2009, 2008 and 2007, we made lease payments under these leases of $63 million, $62 million and $65 million, respectively. As of December 31, 2009 and 2008, we have recorded a prepaid lease of $59 million in other current assets and $277 million and $273 million, respectively, in long-term assets. REMA operates the Conemaugh and Keystone facilities under agreements that could terminate annually with one year’s notice and received fees of $9 million, $9 million and $10 million during 2009, 2008 and 2007, respectively. These fees, which are recorded in operation and maintenance expense, are primarily to cover REMA’s administrative support costs of providing these services.

REMA’s lease documents restrict its ability to, among other actions, (a) encumber assets, (b) enter into business combinations or divest assets, (c) incur additional debt, (d) pay dividends or subordinated obligations,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(e) enter into some transactions with affiliates or (f) materially change its business. As of December 31, 2009, REMA was limited by the covenant restricting dividends and the payment of subordinated obligations.

Tolling Agreements.  As of December 31, 2009, we have a tolling arrangement on the Vandolah facility that extends through 2012. This arrangement, which qualifies as an operating lease, entitles us to purchase and dispatch electric generating capacity. We paid $36 million, $36 million and $39 million in tolling payments during 2009, 2008 and 2007, respectively, related to this tolling arrangement and one that expired in 2007.

Office Space Lease.  In 2003, we entered into a long-term operating lease for our corporate headquarters. The lease expires in 2018 and is subject to two five-year renewal options.

Cash Obligations Under Operating Leases.  Our projected cash obligations under non-cancelable long-term operating leases as of December 31, 2009 are:

	REMA Leases		Other(1)(2)		Total
	(in millions)
2010	$	52	$	64	$	116
2011		63		63		126
2012		56		35		91
2013		64		25		89
2014		64		25		89
2015 and thereafter		635		97		732
Total	$	934	$	309	$	1,243

(1)	Primarily includes tolling arrangement and rental agreements for office space.
(2)	Excludes projected sublease income on office space of $47 million.

Operating Lease Expense.  Total lease expense for all operating leases was $109 million, $113 million and $116 million during 2009, 2008 and 2007, respectively. These amounts are net of sublease income of $10 million, $4 million and $4 million during 2009, 2008 and 2007, respectively.

(b)   Guarantees and Indemnifications.

We have guaranteed some non-qualified benefits of CenterPoint’s existing retirees at September 20, 2002. The estimated maximum potential amount of future payments under the guarantee is approximately $53 million as of December 31, 2009 and no liability is recorded in our consolidated balance sheet for this item.

We also guarantee the PEDFA fixed-rate bonds, which are included in our consolidated balance sheet as outstanding debt or liabilities of discontinued operations ($371 million and $500 million are in our consolidated balance sheets as of December 31, 2009 and 2008, respectively). Our guarantees are secured by the same collateral as our senior secured 6.75% notes. The guarantees require us to comply with covenants similar to those in the senior secured 6.75% notes indenture. The PEDFA bonds will become secured by certain assets of our Seward power plant if the collateral supporting both the senior secured 6.75% notes and our guarantees are released. Our maximum potential obligation under the guarantees is for payment of the principal and related interest charges at a fixed rate of 6.75%. During 2009, we purchased $129 million ($92 million of which is classified as discontinued operations) of the PEDFA bonds and are the holder of these repurchased bonds. Therefore, the net amount payable by us would not exceed the amount of PEDFA bonds outstanding, excluding the PEDFA bonds we hold. See note 7.

We have guaranteed payments to a third party relating to energy sales from El Dorado Energy, LLC, a former investment. The estimated maximum potential amount of future payments under this guarantee is approximately $21 million as of December 31, 2009 and no liability is recorded in our consolidated balance sheet for this item.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In connection with the sale of our Northeast C&I contracts in December 2008, we guaranteed some former customers’ performance to the buyer. We estimate the most probable maximum potential amount of future payments under the guarantee is $11 million and $13 million as of December 31, 2009 and 2008, respectively. As of December 31, 2009 and 2008, we recorded an insignificant amount and $2 million liability, respectively, associated with the guarantee. See note 23.

We enter into contracts that include indemnification and guarantee provisions. In general, we enter into contracts with indemnities for matters such as breaches of representations and warranties and covenants contained in the contract and/or against certain specified liabilities. Examples of these contracts include asset purchase and sales agreements, service agreements and procurement agreements.

In our debt agreements, we typically indemnify against liabilities that arise from the preparation, entry into, administration or enforcement of the agreement.

Except as otherwise noted, we are unable to estimate our maximum potential exposure under these agreements until an event triggering payment occurs. We do not expect to make any material payments under these agreements.

RRI Energy has issued guarantees in conjunction with certain performance agreements and commodity and derivative contracts and other contracts that provide financial assurance to third parties on behalf of a subsidiary or an unconsolidated third party. The guarantees on behalf of subsidiaries are entered into primarily to support or enhance the creditworthiness otherwise attributed to a subsidiary on a stand-alone basis, thereby facilitating the extension of sufficient credit to accomplish the relevant subsidiary’s intended commercial purposes.

The following table details RRI Energy’s various guarantees:

	December 31, 2009
							Carrying Amount
	Stated						of Liability
	Maximum						Recorded on
	Potential						Balance Sheet of
	Amount of				Assets Held		RRI Energy (the
Type of Guarantee	Future Payments		Amount Utilized(1)		as Collateral		Parent)
	(in millions)
Commodity obligations(2)	$	1,634	$	64	$	—	$	—
Standby letters of credit(3)		88		77		—		—
Payment and performance obligations under leases(4)		3		—		—		—
Non-qualified benefits of CenterPoint’s retirees(5)		53		53		—		—
Total guarantees	$	1,778	$	194	$	—	$	—

(1)	This represents the estimated portion of the maximum potential amount of future payments that is utilized as of December 31, 2009. For those guarantees related to obligations that are recorded as liabilities by our subsidiaries, this includes the recorded amount.
(2)	RRI Energy has guaranteed the performance of certain of its wholly-owned subsidiaries’ commodity obligations. These guarantees were provided to counterparties in order to facilitate physical and financial agreements in gas, oil, transportation and related commodities and services. Some of these guarantees have varying expiration dates and some can be terminated by RRI Energy upon notice.
(3)	RRI Energy has outstanding standby letters of credit, which guarantee the performance of certain of its wholly-owned subsidiaries. As of December 31, 2009, these letters of credit expire on various dates through 2011.

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(4)	RRI Energy has guaranteed the payment obligations of certain wholly-owned subsidiaries arising under leases for certain facilities. As of December 31, 2009, these guarantees expire over varying years through 2013.
(5)	See above.

Unless otherwise noted, failure by the primary obligor to perform under the terms of the various agreements and contracts guaranteed may result in the beneficiary requesting immediate payment from RRI Energy. To the extent liabilities exist under the various agreements and contracts that RRI Energy guarantees, such liabilities are recorded in RRI Energy’s subsidiaries’ balance sheets as of December 31, 2009. We do not expect RRI Energy to make any material payments under these provisions.

(c)   Other Commitments.

Property, Plant and Equipment Commitments.  As of December 31, 2009, we have contractual commitments to spend approximately $53 million on plant and equipment relating primarily to maintenance requirements and SO₂ emission reductions.

Fuel Supply and Commodity Transportation Commitments.  We are a party to fuel supply contracts and commodity transportation contracts of various quantities and durations that are not classified as derivative assets and liabilities. These contracts are not included in our consolidated balance sheet as of December 31, 2009. Minimum purchase commitment obligations under these agreements are as follows as of December 31, 2009:

	Fuel					Transportation
	Commitments(1)					Commitments(1)
	Fixed		Variable			Fixed
	Pricing		Pricing			Pricing
	(in millions)
2010	$	174	$	—		$	55
2011		62		—	(2)		61
2012		12		—	(2)		69
2013		—		—	(2)		69
2014		—		—			70
2015 and thereafter		—		—			400
Total	$	248	$	—		$	724

(1)	As of December 31, 2009, the maximum remaining terms under any individual fuel supply contract is three years and any transportation contract is 14 years.
(2)	In addition, for 2011 through 2013, we have committed to purchase volumes of 176 million MMBTU under some coal contracts for which the contract prices are subject to negotiation and agreement prior to the beginning of each year and thus the amounts are not included in this table.

Long-term Power Generation Maintenance Agreements.  We have entered into long-term maintenance agreements that cover some periodic maintenance, including parts, on power generation turbines. The long-term maintenance agreements terminate from 2011 to 2038 based on turbine usage. During 2009, 2008 and

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2007, we incurred expenses of $1 million, $1 million and $9 million, respectively. Estimated cash payments for these agreements are as follows (in millions):

2010	$	31
2011		16
2012		6
2013		6
2014		29
2015 and thereafter		417
Total	$	505

Sales Commitments.  As of December 31, 2009, we have sales commitments, including electric energy and capacity sales contracts, which are not classified as derivative assets and liabilities. The estimated minimum sales commitments over the next five years under these contracts are as follows:

	Fixed Pricing
	(in millions)
2010	$	555
2011		474
2012		440
2013		198
2014		100
Total	$	1,767

Other Commitments.  As of December 31, 2009, we have other fixed commitments related to various agreements that aggregate as follows (in millions):

2010	$	64
2011		5
2012		3
2013		3
2014		5
2015 and thereafter		6
Total	$	86

(16)   Contingencies

We are party to many legal and governmental proceedings, some of which may involve substantial amounts. Unless otherwise noted, we cannot predict the outcome of the matters described below.

(a)   Pending Natural Gas Litigation.

We are party to eight lawsuits, several of which are class action lawsuits, in state and federal courts in Kansas, Missouri, Nevada, Tennessee and Wisconsin. These lawsuits relate to alleged conduct to increase natural gas prices in violation of antitrust and similar laws. The lawsuits seek treble or punitive damages, restitution and/or expenses. The lawsuits also name a number of unaffiliated energy companies as parties. In January 2009, the Circuit Court of Jackson County, Missouri dismissed the case filed by the Missouri Public Service Commission for lack of standing to bring the action and the Missouri Court of Appeals has affirmed the dismissal. An appeal to the Missouri Supreme Court was filed in December 2009.

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(b)   Environmental Matters.

New Source Review Matters.  The United States Environmental Protection Agency (EPA) and various states are investigating compliance of coal-fueled electric generating plants with the pre-construction permitting requirements of the Clean Air Act known as “New Source Review.” In 2000 and 2001, we responded to the EPA’s information requests related to five of our plants, and in December 2007, we received supplemental requests for two of those plants. In September 2008, we received an EPA request for information related to two additional plants and in October 2009, we received supplemental requests for those two plants. The EPA agreed to share information relating to its investigations with state environmental agencies. In January 2009, we received a Notice of Violation (NOV) from the EPA alleging that past work at our Shawville, Portland and Keystone generation facilities violated the agency’s regulations regarding New Source Review.

In December 2007, the New Jersey Department of Environmental Protection (NJDEP) filed suit against us in the United States District Court in Pennsylvania, alleging that New Source Review violations occurred at one of our power plants located in Pennsylvania. The suit seeks installation of “best available” control technologies for each pollutant, to enjoin us from operating the plant if it is not in compliance with the Clean Air Act and civil penalties. The suit also names three past owners of the plant as defendants. In March 2009, the Connecticut Department of Environmental Protection became an intervening party to the suit.

We believe that the projects listed by the EPA and the projects subject to the NJDEP suit were conducted in compliance with applicable regulations. However, any final finding that we violated the New Source Review requirements could result in significant capital expenditures associated with the implementation of emissions reductions on an accelerated basis and possible penalties. Most of these work projects were undertaken before our ownership of those facilities. We believe we are indemnified by or have the right to seek indemnification from the prior owners for certain losses and expenses that we may incur from activities occurring prior to our ownership.

Ash Disposal Landfill Closures.  We are responsible for environmental costs related to the future closures of seven ash disposal landfills. We recorded the estimated discounted costs ($18 million and $12 million as of December 31, 2009 and 2008, respectively) associated with these environmental liabilities as part of our asset retirement obligations. See note 2(m).

Remediation Obligations.  We are responsible for environmental costs related to site contamination investigations and remediation requirements at four power plants in New Jersey. We recorded the estimated long-term liability for the remediation costs of $8 million as of December 31, 2009 and 2008.

Conemaugh Actions.  In April 2007, PennEnvironment and the Sierra Club filed a citizens’ suit against us in the United States District Court, Western District of Pennsylvania to enforce provisions of the water discharge permit for the Conemaugh plant, of which we are the operator and have a 16.45% interest. PennEnvironment and the Sierra Club seek civil penalties, remediation and an injunction against further violations. We are confident that the Conemaugh plant has operated and will continue to operate in material compliance with its water discharge permit, its consent order agreement with the Pennsylvania Department of Environmental Protection, and related state and federal laws. In December 2009, the District Court ordered that the case be dismissed. PennEnvironment and the Sierra Club have requested that the court reconsider its ruling. If PennEnvironment and the Sierra Club are ultimately successful, we could incur additional capital expenditures associated with the implementation of discharge reductions and penalties, which we do not believe would be material.

Global Warming.  In February 2008, the Native Village of Kivalina and the City of Kivalina, Alaska filed a suit in the United States District Court for the Northern District of California against us and 23 other electric generating and oil and gas companies. The lawsuit seeks damages of up to $400 million for the cost of relocating the village allegedly because of global warming caused by the greenhouse gas emissions of the defendants. In late 2009, the District Court ordered that the case be dismissed and the plaintiffs appealed. We are also a party to Comer v. Murphy Oil, where a group of Mississippi residents and landowners allege the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

defendants’ greenhouse gas emissions contributed to the force of Hurricane Katrina. The plaintiffs have not specified the amount of damages they are seeking. In October 2009, the United States Court of Appeals for the Fifth Circuit ruled that the plaintiffs’ claims satisfied the threshold test for standing and did not present a non-justiciable political question and remanded the case to the United States District Court for the Southern District of Mississippi for further proceedings. While we believe claims such as these lack legal merit, it is possible that this trend of climate change litigation may continue.

(c)   Other.

Excess Mitigation Credits.  From January 2002 to April 2005, CenterPoint applied excess mitigation credits (EMCs) to its monthly charges to retail energy providers. The PUCT imposed these credits to facilitate the transition to competition in Texas, which had the effect of lowering the retail energy providers’ monthly charges payable to CenterPoint. CenterPoint represents that the portion of those EMCs credited to our former Texas retail business totaled $385 million. In its stranded cost case, CenterPoint sought recovery of all EMCs credited to all retail electric providers, including our former Texas retail business, and the PUCT ordered that relief. On appeal, the Texas Third Court of Appeals ruled that CenterPoint’s stranded cost recovery should exclude EMCs credited to our former Texas retail business for price-to-beat customers. The case is now before the Texas Supreme Court. In November 2008, CenterPoint asked us to agree to suspend any limitations periods that might exist for possible claims against us or our former Texas retail business if it is ultimately not allowed to include in its stranded cost calculation EMCs credited to our former Texas retail business. We agreed to suspend only unexpired deadlines, if any, that may apply to a CenterPoint claim relating to EMCs credited to our former Texas retail business. Regardless of the outcome of the Texas Supreme Court proceeding, we believe that any claim by CenterPoint that we are liable to it for any EMCs credited to our Texas retail business lacks legal merit and is unsupported by our Master Separation Agreement with CenterPoint. In addition, CenterPoint has publicly stated that it has no legal recourse against us or our former Texas retail business for any reduction in the amount of its recoverable stranded costs should EMCs credited to our former Texas retail business be excluded.

CenterPoint Indemnity.  We have agreed to indemnify CenterPoint against certain losses relating to the lawsuits described in note 16(a) under “Pending Natural Gas Litigation.”

Texas Franchise Audit.  The state of Texas has issued assessment orders indicating an estimated tax liability of approximately $58 million (including interest and penalties of $20 million) relating primarily to the sourcing of receipts for 2000 through 2006. We are contesting the audit assessments related to this issue.

Sales Tax Contingencies.  Some of our sales tax computations are subject to challenge under audit. As of December 31, 2009 and 2008, we have $4 million and $13 million, respectively, accrued in current and long-term liabilities for both continuing and discontinued operations relating to these contingencies.

Refund Contingency Related to Transportation Rates.  In September 2008, Kern River Gas Transmission Company (Kern), a natural gas pipeline, and certain of its shippers entered into a settlement agreement regarding Kern’s transportation rates to which we were a party. The agreement resulted in a refund to us of $30 million during the fourth quarter of 2008 (recorded as a current liability). In 2009, the Federal Energy Regulatory Commission (FERC) rejected the settlement agreement and directed Kern to recalculate the refunds. We do not expect any adjustments to be material. When the final FERC order is received in 2010, we will recognize this liability in income from continuing operations as a reduction of cost of sales.

(17)   Settlements and Other Charges

Western States Litigation and Similar Settlements.

Natural Gas Cases.  In December 2006, we reached a settlement of the 12 class action natural gas cases pending in state court in California. The settlement required us to pay $35 million, which we expensed during 2006 and paid during 2007. The settlement does not include similar cases filed by individual plaintiffs and cases filed in jurisdictions other than California, which we continue to vigorously defend.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In May 2008, we signed a memorandum of understanding to settle the 16 cases comprising the California-based gas index litigation, including the case brought by the Los Angeles Department of Water and Power. In November 2008, a definitive settlement agreement was signed. Following court approval of the settlement in December, the related settlement payment was paid. The charges associated with this settlement were expensed and paid during 2008 and totaled $34 million.

In September 2009, a final judgment dismissing the five California-related cases pending in federal court in Nevada was entered for $3 million. The charges incurred in connection with the settlement were expensed in the third quarter of 2008 and paid in the third quarter of 2009. This settlement resolved all of the remaining California gas cases.

Criminal Proceeding—RRI Energy Services.  In March 2007, RRI Energy Services, Inc. entered into a Deferred Prosecution Agreement in resolution of its April 2004 indictment for alleged violations of the Commodity Exchange Act, wire fraud and conspiracy charges. As part of the agreement, RRI Energy Services, Inc. paid and expensed a $22 million penalty in March 2007. The agreement expired in March 2009.

(18)   Supplemental Guarantor Information

Our wholly-owned subsidiaries are either (a) full or unconditional guarantors, jointly and severally or (b) non-guarantors of the senior secured notes. The primary guarantors are: RRI Energy California Holdings, LLC; RRI Energy Northeast Holdings, Inc.; RRI Energy Power Generation, Inc. and RRI Energy Services, Inc. The primary non-guarantors are: Orion Power and REMA.

Some of RRI Energy’s subsidiaries have effective restrictions on their ability to pay dividends or make intercompany loans and advances under their financing arrangements or other third party agreements. The amounts of restricted net assets of RRI Energy’s consolidated subsidiaries as of December 31, 2009 are approximately $2.5 billion. These restrictions are on the net assets of Orion Power, REMA and Channelview.

During 2009, 2008 and 2007, RRI Energy received cash distributions from RERH Holdings, LLC of $395 million, $215 million and $437 million, respectively. RERH Holdings, LLC was the holding company of our former retail business and was sold in May 2009.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Condensed Consolidating Statements of Operations.

	2009
	RRI Energy			Guarantors			Non-Guarantors			Adjustments(1)			Consolidated
	(in millions)
Revenues	$	—		$	1,810		$	868		$	(853	)	$	1,825
Cost of sales		—			1,397			578			(846	)		1,129
Operation and maintenance		—			178			378			(6	)		550
General and administrative		—			10			92			(1	)		101
Western states litigation and similar settlements		—			—			—			—			—
Gains on sales of assets and emission and exchange allowances, net		—			(18	)		(4	)		—			(22	)
Long-lived assets impairments		—			91			120			—			211
Depreciation and amortization		—			130			139			—			269
Total		—			1,788			1,303			(853	)		2,238
Operating income (loss)		—			22			(435	)		—			(413	)
Income of equity investment, net		—			1			—			—			1
Loss of equity investments of consolidated subsidiaries		(309	)		(88	)		—			397			—
Debt extinguishments losses		(6	)		(2	)		—			—			(8	)
Interest expense		(144	)		(28	)		(14	)		—			(186	)
Interest income		2			—			—			—			2
Interest income (expense)—affiliated companies, net		72			(10	)		(62	)		—			—
Total other expense		(385	)		(127	)		(76	)		397			(191	)
Loss from continuing operations before income taxes		(385	)		(105	)		(511	)		397			(604	)
Income tax expense (benefit)		68			(10	)		(183	)		—			(125	)
Loss from continuing operations		(453	)		(95	)		(328	)		397			(479	)
Income from discontinued operations		856			21			5			—			882
Net income (loss)	$	403		$	(74	)	$	(323	)	$	397		$	403

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	2008
	RRI Energy			Guarantors			Non-Guarantors			Adjustments(1)			Consolidated
	(in millions)
Revenues	$	—		$	3,322		$	1,514		$	(1,442	)	$	3,394
Cost of sales		—			2,743			603			(1,432	)		1,914
Operation and maintenance		—			187			414			(6	)		595
General and administrative		2			26			98			(4	)		122
Western states litigation and similar settlements		34			3			—			—			37
Gains on sales of assets and emission and exchange allowances, net		—			(91	)		(2	)		—			(93	)
Goodwill impairment		—			29			157			119			305
Depreciation and amortization		—			130			183			—			313
Total		36			3,027			1,453			(1,323	)		3,193
Operating income (loss)		(36	)		295			61			(119	)		201
Income of equity investment, net		—			1			—			—			1
Income (loss) of equity investments of consolidated subsidiaries		(636	)		85			—			551			—
Debt extinguishments losses		(2	)		—			—			—			(2	)
Other, net		—			1			4			—			5
Interest expense		(153	)		(27	)		(20	)		—			(200	)
Interest income		15			5			1			—			21
Interest income (expense)—affiliated companies, net		179			(116	)		(63	)		—			—
Total other expense		(597	)		(51	)		(78	)		551			(175	)
Income (loss) from continuing operations before income taxes		(633	)		244			(17	)		432			26
Income tax expense		25			85			26			—			136
Income (loss) from continuing operations		(658	)		159			(43	)		432			(110	)
Income (loss) from discontinued operations		(82	)		10			(558	)		—			(630	)
Net income (loss)	$	(740	)	$	169		$	(601	)	$	432		$	(740	)

F-51

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	2007
	RRI Energy			Guarantors			Non-Guarantors			Adjustments(1)			Consolidated
	(in millions)
Revenues	$	—		$	3,398		$	1,605		$	(1,800	)	$	3,203
Cost of sales		—			3,050			780			(1,789	)		2,041
Operation and maintenance		—			193			457			(7	)		643
General and administrative		—			26			113			(4	)		135
Western states litigation and similar settlements		—			22			—			—			22
Gains on sales of assets and emission and exchange allowances, net		—			(17	)		(9	)		—			(26	)
Depreciation and amortization		—			157			241			—			398
Total		—			3,431			1,582			(1,800	)		3,213
Operating income (loss)		—			(33	)		23			—			(10	)
Income of equity investment, net		—			5			—			—			5
Income of equity investments of consolidated subsidiaries		271			3			—			(274	)		—
Debt extinguishments losses		(114	)		—			—			—			(114	)
Interest expense		(184	)		(27	)		(51	)		—			(262	)
Interest income		11			7			1			—			19
Interest income (expense)—affiliated companies, net		327			(249	)		(78	)		—			—
Total other income (expense)		311			(261	)		(128	)		(274	)		(352	)
Income (loss) from continuing operations before income taxes		311			(294	)		(105	)		(274	)		(362	)
Income tax benefit		(16	)		(119	)		(25	)		—			(160	)
Income (loss) from continuing operations		327			(175	)		(80	)		(274	)		(202	)
Income from discontinued operations		38			4			525			—			567
Net income (loss)	$	365		$	(171	)	$	445		$	(274	)	$	365

(1) These amounts relate to either (a) eliminations and adjustments recorded in the normal consolidation process or (b) reclassifications recorded due to differences in classifications at the subsidiary levels compared to the consolidated level.

F-52

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Condensed Consolidating Balance Sheets.

	December 31, 2009
	RRI Energy		Guarantors		Non-Guarantors		Adjustments(1)			Consolidated
	(in millions)
ASSETS
Current Assets:
Cash and cash equivalents	$	922	$	—	$	26	$	(5	)	$	943
Restricted cash		—		17		2		5			24
Accounts and notes receivable, principally customer, net		10		129		14		—			153
Accounts and notes receivable—affiliated companies		2,210		554		208		(2,972	)		—
Inventory		—		153		179		—			332
Derivative assets		—		100		32		—			132
Other current assets		48		164		88		(14	)		286
Current assets of discontinued operations		129		95		5		(121	)		108
Total current assets		3,319		1,212		554		(3,107	)		1,978
Property, Plant and Equipment, net		—		2,227		2,375		—			4,602
Other Assets:
Other intangibles, net		—		50		256		—			306
Notes receivable—affiliated companies		1,067		551		—		(1,618	)		—
Equity investments of consolidated subsidiaries		1,991		277		18		(2,286	)		—
Derivative assets		—		48		5		—			53
Other long-term assets		41		755		371		(650	)		517
Long-term assets of discontinued operations		—		5		—		—			5
Total other assets		3,099		1,686		650		(4,554	)		881
Total Assets	$	6,418	$	5,125	$	3,579	$	(7,661	)	$	7,461
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt and short-term borrowings	$	—	$	—	$	405	$	—		$	405
Accounts payable, principally trade		—		75		68		—			143
Accounts and notes payable—affiliated companies		—		2,111		861		(2,972	)		—
Derivative liabilities		—		68		84		—			152
Other current liabilities		10		126		50		(14	)		172
Current liabilities of discontinued operations		9		162		8		(121	)		58
Total current liabilities		19		2,542		1,476		(3,107	)		930
Other Liabilities:
Notes payable—affiliated companies		—		1,062		556		(1,618	)		—
Derivative liabilities		—		—		61		—			61
Other long-term liabilities		572		138		201		(650	)		261
Long-term liabilities of discontinued operations		3		7		4		—			14
Total other liabilities		575		1,207		822		(2,268	)		336
Long-term Debt		1,579		371		—		—			1,950
Commitments and Contingencies
Temporary Equity Stock-based Compensation		7		—		—		—			7
Total Stockholders’ Equity		4,238		1,005		1,281		(2,286	)		4,238
Total Liabilities and Equity	$	6,418	$	5,125	$	3,579	$	(7,661	)	$	7,461

F-53

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	December 31, 2008
	RRI Energy		Guarantors		Non-Guarantors		Adjustments(1)			Consolidated
	(in millions)
ASSETS
Current Assets:
Cash and cash equivalents	$	970	$	—	$	34	$	—		$	1,004
Restricted cash		—		1		2		—			3
Accounts and notes receivable, principally customer, net		15		216		33		(14	)		250
Accounts and notes receivable—affiliated companies		1,100		268		183		(1,551	)		—
Inventory		—		153		162		—			315
Derivative assets		—		127		34		—			161
Investment in and receivables from Channelview, net		1		58		—		—			59
Other current assets		5		56		126		(30	)		157
Current assets of discontinued operations		272		211		2,661		(638	)		2,506
Total current assets		2,363		1,090		3,235		(2,233	)		4,455
Property, Plant and Equipment, net		—		2,369		2,451		—			4,820
Other Assets:
Other intangibles, net		—		150		264		(34	)		380
Notes receivable—affiliated companies		2,260		578		54		(2,892	)		—
Equity investments of consolidated subsidiaries		1,731		332		—		(2,063	)		—
Derivative assets		—		37		42		—			79
Other long-term assets		45		749		344		(645	)		493
Long-term assets of discontinued operations		2		12		686		(205	)		495
Total other assets		4,038		1,858		1,390		(5,839	)		1,447
Total Assets	$	6,401	$	5,317	$	7,076	$	(8,072	)	$	10,722
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt and short-term borrowings	$	—	$	—	$	13	$	—		$	13
Accounts payable, principally trade		—		31		132		(6	)		157
Accounts and notes payable—affiliated companies		—		1,307		244		(1,551	)		—
Derivative liabilities		—		29		173		—			202
Other current liabilities		10		306		47		(72	)		291
Current liabilities of discontinued operations		61		147		2,805		(637	)		2,376
Total current liabilities		71		1,820		3,414		(2,266	)		3,039
Other Liabilities:
Notes payable—affiliated companies		—		2,132		760		(2,892	)		—
Derivative liabilities		—		4		137		—			141
Other long-term liabilities		547		119		251		(645	)		272
Long-term liabilities of discontinued operations		198		103		778		(206	)		873
Total other liabilities		745		2,358		1,926		(3,743	)		1,286
Long-term Debt		1,798		408		404		—			2,610
Commitments and Contingencies
Temporary Equity Stock-based Compensation		9		—		—		—			9
Total Stockholders’ Equity		3,778		731		1,332		(2,063	)		3,778
Total Liabilities and Equity	$	6,401	$	5,317	$	7,076	$	(8,072	)	$	10,722

(1) These amounts relate to either (a) eliminations and adjustments recorded in the normal consolidation process or (b) reclassifications recorded due to differences in classifications at the subsidiary levels compared to the consolidated level.

F-54

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Condensed Consolidating Statements of Cash Flows.

	2009
	RRI Energy			Guarantors			Non-Guarantors			Adjustments(1)			Consolidated
	(in millions)
Cash Flows from Operating Activities:
Net cash provided by (used in) continuing operations from operating activities	$	(171	)	$	69		$	(296	)	$	6		$	(392	)
Net cash provided by discontinued operations from operating activities		134			100			351			—			585
Net cash provided by (used in) operating activities		(37	)		169			55			6			193
Cash Flows from Investing Activities:
Capital expenditures		—			(23	)		(161	)		(6	)		(190	)
Investments in, advances to and from and distributions from subsidiaries, net(2)		(337	)		—			—			337			—
Proceeds from sales of assets, net		—			36			—			—			36
Proceeds from sales of (purchases of) emission and exchange allowances, net		—			31			(34	)		—			(3	)
Restricted cash		—			—			—			(5	)		(5	)
Other, net		—			4			—			—			4
Net cash provided by (used in) continuing operations from investing activities		(337	)		48			(195	)		326			(158	)
Net cash provided by (used in) discontinued operations from investing activities		704			5			(418	)		21			312
Net cash provided by (used in) investing activities		367			53			(613	)		347			154
Cash Flows from Financing Activities:
Payments of long-term debt		(218	)		(37	)		—			—			(255	)
Changes in notes with affiliated companies, net(3)(4)		—			(115	)		452			(337	)		—
Payments of debt extinguishments expenses		(4	)		(1	)		—			—			(5	)
Proceeds from issuances of stock		12			—			—			—			12
Net cash provided by (used in) continuing operations from financing activities		(210	)		(153	)		452			(337	)		(248	)
Net cash used in discontinued operations from financing activities		(168	)		(69	)		(3	)		(21	)		(261	)
Net cash provided by (used in) financing activities		(378	)		(222	)		449			(358	)		(509	)
Net Change in Cash and Cash Equivalents, Total Operations		(48	)		—			(109	)		(5	)		(162	)
Less: Net Change in Cash and Cash Equivalents, Discontinued Operations		—			—			(101	)		—			(101	)
Cash and Cash Equivalents at Beginning of Period, Continuing Operations		970			—			34			—			1,004
Cash and Cash Equivalents at End of Period, Continuing Operations	$	922		$	—		$	26		$	(5	)	$	943

F-55

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	2008
	RRI Energy			Guarantors			Non-Guarantors			Adjustments(1)			Consolidated
	(in millions)
Cash Flows from Operating Activities:
Net cash provided by continuing operations from operating activities	$	58		$	169		$	477		$	—		$	704
Net cash used in discontinued operations from operating activities		(207	)		(83	)		(231	)		—			(521	)
Net cash provided by (used in) operating activities		(149	)		86			246			—			183
Cash Flows from Investing Activities:
Capital expenditures		—			(30	)		(249	)		—			(279	)
Investments in, advances to and from and distributions from subsidiaries, net(2)		815			57			(57	)		(815	)		—
Proceeds from sales of assets, net		—			526			1			—			527
Proceeds from sales of (purchases of) emission and exchange allowances, net		—			51			(70	)		—			(19	)
Restricted cash		—			1			—			—			1
Other, net		—			6			—			—			6
Net cash provided by (used in) continuing operations from investing activities		815			611			(375	)		(815	)		236
Net cash provided by (used in) discontinued operations from investing activities		(141	)		—			112			9			(20	)
Net cash provided by (used in) investing activities		674			611			(263	)		(806	)		216
Cash Flows from Financing Activities:
Payments of long-term debt		(58	)		—			—			—			(58	)
Changes in notes with affiliated companies, net(3)		—			(716	)		(99	)		815			—
Payments of debt extinguishment costs		(1	)		—			—			—			(1	)
Proceeds from issuances of stock		14			—			—			—			14
Net cash used in continuing operations from financing activities		(45	)		(716	)		(99	)		815			(45	)
Net cash provided by (used in) discontinued operations from financing activities		—			18			(9	)		(9	)		—
Net cash used in financing activities		(45	)		(698	)		(108	)		806			(45	)
Net Change in Cash and Cash Equivalents, Total Operations		480			(1	)		(125	)		—			354
Less: Net Change in Cash and Cash Equivalents, Discontinued Operations		—			—			(126	)		—			(126	)
Cash and Cash Equivalents at Beginning of Period, Continuing Operations		490			1			33			—			524
Cash and Cash Equivalents at End of Period, Continuing Operations	$	970		$	—		$	34		$	—		$	1,004

F-56

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	2007
	RRI Energy			Guarantors			Non-Guarantors			Adjustments(1)			Consolidated
	(in millions)
Cash Flows from Operating Activities:
Net cash provided by (used in) continuing operations from operating activities	$	155		$	(155	)	$	204		$	—		$	204
Net cash provided by (used in) discontinued operations from operating activities		(9	)		41			416			110			558
Net cash provided by (used in) operating activities		146			(114	)		620			110			762
Cash Flows from Investing Activities:
Capital expenditures		—			(28	)		(147	)		—			(175	)
Investments in, advances to and from and distributions from subsidiaries, net(2)		(56	)		(5	)		3			58			—
Proceeds from sales of assets, net		—			82			—			—			82
Purchases of emission and exchange allowances, net		—			(42	)		(43	)		—			(85	)
Restricted cash		—			(1	)		(5	)		—			(6	)
Other, net		—			6			—			—			6
Net cash provided by (used in) continuing operations from investing activities		(56	)		12			(192	)		58			(178	)
Net cash provided by (used in) discontinued operations from investing activities		402			—			(284	)		(119	)		(1	)
Net cash provided by (used in) investing activities		346			12			(476	)		(61	)		(179	)
Cash Flows from Financing Activities:
Proceeds from long-term debt		1,300			—			—			—			1,300
Payments of long-term debt		(1,526	)		—			(10	)		—			(1,536	)
Increase in short-term borrowings and revolving credit facilities, net		—			—			7			—			7
Changes in notes with affiliated companies, net(3)(5)		—			58			—			(58	)		—
Payments of debt extinguishment costs		(73	)		—			—			—			(73	)
Proceeds from issuances of stock		41			—			—			—			41
Payments of financing costs		(31	)		—			—			—			(31	)
Other, net		1			(1	)		—			—			—
Net cash provided by (used in) continuing operations from financing activities		(288	)		57			(3	)		(58	)		(292	)
Net cash provided by (used in) discontinued operations from financing activities		—			22			(31	)		9			—
Net cash provided by (used in) financing activities		(288	)		79			(34	)		(49	)		(292	)
Net Change in Cash and Cash Equivalents, Total Operations		204			(23	)		110			—			291
Less: Net Change in Cash and Cash Equivalents, Discontinued Operations		—			(2	)		94			—			92
Cash and Cash Equivalents at Beginning of Period, Continuing Operations		286			22			17			—			325
Cash and Cash Equivalents at End of Period, Continuing Operations	$	490		$	1		$	33		$	—		$	524

(1)	These amounts relate to either (a) eliminations and adjustments recorded in the normal consolidation process or (b) reclassifications recorded due to differences in classifications at the subsidiary levels compared to the consolidated level.
(2)	Net investments in, advances to and from and distributions from subsidiaries are classified as investing activities.
(3)	Net changes in notes with affiliated companies are classified as financing activities for subsidiaries of RRI Energy and as investing activities for RRI Energy.

F-57

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(4)	RRI Energy converted intercompany notes payable of a guarantor subsidiary of $336 million to equity during 2009
(5)	RRI Energy converted intercompany notes payable of a guarantor subsidiary of $753 million to equity during 2007.

(19)   Unaudited Quarterly Information

	2009
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
	(in millions, except per share amounts)
Revenues	$	466		$	390		$	507		$	462
Loss from continuing operations		(106	)		(103	)		(19	)		(251	)
Income (loss) from discontinued operations		(45	)		906			4			17
Net income (loss)		(151	)		803			(15	)		(234	)
Basic Earnings (Loss) Per Share:
Loss from continuing operations	$	(0.30	)	$	(0.30	)	$	(0.05	)	$	(0.71	)
Income (loss) from discontinued operations		(0.13	)		2.59			0.01			0.05
Net income (loss)	$	(0.43	)	$	2.29		$	(0.04	)	$	(0.66	)
Diluted Earnings (Loss) Per Share:
Loss from continuing operations	$	(0.30	)	$	(0.30	)	$	(0.05	)	$	(0.71	)
Income (loss) from discontinued operations		(0.13	)		2.59			0.01			0.05
Net income (loss)	$	(0.43	)	$	2.29		$	(0.04	)	$	(0.66	)

	2008
	First Quarter		Second Quarter		Third Quarter			Fourth Quarter
	(in millions, except per share amounts)
Revenues	$	880	$	1,014	$	960		$	540
Income (loss) from continuing operations		13		82		93			(298	)
Income (loss) from discontinued operations		364		277		(1,131	)		(140	)
Net income (loss)		377		359		(1,038	)		(438	)
Basic Earnings (Loss) Per Share:
Income (loss) from continuing operations	$	0.04	$	0.24	$	0.27		$	(0.85	)
Income (loss) from discontinued operations		1.05		0.79		(3.24	)		(0.40	)
Net income (loss)	$	1.09	$	1.03	$	(2.97	)	$	(1.25	)
Diluted Earnings (Loss) Per Share:
Income (loss) from continuing operations	$	0.04	$	0.23	$	0.26		$	(0.85	)
Income (loss) from discontinued operations		1.03		0.78		(3.19	)		(0.40	)
Net income (loss)	$	1.07	$	1.01	$	(2.93	)	$	(1.25	)

Variances in revenues and cost of sales from quarter to quarter were primarily due to (a) seasonal fluctuations in demand for electric energy and energy services and (b) changes in energy commodity prices,

F-58

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

including unrealized gains/losses on energy derivatives. During 2009, we incurred $22 million in unrealized gains on energy derivatives ($44 million loss in the first quarter, $7 million gain in the second quarter, $7 million gain in the third quarter and $52 million gain in the fourth quarter). During 2008, we recognized $9 million in unrealized losses on energy derivatives ($30 million gain in the first quarter, $68 million gain in the second quarter, $40 million loss in the third quarter and $67 million loss in the fourth quarter).

Changes in net income (loss) from quarter to quarter were primarily due to:

•  seasonal fluctuations in demand for electric energy and energy services

•  changes in energy commodity prices, including unrealized gains/losses on energy derivatives

•  timing of maintenance expenses

In addition, net income (loss) changed from quarter to quarter in 2009 by (amounts are pre-tax unless indicated otherwise):

•  $1.2 billion in income from discontinued operations due to gain on sale of Texas retail business in the second quarter

•  $211 million impairment charges relating to long-lived assets at our New Castle and Indian River plants

•  $101 million charge for lower of average cost or market adjustments in cost of sales ($25 million in the first quarter, $35 million in the second quarter, $22 million in the third quarter and $19 million in the fourth quarter)

•  $129 million change in income tax expense/benefit due to our federal and state valuation allowances ($22 million increase during the first quarter, $7 million decrease during the second quarter, $10 million increase during the third quarter and $104 million increase during the fourth quarter)

•  $17 million gain on sales of emission and exchange allowances ($17 million gain in the first quarter)

•  $12 million in income from discontinued operations due to the gain on sale of Illinois C&I contracts

•  $9 million charge for severance costs recorded in operation and maintenance and general and administrative expenses ($1 million in the first quarter, $4 million in the second quarter, $3 million in the third quarter and $1 million in the fourth quarter)

Also, net income (loss) changed from quarter to quarter in 2008 by (amounts are pre-tax unless indicated otherwise):

•  $305 million goodwill impairment for our then wholesale energy segment in the fourth quarter

•  $63 million in income from discontinued operations due to the gain on sale of Northeast C&I contracts

•  $48 million change in income tax expense/benefit due to our federal and state valuation allowances in the fourth quarter

•  $47 million gain on the sale of our Bighorn plant in the fourth quarter

•  $40 million charge for lower of average cost or market adjustments in cost of sales ($15 million in the third quarter and $25 million in the fourth quarter)

•  $38 million gain on sales of emission and exchange allowances ($27 million gain in the second, quarter, $10 million gain in the third quarter and $1 million gain in the fourth quarter)

•  $37 million charge for Western states litigation and similar settlements ($34 million in the first quarter and $3 million in the third quarter)

F-59

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(20)   Reportable Segments

Segments.  Following the sale of our Texas retail business and commencing in the third quarter of 2009, we have four reportable segments: East Coal, East Gas, West and Other. The East Gas, West and Other segments consist primarily of gas plants while the East Coal segment is our coal plants. We have recast our 2008 and 2007 data and presented our new segment information in this note on a consistent basis for 2009, 2008 and 2007. Each of our generation plants is an operating segment and based on similar economic and other characteristics, we have aggregated them into these four reportable segments. The key earnings drivers we use for internal performance reporting and external communication exhibit how each segment has similar economic characteristics. Key earnings drivers include economic generation (amount of time our plants are economical to operate), commercial capacity factor (generation as a percentage of economic generation), unit margin and other margin. All plants are impacted by supply and demand. Our coal plants (East Coal) are further impacted by gas/coal spreads (the added difference between the price of natural gas and the price of coal). Accordingly, we have aggregated the plants by fuel type and further by geographic region.

In each of our segments, we sell electricity, capacity, ancillary and other energy services from our plants in hour-ahead, day-ahead and forward markets in bilateral and independent system operator markets. All products and services are related to the generation and availability of power, consisting of (a) power generation and capacity revenues and (b) natural gas sales revenues.

Open Gross Margin.  Our segment profitability measure is open gross margin. Open gross margin consists of (a) open energy gross margin and (b) other margin. Open gross margin excludes hedges and other items and unrealized gains/losses on energy derivatives. Open energy gross margin is calculated using the day-ahead and real-time market power sales prices received by the plants less market-based delivered fuel costs. Open energy gross margin is (a)(i) economic generation multiplied by (ii) commercial capacity factor (which equals generation) multiplied by (b) open energy unit margin. Economic generation is estimated generation at 100% plant availability based on an hourly analysis of when it is economical to generate based on the price of power, fuel, emission allowances and variable operating costs. Economic generation can vary depending on the comparison of market prices to our cost of generation. It will decrease if there are fewer hours when market prices exceed the cost of generation. It will increase if there are more hours when market prices exceed the cost of generation. Other margin represents power purchase agreements, capacity payments, ancillary services revenues and selective commercial strategies relating to optimizing our assets.

Items Excluded from Open Gross Margin.  We have two primary items that are excluded from our segment measure of open gross margin: (a) hedges and other items and (b) unrealized gains/losses on energy derivatives. Each of these items is included in our consolidated revenues or cost of sales and is described more fully below. We believe that excluding these items from our segment profitability measure provides a more meaningful representation of our economic performance in the reporting period and is therefore useful to us and others in facilitating the analysis of our results of operations from one period to another. Hedges and other items and unrealized gains/losses on energy derivatives are also not a function of the operating performance of our generation assets, and excluding their impacts helps isolate the operating performance of our generation assets under prevailing market conditions.

Hedges and Other Items.  We may enter selective hedges, including originated transactions, to (a) seek potential value greater than what is available in the spot or day-ahead markets, (b) address operational requirements or (c) seek a specific financial objective. Hedges and other items primarily relate to settlements of power and fuel hedges, long-term natural gas transportation contracts, storage contracts and long-term tolling contracts. They are primarily derived based on methodology consistent with the calculation of open energy gross margin in that a portion of this item represents the difference between the margins calculated using the day-ahead and real-time market power sales prices received by the plants less market-based delivered fuel costs and the actual amounts paid or received during the period. See notes 2(e) and 6.

F-60

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Unrealized Gains/Losses on Energy Derivatives.  We use derivative instruments to manage operational or market constraints and to increase the return on our generation assets. We record in our consolidated statement of operations non-cash gains/losses based on current changes in forward commodity prices for derivative instruments receiving mark-to-market accounting treatment which will settle in future periods. We refer to these gains and losses prior to settlement, as well as ineffectiveness on cash flow hedges, as “unrealized gains/losses on energy derivatives.” In some cases, the underlying transactions being economically hedged receive accrual accounting treatment, resulting in a mismatch of accounting treatments. Since the application of mark-to-market accounting has the effect of pulling forward into current periods non-cash gains/losses relating to and reversing in future delivery periods, analysis of results of operations from one period to another can be difficult. See notes 2(e) and 6.

F-61

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Financial data for our segments and consolidated are as follows:

															Adjustments
	East			East									Discontinued		and
	Coal			Gas			West			Other			Operations		Eliminations			Consolidated
2009
Revenues from external customers(1)	$	927		$	509		$	307		$	96				$	(14	)(2)	$	1,825	(3)
Open energy gross margin	$	239		$	20		$	14		$	—							$	273
Other margin		186			188			119			60								553
Open gross margin(4)	$	425		$	208		$	133		$	60							$	826	(5)
Gains on sales of assets and emission and exchange allowances, net	$	—		$	—		$	3		$	—				$	19	(6)	$	22
Long-lived assets impairments	$	120	(7)	$	—		$	—		$	91	(8)			$	—		$	211
Total assets as of December 31, 2009	$	3,446	(9)	$	1,316	(9)	$	175	(9)	$	623	(9)	$	113	$	1,788	(10)	$	7,461
Expenditures for long-lived assets(11)	$	213		$	1		$	7		$	4				$	(13	)(12)	$	212
2008
Revenues from external customers(1)	$	1,657		$	676		$	706		$	420	(13)			$	(65	)(2)	$	3,394	(14)
Open energy gross margin	$	719		$	42		$	(1	)	$	1							$	761
Other margin		139			145			167			44								495
Open gross margin(4)	$	858		$	187		$	166		$	45							$	1,256	(15)
Gains on sales of assets and emission and exchange allowances, net	$	—		$	—		$	47	(16)	$	1	(17)			$	45	(18)	$	93
Total assets as of December 31, 2008	$	3,497	(9)	$	1,366	(9)	$	186	(9)	$	752	(9)	$	3,001	$	1,920	(10)	$	10,722
Expenditures for long-lived assets(11)	$	297		$	4		$	6		$	5				$	28	(12)	$	340
2007
Revenues from external customers(1)	$	1,394		$	528		$	927		$	489	(19)			$	(135	)(2)	$	3,203	(20)
Open energy gross margin	$	778		$	50		$	20		$	24							$	872
Other margin		70			109			141			67								387
Open gross margin(4)	$	848		$	159		$	161		$	91							$	1,259	(21)
Gains on sales of assets and emission and exchange allowances, net	$	—		$	—		$	—		$	—				$	26	(22)	$	26
Total assets as of December 31, 2007	$	3,320	(9)	$	1,419	(9)	$	626	(9)	$	867	(9)	$	2,514	$	2,627	(10)	$	11,373
Expenditures for long-lived assets(11)	$	248		$	8		$	2		$	6				$	3	(12)	$	267

F-62

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(1)	All revenues are in the United States.
(2)	Primarily relates to unrealized gains/losses on energy derivatives, hedges and other items and other revenues not specifically identified to a particular plant or reportable segment.
(3)	Includes $920 million in revenues from a single counterparty, which represented 50% of our consolidated revenues. This counterparty is included in our East Coal and East Gas segments. As of December 31, 2009, $52 million was outstanding from this counterparty and collected in 2010.
(4)	Represents our segment profitability measure.
(5)	Excludes $(152) million and $22 million of hedges and other items and unrealized gains on energy derivatives, respectively, that are included in our consolidated revenues or cost of sales.
(6)	Primarily relates to gains on sales of CO2 exchange allowances and SO2 emission allowances.
(7)	Relates to the New Castle plant. See note 4.
(8)	Relates to the Indian River plant. See note 4.
(9)	Primarily relates to property, plant and equipment, inventory and emission allowances. East Coal segment also includes the prepaid REMA leases of $336 million, $332 million and $329 million for December 31, 2009, December 31, 2008 and December 31, 2007, respectively. Other segment also includes our equity method investment in Sabine Cogen, LP of $19 million, $22 million and $25 million as of December 31, 2009, 2008 and 2007, respectively.
(10)	Represents assets not assigned to a segment. Includes primarily cash and cash equivalents, accounts and notes receivable, derivative assets, margin deposits, certain property, plant and equipment related to corporate assets and other assets. The amount as of December 31, 2007 also includes goodwill of $327 million.
(11)	Includes capital expenditures for property, plant and equipment and purchases of emission allowances. All of our long-lived assets are in the United States.
(12)	Represents non-cash adjustments to reflect capital expenditures on a cash basis (as by segment data is as incurred) and purchases of emission allowances that are not assigned to a segment.
(13)	Includes $253 million for affiliates.
(14)	Includes $1.6 billion in revenues from a single counterparty, which represented 46% of our consolidated revenues. This counterparty is included in our East Coal and East Gas segments. As of December 31, 2008, $95 million was outstanding from this counterparty and collected in 2009.
(15)	Excludes $233 million and $(9) million of hedges and other items and unrealized losses on energy derivatives, respectively, that are included in our consolidated revenues or cost of sales.
(16)	Relates to gain on sale of Bighorn plant, which was sold in October 2008.
(17)	Relates to gains on the investment in and receivables from Channelview, which was deconsolidated in August 2007 and the plant was sold in July 2008.
(18)	Primarily relates to gains on sales of CO2 exchange allowances.
(19)	Includes $127 million from affiliates.
(20)	Includes $1.0 billion in revenues from a single counterparty, which represented 31% of our consolidated revenues. This counterparty is included in our East Coal and East Gas segments. As of December 31, 2007, $116 million was outstanding from this counterparty and collected in 2008.
(21)	Excludes $(104) million and $7 million of hedges and other items and unrealized gains on energy derivatives, respectively, that are included in our consolidated revenues or cost of sales.
(22)	Primarily relates to gains on sales of equipment held in storage.

F-63

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	2009			2008			2007
	(in millions)
Open gross margin for all segments	$	826		$	1,256		$	1,259
Hedges and other items		(152	)		233			(104	)
Unrealized gains (losses) on energy derivatives		22			(9	)		7
Operation and maintenance		(550	)		(595	)		(643	)
General and administrative		(101	)		(122	)		(135	)
Western states litigation and similar settlements		—			(37	)		(22	)
Gains on sales of assets and emission and exchange allowances, net		22			93			26
Goodwill and long-lived assets impairments		(211	)		(305	)		—
Depreciation and amortization		(269	)		(313	)		(398	)
Operating income (loss)		(413	)		201			(10	)
Income of equity investment, net		1	(1)		1	(1)		5	(1)
Debt extinguishments losses		(8	)		(2	)		(114	)
Other, net		—			5			—
Interest expense		(186	)		(200	)		(262	)
Interest income		2			21			19
Income (loss) from continuing operations before income taxes	$	(604	)	$	26		$	(362	)

(1) Relates to our equity method investment in Sabine Cogen, LP, which is included in our Other segment.

(21)   Sales of Assets and Emission and Exchange Allowances

We record gains/losses on sales of assets and emission and exchange allowances on the same line in our consolidated statements of operations.

Bighorn Plant.  We sold our Bighorn plant (from our West segment) for $500 million in October 2008 for a gain of $47 million.

Channelview Plant.  We sold our Channelview plant (which was deconsolidated in August 2007 and came from our Other segment) for $500 million in July 2008 for a gain of $6 million.

Emission and Exchange Allowances.  We sold emission (primarily SO₂) and exchange (CO₂) allowances during 2009, 2008 and 2007 for gains of $17 million, $38 million and $1 million, respectively.

Property, Plant and Equipment.  We sold equipment that was primarily held in storage for $82 million during 2007 for gains of $24 million.

(22)   Sale of Channelview’s Plant and the Bankruptcy Filings

In August 2007, Channelview filed voluntary petitions in the United States Bankruptcy Court for the District of Delaware for reorganization under Chapter 11 of the Bankruptcy Code. Channelview filed for bankruptcy protection to prevent the lenders from exercising their remedies, including foreclosing on the project. The bankruptcy cases were jointly administered, with Channelview managing its business in the ordinary course as debtors-in-possession subject to the supervision of the bankruptcy court. Channelview emerged from bankruptcy in October 2009.

In July 2008, Channelview sold its plant and related contracts for $500 million and paid off its secured lenders. During 2008, we recognized a $6 million gain relating to our net investment in and receivables from

F-64

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Channelview and incurrence of sale-related costs (classified in gains (losses) on sales of assets and emission and exchange allowances, net). As of December 31, 2008, our net investment in and receivables from Channelview was $59 million, classified as a current asset.

Channelview has distributed funds to us relating primarily to net proceeds from the sale, pre-petition sales of fuel to Channelview and funds from operations. We received $25 million during 2008 and $35 million during 2009.

As a result of the bankruptcies, we deconsolidated Channelview’s financial results from August 2007 through October 2009 and reported our investment in Channelview using the cost method. The following table describes the assets we consolidated upon the emergence from bankruptcy of Channelview:

	December 31, 2009
	(in millions)
Restricted cash	$	17	(1)
Deferred tax assets relating to federal and state net operating loss carryforwards		18	(2)

(1)	Of this amount, $10 million is payable to a third party and included in accounts payable in our consolidated balance sheet as of December 31, 2009.
(2)	We had assessed our future ability to use these deferred tax assets and had provided a valuation allowance for this amount in our consolidated balance sheet prior to the reconsolidation. See note 14.

(23)   Discontinued Operations

(a)   Retail Energy Segment.

General.  On May 1, 2009, we sold our Texas retail business to a subsidiary (the buyer) of NRG Energy, Inc. (NRG) for $363 million in cash including the value of the net working capital. In connection with the sale, we received net proceeds of $312 million during 2009. This sale also included the rights to the Reliant Energy name. Accordingly, we changed our name to RRI Energy, Inc. on May 2, 2009. In connection with the sale, the lawsuit against our former retail affiliates related to the termination of the retail working capital facility was dismissed.

In connection with the sale transaction, we entered into a two-year sublease on our corporate office building with the buyer, with sublease rental income totaling $17 million over that period. We also entered a one-year transition services agreement with the buyer, which includes terms and conditions for information technology services, accounting services and human resources.

Pre-Tax Gain on Sale.  We recognized during the second quarter of 2009 a pre-tax gain on this sale of $1.2 billion, which is primarily due to the net derivative liability balance of $1.1 billion included in the transaction.

Federal Valuation Allowance.  As a result of the sale, we released $50 million of our discontinued federal valuation allowance for deferred tax assets in discontinued operations during the second quarter of 2009.

Use of Proceeds and Assumptions Related to Debt, Deferred Financing Costs and Interest Expense on Discontinued Operations.  As required by our debt agreements, offers to purchase secured notes and PEDFA bonds at par were made with a portion of the net proceeds. We purchased $261 million of the outstanding debt ($169 million of the secured notes and $92 million of the PEDFA bonds) in 2009. These amounts and activity have been classified in discontinued operations. See note 7. We also classified as discontinued operations the related deferred financing costs and interest expense on this debt. We allocated $8 million, $16 million and $16 million of related interest expense during 2009, 2008 and 2007, respectively, to discontinued operations.

F-65

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Other Retail Energy Segment Discontinued Operations.  We sold our commercial, industrial and governmental/institutional (C&I) contracts in the PJM (excluding Illinois) and New York areas (collectively, Northeast) in December 2008. We sold our Illinois C&I contracts in December 2009 and recognized a pre-tax gain on sale of $12 million. As these were a part of our retail energy segment, we have included the activity in our discontinued operations.

(b)   Other Discontinued Operations.

Subsequent to the sale of our New York plants in February 2006, we continue to have (a) property tax and sales and use tax settlements and (b) settlements with the independent system operator. In addition, we periodically record amounts for contingent consideration received for the 2003 sale of our European energy operations. These amounts are classified as discontinued operations in our results of operations and balance sheets, as applicable.

(c)   All Discontinued Operations.

The following summarizes certain financial information of the businesses reported as discontinued operations:

	Retail Energy			New York			European
	Segment			Plants			Energy		Total
	(in millions)
2009
Revenues	$	2,036		$	2		$	—	$	2,038
Income before income tax expense/benefit		1,280	(1)(2)(3)		3			9		1,292
2008
Revenues	$	9,159		$	—		$	—	$	9,159
Income (loss) before income tax expense/benefit		(899	)(4)(5)(6)		(4	)		10		(893	)
2007
Revenues	$	8,006		$	(3	)	$	—	$	8,003
Income before income tax expense/benefit		855	(7)		7			—		862

(1)	Includes $173 million of unrealized losses on energy derivatives.
(2)	Includes $1.2 billion gain on sale (of which $1.1 billion relates to derivatives) of Texas retail business.
(3)	Includes $12 million gain on sale of Illinois C&I contracts.
(4)	Includes $734 million of unrealized losses on energy derivatives.
(5)	Includes $63 million gain on sale of Northeast C&I contracts.
(6)	Includes $82 million in losses due to a change in accounting estimate around nonperformance risk on derivative liabilities.
(7)	Includes $438 million of unrealized gains on energy derivatives.

F-66

RRI ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following summarizes the assets and liabilities related to our discontinued operations:

	December 31,
	2009(1)		2008
	(in millions)
Current Assets:
Cash and cash equivalents	$	4	$	105
Accounts receivable, principally customer, net		6		870
Derivative assets		41		1,010
Margin deposits		56		295
Accumulated deferred income taxes, net of federal valuation allowance of $1 million and $38 million		—		217
Other current assets		1		9
Total current assets		108		2,506
Property, Plant and Equipment, net		—		57
Other Assets:
Goodwill and other intangibles, net		—		59
Derivative assets		5		324
Accumulated deferred income taxes, net of federal valuation allowance of $0 and $12 million		—		48
Other		—		7
Total long-term assets		5		495
Total Assets	$	113	$	3,001
Current Liabilities:
Accounts payable, principally trade	$	2	$	480
Derivative liabilities		35		1,637
Accrual for transmission and distribution charges		—		83
Retail customer deposits		—		59
Other current liabilities		21		117
Total current liabilities		58		2,376
Other Liabilities:
Derivative liabilities		5		612
Other liabilities		9		—
Total other liabilities		14		612
Long-term Debt		—		261
Total long-term liabilities		14		873
Total Liabilities	$	72	$	3,249

(1) In connection with our various sales classified as discontinued operations, some activity remains with us and will be classified as such through various dates ending in 2013.

F-67

RRI ENERGY, INC. AND SUBSIDIARIES

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

2009, 2008 and 2007

Column A	Column B			Column C					Column D			Column E
				Additions
	Balance at			Charged			Charged		Deductions			Balance at
	Beginning			to			to Other		from			End
Description	of Period			Income			Accounts(1)		Reserves(2)			of Period
	(in thousands)
2009
Reserves deducted from derivative assets and liabilities(3)	$	(6,425	)	$	14,489		$	—	$	—		$	8,064
Reserves for severance		—			9,056			—		(8,371	)		685
2008
Reserves deducted from derivative assets and liabilities(3)	$	6,160		$	(12,427	)	$	—	$	(158	)	$	(6,425	)
2007
Reserves deducted from derivative assets(3)	$	10,747		$	(4,428	)	$	—	$	(159	)	$	6,160

(1)	Represents charges to accumulated other comprehensive income/loss.
(2)	Deductions from reserves represent losses or expenses for which the respective reserves were created. In the case of the allowance for doubtful accounts, such deductions are net of recoveries of amounts previously written off.
(3)	See notes 2(d), 2(e) and 6 to our consolidated financial statements.

F-68

Report of Independent Registered Public Accounting Firm

The Board of Directors and Member

RRI Energy Northeast Generation, Inc., Sole Member of RRI Energy Mid-Atlantic Power Holdings, LLC:

We have audited the accompanying consolidated balance sheets of RRI Energy Mid-Atlantic Power Holdings, LLC and subsidiaries (the Company) as of December 31, 2009 and 2008, and the related consolidated statements of operations, member’s equity and comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2009. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of RRI Energy Mid-Atlantic Power Holdings, LLC and subsidiaries as of December 31, 2009 and 2008, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2009, in conformity with U.S. generally accepted accounting principles.

As discussed in note 2(d) to the consolidated financial statements, the Company changed its method of accounting for fair value measurements of financial instruments due to the adoption of new accounting requirements issued by the FASB, as of January 1, 2008.

KPMG LLP

Houston, Texas

February 24, 2010

F-69

RRI ENERGY MID-ATLANTIC POWER HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	2009			2008			2007
	(thousands of dollars)
Revenues:
Revenues	$	23,612		$	39,336		$	(10,235	)
Revenues—affiliates		525,403			879,332			696,856
Total		549,015			918,668			686,621
Expenses:
Cost of sales		297,852			347,761			244,695
Cost of sales—affiliates		3,874			11,535			9,930
Operation and maintenance		108,290			112,507			104,600
Operation and maintenance—affiliates		66,565			59,431			57,831
Facilities leases		59,848			59,848			59,848
General and administrative—affiliates		56,272			45,987			44,029
Gains on sales of assets and emission allowances, net		(501	)		(1,247	)		(1,969	)
Goodwill impairment		—			3,635			—
Depreciation and amortization		47,307			74,960			88,449
Total operating expense		639,507			714,417			607,413
Operating Income (Loss)		(90,492	)		204,251			79,208
Other Income (Expense):
Interest expense		(752	)		(1,239	)		(1,230	)
Interest expense—affiliates		(52,561	)		(58,935	)		(70,485	)
Interest income		41			396			837
Total other expense		(53,272	)		(59,778	)		(70,878	)
Income (Loss) Before Income Taxes		(143,764	)		144,473			8,330
Income tax expense (benefit)		(55,363	)		59,459			5,262
Net Income (Loss)	$	(88,401	)	$	85,014		$	3,068

See Notes to the Consolidated Financial Statements

F-70

RRI ENERGY MID-ATLANTIC POWER HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31,
	2009			2008
	(thousands of dollars)
ASSETS
Current Assets:
Cash and cash equivalents	$	18,062		$	29,713
Restricted cash		1,541			1,632
Accounts receivable		5,910			5,712
Receivables from affiliates, net		49,337			59,770
Inventory		94,772			90,241
Prepaid lease		59,030			59,030
Derivative assets		32,358			34,169
Accumulated deferred income taxes		19,258			29,612
Prepayments and other current assets		7,309			8,591
Total current assets		287,577			318,470
Property, Plant and Equipment, net		766,429			723,478
Other Assets:
Other intangibles, net		96,603			98,727
Derivative assets		7,816			42,126
Accumulated deferred income taxes		33,818			19,145
Prepaid lease		277,370			273,374
Other		33,886			33,432
Total other assets		449,493			466,804
Total Assets	$	1,503,499		$	1,508,752
LIABILITIES AND MEMBER’S EQUITY
Current Liabilities:
Current portion of long-term debt	$	103		$	96
Accounts payable, principally trade		30,421			38,134
Subordinated accounts payable to affiliates, net		309,822			161,126
Subordinated interest payable to affiliate		78,227			26,638
Derivative liabilities		76,291			103,176
Note payable to affiliate		16,191			—
Subordinated working capital facility payable to affiliate		25,809			—
Other		19,422			50,072
Total current liabilities		556,286			379,242
Other Liabilities:
Derivative liabilities		64,493			136,183
Benefit obligations		41,966			49,648
Taxes payable to RRI Energy, Inc. and related accrued interest		780			27,612
Other		22,127			29,511
Total other liabilities		129,366			242,954
Subordinated Note Payable to Affiliate		543,563			543,563
Long-term Debt		444			546
Commitments and Contingencies
Member’s Equity:
Common stock; no par value (1,000 shares authorized, issued and outstanding)		—			—
Additional paid-in capital		284,672			284,672
Retained earnings		22,018			110,307
Accumulated other comprehensive loss		(32,850	)		(52,532	)
Total member’s equity		273,840			342,447
Total Liabilities and Member’s Equity	$	1,503,499		$	1,508,752

See Notes to the Consolidated Financial Statements

F-71

RRI ENERGY MID-ATLANTIC POWER HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	2009			2008			2007
	(thousands of dollars)
Cash Flows from Operating Activities:
Net income (loss)	$	(88,401	)	$	85,014		$	3,068
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Goodwill impairment		—			3,635			—
Depreciation and amortization		47,307			74,960			88,449
Deferred income taxes		(29,873	)		13,670			4,341
Net changes in energy derivatives		(37,034	)		45,636			35,711
Gains on sales of assets and emission allowances, net		(501	)		(1,247	)		(1,969	)
Other, net		(92	)		(4	)		(27	)
Changes in other assets and liabilities:
Accounts receivable		(198	)		(837	)		(280	)
Accounts receivable from affiliates, net		4,448			13,859			(47,624	)
Inventory		(4,531	)		(8,859	)		(693	)
Prepaid lease		(3,996	)		(3,241	)		(5,805	)
Accounts payable		(2,251	)		2,253			3,976
Other current assets		1,556			(1,382	)		246
Other current liabilities		(2,857	)		3,362			199
Other assets		(454	)		7,389			337
Subordinated accounts payable to affiliates, net		148,734			(32,588	)		42,531
Subordinated interest payable to affiliate, net		45,448			(3,162	)		(33,787	)
Income taxes payable/receivable		67			459			698
Taxes payable to RRI Energy, Inc. and related accrued interest		(26,832	)		27,612			—
Other liabilities		2,552			2,359			3,029
Net cash provided by operating activities		53,092			228,888			92,400
Cash Flows from Investing Activities:
Capital expenditures		(76,367	)		(70,218	)		(33,172	)
Proceeds from sales of emission allowances—affiliate		747			74			3,744
Purchases of emission allowances—affiliate		(31,312	)		(26,473	)		(50,799	)
Restricted cash		91			31			(1,663	)
Other, net		98			1,132			752
Net cash used in investing activities		(106,743	)		(95,454	)		(81,138	)
Cash Flows from Financing Activities:
Proceeds from note payable to affiliate		16,191			—			—
Proceeds from subordinated working capital facility payable to affiliate		25,809			—			—
Payments on subordinated note payable to affiliate		—			(75,095	)		—
Distributions to RRI Energy, Inc.		—			(57,162	)		—
Net cash provided by (used in) financing activities		42,000			(132,257	)		—
Net Change in Cash and Cash Equivalents		(11,651	)		1,177			11,262
Cash and Cash Equivalents at Beginning of Period		29,713			28,536			17,274
Cash and Cash Equivalents at End of Period	$	18,062		$	29,713		$	28,536
Supplemental Disclosure of Cash Flow Information:
Cash Payments:
Interest paid to affiliate (net of amounts capitalized)	$	(6,141	)	$	81,105		$	91,884
Interest paid to third parties		220			247			286
Income taxes paid (net of income tax refunds received)		1,508			18,266			221

See Notes to the Consolidated Financial Statements

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RRI ENERGY MID-ATLANTIC POWER HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF MEMBER’S EQUITY AND COMPREHENSIVE INCOME (LOSS)

										Accumulated Other Comprehensive Income (Loss)
													Benefits						Total
										Deferred			Actuarial						Accumulated
					Additional		Retained			Derivative			Net			Benefits			Other			Total			Comprehensive
	Common Stock				Paid-In		Earnings			Gains			Gain			Net Prior			Comprehensive			Member’s			Income
	Shares		Amount		Capital		(Deficit)			(Losses)			(Loss)			Service Costs			Income (Loss)			Equity			(Loss)
	(thousands of dollars)
Balance, December 31, 2006		1,000	$	—	$	284,672	$	79,387		$	(81,075	)	$	(2,861	)	$	(2,737	)	$	(86,673	)	$	277,386
Net income								3,068															3,068		$	3,068
Deferred gain from cash flow hedges, net of tax of $3 million											2,929									2,929			2,929			2,929
Reclassification of net deferred loss from cash flow hedges into net income, net of tax of $9 million											12,802									12,802			12,802			12,802
Reclassification of net prior service costs into net income, net of tax of $0																	593			593			593			593
Reclassification of actuarial net loss into net income, net of tax of $0														40						40			40			40
Deferred benefits, net of tax of $1 million and $2 million														2,851			2,394			5,245			5,245			5,245
Comprehensive income																									$	24,677
Balance, December 31, 2007		1,000	$	—	$	284,672	$	82,455		$	(65,344	)	$	30		$	250		$	(65,064	)	$	302,063
Net income								85,014															85,014		$	85,014
Distributions to RRI Energy, Inc.								(57,162	)														(57,162	)
Reclassification of net deferred loss from cash flow hedges into net income, net of tax of $11 million											17,388									17,388			17,388			17,388
Reclassification of net prior service costs into net income, net of tax of $0																	419			419			419			419
Reclassification of actuarial net loss into net income, net of tax of $0														46						46			46			46
Deferred benefits, net of tax of $4 million														(5,321	)					(5,321	)		(5,321	)		(5,321	)
Comprehensive income																									$	97,546
Balance, December 31, 2008		1,000	$	—	$	284,672	$	110,307		$	(47,956	)	$	(5,245	)	$	669		$	(52,532	)	$	342,447
Net loss								(88,401	)														(88,401	)	$	(88,401	)
Non-cash distributions to RRI Energy, Inc.								112															112
Reclassification of net deferred loss from cash flow hedges into net loss, net of tax of $11 million											14,590									14,590			14,590			14,590
Reclassification of net prior service costs into net loss, net of tax of $0																	508			508			508			508
Reclassification of actuarial net loss into net loss, net of tax of $0														240						240			240			240
Deferred benefits, net of tax of $4 million and $0														4,086			258			4,344			4,344			4,344
Comprehensive loss																									$	(68,719	)
Balance, December 31, 2009		1,000	$	—	$	284,672	$	22,018		$	(33,366	)	$	(919	)	$	1,435		$	(32,850	)	$	273,840

See Notes to the Consolidated Financial Statements

F-73

RRI ENERGY MID-ATLANTIC POWER HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)   Background and Basis of Presentation

Background.  “REMA LLC” refers to RRI Energy Mid-Atlantic Power Holdings, LLC, a Delaware limited liability company. “REMA” refers to REMA LLC and its consolidated subsidiaries. “RRI Energy” refers to RRI Energy, Inc. and its consolidated subsidiaries. REMA LLC was formed in December 1998 and is an indirect subsidiary of RRI Energy Power Generation, Inc., a wholly-owned subsidiary of RRI Energy.

REMA provides energy, capacity, ancillary and other energy services to wholesale customers in competitive energy markets in the United States through its ownership and operation of and contracting for power generation capacity. The majority of its sales to third parties are through RRI Energy (affiliates). REMA owns or leases interests in 17 electric power plants in Pennsylvania, New Jersey and Maryland with an aggregate net generating capacity of 3,430 megawatts (MW).

Name Change of Reliant Energy.  Reliant Energy, Inc. changed its name to RRI Energy, Inc. effective May 2, 2009 in connection with the sale of its Texas retail business.

Basis of Presentation.  These consolidated statements include all revenues and costs directly attributable to REMA including costs for facilities and costs for functions and services performed by RRI Energy and charged to REMA. All significant intercompany transactions have been eliminated.

(2)   Summary of Significant Accounting Policies

(a)   Use of Estimates and Market Risk and Uncertainties.

Management makes estimates and assumptions to prepare financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) that affect:

•  the reported amounts of assets, liabilities and equity

•  the reported amounts of revenues and expenses

•  disclosure of contingent assets and liabilities at the date of the financial statements

Actual results could differ from those estimates.

REMA evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which REMA believes to be reasonable under the circumstances. REMA adjusts such estimates and assumptions when facts and circumstances dictate. REMA has evaluated subsequent events for recording and disclosure to February 25, 2010, the date the financial statements were issued.

REMA’s critical accounting estimates include: (a) fair value of derivative assets and liabilities; (b) recoverability and fair value of long-lived assets; (c) loss contingencies and (d) deferred tax assets, valuation allowances and tax liabilities.

REMA is subject to various risks inherent in doing business. See notes 2(c), 2(d), 2(e), 2(f), 2(g), 2(m), 2(n), 2(o), 2(p), 3, 4, 5, 6, 7, 8, 10, 11, 12 and 13.

(b)   Principles of Consolidation.

REMA LLC includes its accounts and those of its wholly-owned subsidiaries in its consolidated financial statements. REMA does not consolidate three power generating facilities (see note 12(a)), which are under operating leases.

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RRI ENERGY MID-ATLANTIC POWER HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(c)   Revenues.

Power Generation Revenues.  REMA records gross revenues from the sales of power and other energy services under the accrual method. Electric power and other energy services are sold at market-based prices through related party affiliates, existing power exchanges or third party contracts. Energy sales and services that have been delivered but not billed by period end are estimated. During 2009, 2008 and 2007, REMA recorded $364 million, $793 million and $626 million, respectively, in power generation revenues.

Capacity Revenues.  REMA records gross revenues from the sales of capacity under the accrual method. These sales are sold at market-based prices primarily through the RPM auction market in PJM. The majority of sales are through affiliates. Sales that have been delivered but not billed by period end are estimated. During 2009, 2008 and 2007, REMA recorded $185 million, $126 million and $61 million, respectively, in capacity revenues.

During 2009, 2008 and 2007, REMA recognized $10 million, $(1) million and $(46) million in unrealized gains (losses) on energy derivatives included in revenues from third parties. See notes 2(e) and 6.

(d)   Fair Value Measurements.

Fair Value Hierarchy and Valuation Techniques.  REMA applies recurring fair value measurements to its financial assets and liabilities. In determining fair value, REMA generally uses a market approach and incorporates assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation techniques. These inputs can be readily observable, market corroborated, or generally unobservable internally-developed inputs. Based on the observability of the inputs used in the valuation techniques, the financial assets and liabilities are classified as follows:

Level 1:	Level 1 represents unadjusted quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date. REMA’s cash equivalents are also valued using Level 1 inputs.
Level 2:	Level 2 represents quoted market prices for similar assets or liabilities in active markets, quoted market prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data. This category includes over-the-counter (OTC) derivative instruments such as forwards.
Level 3:	This category includes energy derivative instruments whose fair value is estimated based on prices in inactive markets that are not observable. REMA’s OTC derivative instruments that are transacted in less liquid markets with limited pricing information are included in Level 3, which are coal contracts.

Fair Value of Derivative Instruments and Certain Other Assets.  REMA applies fair value measurements to its financial assets and liabilities. Fair value measurements of its financial assets and liabilities are as follows:

	December 31, 2009
							Total
	Level 1		Level 2		Level 3		Fair Value
	(in millions)
Total derivative assets	$	—	$	40	$	—	$	40
Total derivative liabilities		—		135		6		141
Cash equivalents(1)		18		—		—		18

(1) Represent investments in money market funds and are included in cash and cash equivalents in REMA’s consolidated balance sheet. REMA had $18 million of cash equivalents included in cash and cash equivalents.

F-75

RRI ENERGY MID-ATLANTIC POWER HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	December 31, 2008
										Total
	Level 1		Level 2		Level 3		Reclassifications			Fair Value
	(in millions)
Total derivative assets	$	—	$	78	$	—	$	(2	)(1)	$	76
Total derivative liabilities		—		208		33		(2	)(1)		239
Cash equivalents(2)		30		—		—		—			30

(1)	Reclassifications are required to reconcile to the consolidated balance sheet presentation.
(2)	Represent investments in money market funds and are included in cash and cash equivalents in REMA’s consolidated balance sheet. REMA had $30 million of cash equivalents included in cash and cash equivalents.

The following is a reconciliation of changes in fair value of net derivative assets and liabilities classified as Level 3:

	Net Derivatives
	(Level 3)
	2009			2008
	(in millions)
Balance, beginning of period (net asset (liability))	$	(33	)	$	12
Total gains (losses) realized/unrealized:
Included in earnings(1)		(25	)		36
Purchases, issuances and settlements (net)		52			(81	)
Transfers in and/or out of Level 3 (net)		—			—
Balance, end of period (net asset (liability))	$	(6	)	$	(33	)
Changes in unrealized gains/losses relating to derivative assets and liabilities still held as of December 31, 2009 and 2008:
Revenues	$	—		$	—
Cost of sales		(6	)		1
Total	$	(6	)	$	1

(1) Recorded in cost of sales.

Nonperformance Risk on Derivative Liabilities.  Fair value measurement of REMA’s derivative liabilities reflects the nonperformance risk related to that liability, which is its own credit risk. REMA derives its nonperformance risk by applying RRI Energy, Inc.’s credit default swap spread against the respective derivative liability. As of December 31, 2009 and 2008, REMA had $0 and $2 million, respectively, in reserves for nonperformance risk on derivative liabilities. This change in accounting estimate had an impact during 2008 as follows (income (loss)):

	2008
	Income before
	Income Taxes			Net Income
	(in millions)
Total derivative liabilities	$	2	(1)	$	1

(1) This amount represented a decrease in REMA’s derivative liabilities with the corresponding unrealized gains recorded in cost of sales.

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RRI ENERGY MID-ATLANTIC POWER HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Fair Value of Other Financial Instruments.  The fair values of cash and accounts receivable and payable approximate their carrying amounts.

See notes 2(e) and 6.

(e)   Derivatives and Hedging Activities.

Changes in commodity prices prior to the energy delivery period are inherent in REMA’s business. Accordingly, REMA may enter selective hedges, including originated transactions, to (a) seek potential value greater than what is available in the spot or day-ahead markets, (b) address operational requirements or (c) seek a specific financial objective. For its risk management activities, REMA uses derivative and non-derivative contracts that provide for settlement in cash or by delivery of a commodity. REMA uses derivative instruments such as forwards and swaps to executive its hedge strategy.

REMA accounts for its derivatives under one of three accounting methods (mark-to-market, accrual (under the normal purchase/normal sale exception to fair value accounting) or cash flow hedge accounting) based on facts and circumstances. See note 2(d) for discussion on fair value measurements.

A derivative is recognized at fair value in the balance sheet whether or not it is designated as an accounting hedge, except for derivative contracts designated as normal purchase/normal sale exceptions, which are not in the consolidated balance sheet or results of operations prior to settlement resulting in accrual accounting treatment.

Realized gains and losses on derivative contracts used for risk management purposes and not held for trading purposes are reported either on a net or gross basis based on the relevant facts and circumstances. Hedging transactions that do not physically flow are included in the same caption as the items being hedged.

A summary of REMA’s derivative activities and classification in its results of operations is:

	Primary Exposure	Purpose for Holding or	Transactions that	Transactions that
Instrument	Risk	Issuing Instrument(1)	Physically Flow/Settle(2)	Financially Settle(3)
Power forward and swap contracts	Price risk	Power sales to customers	Revenues	Revenues
		Power purchases related to operations	Cost of sales	Revenues
Natural gas and fuel forward and swap contracts	Price risk	Natural gas and fuel purchases related to operations	Cost of sales	Cost of sales

(1)	The purpose for holding or issuing does not impact the accounting method elected for each instrument.
(2)	Includes classification of unrealized gains and losses for derivative transactions reclassified to inventory upon settlement.
(3)	Includes classification for mark-to-market derivatives and amounts reclassified from accumulated other comprehensive income (loss) related to cash flow hedges.

In addition to price risk, REMA is exposed to credit and operational risk. RRI Energy has a risk control framework, to which REMA is subject, to manage these risks, which include: (a) measuring and monitoring these risks, (b) review and approval of new transactions relative to these risks, (c) transaction validation and (d) portfolio valuation and reporting. REMA uses mark-to-market valuation, value-at-risk and other metrics in monitoring and measuring risk. RRI Energy’s risk control framework includes a variety of separate but complementary processes, which involve commercial and senior management and RRI Energy’s Board of Directors. See note 2(f) for further discussion of REMA’s credit policy.

F-77

RRI ENERGY MID-ATLANTIC POWER HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Earnings Volatility from Derivative Instruments.  REMA may experience volatility in its earnings resulting from contracts receiving accrual accounting treatment while related derivative instruments are marked to market through earnings. As discussed in note 2(a), REMA’s financial statements include estimates and assumptions made by management throughout the reporting periods and as of the balance sheet dates. It is reasonable that subsequent to the balance sheet date of December 31, 2009, changes, some of which could be significant, have occurred in the inputs to the various fair value measures, particularly relating to commodity price movements.

Unrealized gains and losses on energy derivatives consist of both gains and losses on energy derivatives during the current reporting period for derivative assets or liabilities that have not settled as of the balance sheet date and the reversal of unrealized gains and losses from prior periods for derivative assets or liabilities that settled prior to the balance sheet date during the current reporting period.

Cash Flow Hedges.  During the first quarter of 2007, REMA de-designated its remaining cash flow hedges; therefore, as of December 31, 2009 and 2008, REMA does not have any designated cash flow hedges. The fair value of REMA’s de-designated cash flow hedges are deferred in accumulated other comprehensive loss, net of tax, to the extent the contracts have been effective as hedges, until the forecasted transactions affect earnings. At the time the forecasted transactions affect earnings, REMA reclassifies the amounts in accumulated other comprehensive loss into earnings.

Presentation of Derivative Assets and Liabilities.  REMA presents its derivative assets and liabilities on a gross basis (regardless of master netting arrangements with the same counterparty). Cash collateral amounts are also presented on a gross basis.

(f)   Credit Risk.

REMA has a credit policy that governs the management of credit risk, including the establishment of counterparty credit limits and specific transaction approvals. Credit risk is monitored daily and the financial condition of counterparties is reviewed periodically. REMA tries to mitigate credit risk by entering into contracts that permit netting and allow it to terminate upon the occurrence of certain events of default. REMA measures credit risk as the replacement cost for its derivative positions plus amounts owed for settled transactions.

REMA’s credit exposure is based on its derivative assets and accounts receivable from counterparties, after taking into consideration netting within each contract and any master netting contracts with counterparties. REMA believes this represents the maximum potential loss it could incur if its counterparties failed to perform according to their contract terms.

As of December 31, 2009, REMA has no credit exposure. As of December 31, 2008, one investment grade counterparty (an energy merchant) represented 100% ($1 million) of REMA’s credit exposure and REMA held no collateral from this counterparty.

REMA’s credit availability is based on RRI Energy’s credit ratings. Based on RRI Energy’s current credit rating, any additional collateral postings that would be required from REMA due to a credit downgrade would be immaterial. As of December 31, 2009 and 2008, REMA has posted cash margin deposits of $0 as collateral for its derivative liabilities receiving mark-to-market accounting treatment and its accounts payable.

(g)   Property, Plant and Equipment and Depreciation Expense.

REMA computes depreciation using the straight-line method based on estimated useful lives. Depreciation expense was $36 million, $35 million and $33 million during 2009, 2008 and 2007, respectively.

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RRI ENERGY MID-ATLANTIC POWER HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	Estimated Useful		December 31,
	Lives (Years)		2009			2008
			(in millions)
Electric generation facilities		20 – 30	$	986	(1)	$	849	(2)
Other		10 – 26		14			14
Land				26			26
Assets under construction				33			93
Total				1,059			982
Accumulated depreciation				(293	)		(259	)
Property, plant and equipment, net			$	766		$	723

(1)	Includes $234 million ($212 million net of accumulated depreciation) relating to leasehold improvements for the Keystone, Shawville and Conemaugh plants. The original depreciation periods for these leasehold improvements range primarily from 10 to 31 years.
(2)	Includes $169 million ($152 million net of accumulated depreciation) relating to leasehold improvements for the Keystone, Shawville and Conemaugh plants.

See note 4 for discussion of REMA’s recoverability assessments of long-lived assets (property, plant and equipment and related intangible assets).

(h)   Intangible Assets and Amortization Expense.

Goodwill.  REMA performed its goodwill impairment test annually on April 1 and when events or changes in circumstances indicated that the carrying value may not have been recoverable. During 2008, REMA impaired its remaining goodwill. See note 5.

Other Intangibles.  REMA recognizes specifically identifiable intangible assets, including emission allowances, when specific rights and contracts are acquired. REMA has no intangible assets with indefinite lives recorded as of December 31, 2009 and 2008. See note 4 for discussion of REMA’s recoverability assessments of long-lived assets (property, plant and equipment and related intangible assets).

(i)   Income Taxes.

Federal.  REMA is included in the consolidated federal income tax returns of RRI Energy and calculates its income tax provision on a separate return basis, whereby RRI Energy pays all federal income taxes on REMA’s behalf and is entitled to any related tax savings. The difference between REMA’s current federal income tax expense or benefit, as calculated on a separate return basis, and related amounts paid to/received from RRI Energy, if any, are recorded to (a) income taxes payable to RRI Energy, Inc. if REMA has cumulative taxable income on a separate return basis or (b) deferred tax assets if REMA has cumulative taxable losses on a separate return basis. Deferred federal income taxes reflected on REMA’s consolidated balance sheet will ultimately be settled with RRI Energy. See notes 3 and 11.

State.  REMA is included in the consolidated state income tax returns of RRI Energy. It calculates its state provision, related payables or receivables and deferred state income taxes on a separate return basis and settles the related assets and liabilities with the governmental entity or RRI Energy based on the tax status of the applicable entities. See note 11.

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RRI ENERGY MID-ATLANTIC POWER HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(j)   Capitalization of Interest Expense.

REMA capitalizes interest on capital projects greater than $10 million and under development for one year or more. During 2009, 2008 and 2007, REMA capitalized $6 million, $4 million and $1 million of interest expense, respectively, relating to environmental capital expenditures for SO₂ emission reductions at the Keystone plant.

(k)   Cash and Cash Equivalents.

REMA records all highly liquid short-term investments with maturities of three months or less as cash equivalents.

(l)   Restricted Cash.

Restricted cash includes cash at certain subsidiaries, the distribution or transfer of which is restricted by financing and other agreements.

(m)   Inventory.

REMA values fuel inventories at the lower of average cost or market. REMA reduces these inventories as they are used in the production of electricity. During 2009, 2008 and 2007, REMA recorded $42 million, $7 million and $1 million, respectively, for lower of average cost or market valuation adjustments in cost of sales. REMA values materials and supplies at average cost. REMA removes these inventories when they are used for repairs, maintenance or capital projects.

	December 31,
	2009		2008
	(in millions)
Materials and supplies, including spare parts	$	58	$	50
Coal		25		27
Heating oil		12		13
Total inventory	$	95	$	90

(n)   Environmental Costs.

REMA expenses environmental expenditures related to existing conditions that do not have future economic benefit. REMA capitalizes environmental expenditures for which there is a future economic benefit. REMA records liabilities for expected future costs, on an undiscounted basis, related to environmental assessments and/or remediation when they are probable and can be reasonably estimated. See note 13.

(o)   Asset Retirement Obligations.

REMA’s asset retirement obligations relate to future costs primarily associated with coal ash disposal site closures. Changes in asset retirement obligations, classified in other long-term liabilities, are:

	2009		2008
	(in millions)
Balance, beginning of period	$	8	$	7
Revisions in estimated cash flows		2		—
Accretion expense		—		1
Balance, end of period	$	10	$	8

F-80

RRI ENERGY MID-ATLANTIC POWER HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of December 31, 2009 and 2008, REMA has $17 million and $15 million, respectively, (classified in other long-term assets) on deposit with the state of Pennsylvania to guarantee its obligation related to future closures of coal ash disposal landfill sites. See note 13.

(p)   Repair and Maintenance Costs for Power Generation Assets.

REMA expenses repair and maintenance costs as incurred.

(q)   Deferred Lease Costs.

REMA incurred costs in connection with its sale-leaseback transactions in 2000 (see note 12(a)). These costs are deferred and amortized, using the straight-line method, over the life of the individual sale-leaseback transactions. REMA amortized $1 million to facilities lease expense during 2009, 2008 and 2007. As of December 31, 2009 and 2008, REMA had $17 million and $18 million, respectively, of net deferred lease costs classified in other long-term assets in its consolidated balance sheets.

(r)   New Accounting Pronouncements Adopted.

FASB Codification.  The Financial Accounting Standard Board’s Accounting Standards Codification became effective for REMA in the third quarter of 2009. The Codification brings together in one place all authoritative GAAP except for rules, regulations and interpretative releases of the Securities and Exchange Commission which are also authoritative GAAP for REMA. This change did not materially affect REMA’s consolidated financial statements.

Measuring Liabilities at Fair Value.  This guidance provides clarification for measuring liabilities at fair value when there may be a lack of observable market information and requires an entity under those circumstances to employ techniques that use (a) the quoted price of the identical liability when traded as an asset, (b) quoted prices for similar liabilities or similar liabilities when traded as assets or (c) another valuation technique consistent with the fair value measurement principles such as an income approach or a market approach. This change did not impact REMA’s consolidated financial statements. See note 2(d).

Disclosures about Plan Assets.  This guidance requires enhanced disclosures regarding investment policies and strategies for REMA’s benefit plan assets as well as information about fair value measurements of plan assets. See note 8.

Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly.  This guidance provides direction on how to determine the fair value of certain assets and liabilities when there has been a significant decrease in the volume and level of activity for an asset or liability compared with normal market activity for the asset or liability. This guidance did not have a significant impact on REMA’s consolidated financial statements since the markets in which it purchases and sells commodities and derivative instruments are not distressed. See notes 2(d) and 6.

(s)   New Accounting Pronouncements Not Yet Adopted.

Improving Financial Reporting Around Variable Interest Entities.  For 2007, 2008 and 2009, REMA does not have any off-balance sheet arrangements to report under requirements effective prior to 2010. In connection with related amended accounting guidance for variable interest entities, which is effective as of January 1, 2010, REMA is assessing its leases for the interests in the Conemaugh, Keystone and Shawville plants (see note 12(a)). If (a) the single power plant legal entities, which own the plants or the interests in the plants are determined to be variable interest entities, (b) the contracts are determined to be or contain variable interests in those entities and (c) REMA has the power to direct the activities of the entities that most significantly impact the entities’ economic performance and the obligation to absorb losses of or the right to

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receive benefits from the entities that could be significant to the entities, REMA would be required to consolidate the entities, which could materially change REMA’s future financial statements.

Improving Disclosures about Fair Value Measurements.  Effective for the 2010 financial statements, this guidance provides for disclosures of significant transfers in and out of Levels 1 and 2. In addition, it clarifies existing disclosure requirements regarding inputs and valuation techniques as well as the appropriate level of disaggregation for fair value measurements disclosures. Effective for the 2011 financial statements, this guidance provides for disclosures of activity on a gross basis within the Level 3 reconciliation. These changes will only affect REMA’s disclosures.

(3)   Related Party Transactions

These financial statements include the impact of significant transactions between REMA and RRI Energy. The majority of these transactions involve the purchase or sale of energy, capacity, fuel, emission allowances or related services (including transportation, transmission and storage services) from or to REMA and allocations of costs to REMA for support services.

Support and Technical Services.  RRI Energy provides commercial support, technical services and other corporate services to REMA. RRI Energy allocates certain support services costs to REMA based on REMA’s underlying planned operating expenses relative to the underlying planned operating expenses of other entities to which RRI Energy provides similar services and also charges REMA for certain other services based on usage. Management believes this method of allocation is reasonable. These allocations and charges are not necessarily indicative of what would have been incurred had REMA been an unaffiliated entity. Payments to RRI Energy for support services are subordinated to certain obligations, including the lease obligations, pursuant to the lease documents.

The following details the amounts recorded as operation and maintenance—affiliates and general and administrative—affiliates:

	2009		2008		2007
	(in millions)
Allocated or charged by RRI Energy	$	117	$	100	$	96

Commodity Procurement and Marketing.  REMA has sales to and purchases from RRI Energy related to commodity procurement and marketing services.

	2009		2008		2007
	(in millions)
Sales to RRI Energy under various commodity agreements(1)	$	525	$	879	$	697
Purchases from RRI Energy under various commodity agreements(2)		3		10		8
Fees charged by RRI Energy for these services and included in operation and maintenance—affiliates		5		5		5
Fees charged by RRI Energy for these services and included in cost of sales—affiliates		1		1		2
Sales of emission allowances to RRI Energy(3)		1		—		4
Gains on emission allowances sales to RRI Energy(4)		—		—		1

(1)	Recorded in revenues—affiliates.
(2)	Recorded in cost of sales—affiliates.
(3)	Reflects price at which RRI Energy sold the emission allowances to third parties.
(4)	Recorded in gains on sales of assets and emission allowances, net.

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Subordinated Accounts Payable to Affiliates, Net.  Due to the transactions discussed above under support and technical services and commodity procurement and marketing, REMA records payables to and receivables from RRI Energy. As of December 31, 2009 and 2008, the net subordinated accounts payable to affiliates was $310 million and $161 million, respectively. The outstanding balance is classified as a current liability since REMA may pay the entire amount by December 31, 2010. Payments of this liability are subordinated to certain obligations, including the lease obligations, pursuant to the lease documents.

Subordinated Long-term Note Payable to Affiliate.  REMA has a note payable to RRI Energy. The note is due January 1, 2029 and accrues interest at a fixed rate of 9.4% per year. As of December 31, 2009 and 2008, REMA had $544 million outstanding under the note. Payments under this indebtedness are subordinated to certain obligations, including the lease obligations, pursuant to the lease documents. In connection with this note, REMA has accrued subordinated interest payable to affiliate of $78 million and $27 million as of December 31, 2009 and 2008, respectively. The outstanding accrued interest is classified as a current liability since REMA may pay the entire amount by December 31, 2010.

Working Capital Note.  REMA has a revolving note payable to RRI Energy under which REMA may borrow, and RRI Energy is committed to lend, up to $30 million for working capital needs. Borrowings under the note are unsecured and will rank equal in priority with REMA’s lease obligations. REMA periodically borrows on this note and repays the amounts throughout the year. The note accrues interest (which is paid monthly) at the prime rate plus 1.75%, which was 5.0% as of December 31, 2009. REMA may replace this note with a working capital facility from an unaffiliated lender if then permitted under RRI Energy’s debt agreements. As of December 31, 2009 and 2008, there were no borrowings outstanding under the note.

Subordinated Working Capital Facility.  REMA has an irrevocably committed subordinated working capital facility with RRI Energy. REMA may borrow under this facility to pay operating expenditures, senior indebtedness and rent, but excluding capital expenditures and subordinated obligations. In addition, RRI Energy must make advances to REMA and REMA must obtain such advances up to the maximum available commitment under such facility from time to time if REMA’s pro forma fixed charge coverage ratio does not equal or exceed 1.1 to 1.0, measured at the time rent under the leases is due. Subject to the maximum available commitment, drawings will be made in amounts necessary to permit REMA to achieve a pro forma fixed charge coverage ratio of at least 1.1 to 1.0. Payments under this indebtedness are subordinated to certain obligations, including the lease obligations, pursuant to the lease documents. The amount available under the subordinated working capital facility was $96 million on January 2, 2007 and decreases by $24 million each subsequent year through its expiration in 2011. As of December 31, 2009 and 2008, REMA had $26 million and $0, respectively, outstanding under this facility. The outstanding balance is classified as a current liability since REMA may pay the entire amount by December 31, 2010. As of December 31, 2009 and 2008, the amount available under the facility was $22 million and $72 million, respectively.

Letters of Credit.  RRI Energy has posted letters of credit on behalf of REMA related to its lease obligations. See notes 7 and 12(a).

Notes Payable to Affiliate.  In July 2009, REMA entered into a $16 million term loan payable to RRI Energy. The note is due July 1, 2029 and accrues interest, which is payable quarterly, at a variable rate based on the cost of funding the loan by RRI Energy. That rate was 1.98% as of December 31, 2009. Borrowings under the note are unsecured and rank equal in priority with REMA’s lease obligations. As of December 31, 2009 and 2008, REMA had $16 million and $0, respectively, outstanding under the note. The outstanding balance is classified as a current liability since REMA may pay the entire amount by December 31, 2010.

In January 2010, REMA entered into an additional $20 million term loan payable to RRI Energy. The note is due June 1, 2029 and accrues interest, which is payable quarterly, at a variable rate based on the cost of funding the loan by RRI Energy. That rate was 1.98% as of January 2010. Borrowings under the note are unsecured and rank equal in priority with REMA’s lease obligations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Cash Distributions to RRI Energy.

	2009		2008		2007
	(in millions)
REMA LLC cash distributions to RRI Energy	$	—	$	57	$	—

Income Taxes. See discussion in note 2(i) regarding REMA’s policy with regards to income taxes. As of December 31, 2009 and 2008, REMA has $1 million and $28 million, respectively, recorded as long-term taxes payable to RRI Energy, Inc., which includes accrued interest payable of $1 million and $1 million, respectively. REMA has incurred interest expense related to this payable of $0, $1 million and $0 during 2009, 2008 and 2007, respectively.

(4)   Review of Long-Lived Assets

REMA periodically evaluates the recoverability of its long-lived assets (property, plant and equipment and intangible assets), which involves significant judgment and estimates, when there are certain indicators (see below) that the carrying value of these assets may not be recoverable. As of December 31, 2009, REMA had $863 million of long-lived assets. See notes 2(g) and 5.

REMA evaluates its long-lived assets when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Examples of such events or changes in circumstances are:

•  a significant decrease in the market price of a long-lived asset

•  a significant adverse change in the manner an asset is being used or its physical condition

•  an adverse action by a regulator or legislature or an adverse change in the business climate

•  an accumulation of costs significantly in excess of the amount originally expected for the construction or acquisition of an asset

•  a current-period loss combined with a history of losses or the projections of future losses

•  a change in the intent about an asset from an intent to hold to a greater than 50% likelihood that an asset will be sold or disposed of before the end of its previously estimated useful life

When REMA believes an impairment condition may have occurred, REMA is required to estimate the undiscounted future cash flows associated with a long-lived asset or group of long-lived assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities for long-lived assets that are expected to be held and used. Each plant (including its property, plant and equipment and intangible assets) was determined to be its own group.

The determination of impairment is a two-step process, the first of which involves comparing the undiscounted cash flows to the carrying value of the asset. If the carrying value exceeds the undiscounted cash flows, the fair value of the asset must be determined. The fair value of an asset is the price that would be received from a sale of the asset in an orderly transaction between market participants at the measurement date. Quoted market prices in active markets are the best evidence of fair value and are used as the basis for the measurement, when available. In the absence of quoted prices for identical or similar assets, fair value is estimated using various internal and external valuation methods. These methods include discounted cash flow analyses and reviewing available information on comparable transactions.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Key Assumptions.  The following summarizes some of the most significant estimates and assumptions used in evaluating REMA’s plant level undiscounted cash flows. The ranges for the fundamental view assumptions are to account for variability by year and region.

	December 31, 2009
Undiscounted Cash Flow Scenarios Weightings:
5-year market forecast with escalation(1)(2)	50%
5-year market forecast with fundamental view(1)	50%
Range of Assumptions in Fundamental View:
Demand for power growth per year	1%-2%
After-tax rate of return on new construction(3)	8.0%-9.5%
Spread between natural gas and coal prices, $/MMBTU(4)	$3-$5

(1)	For each scenario, the first five years of cash flows are the same.
(2)	REMA assumed an annual 2.5% escalation percentage beyond year five.
(3)	The low to mid part of the range represents natural gas-fired plants’ required returns and the mid to high part of the range represents coal-fired and nuclear plants’ required returns.
(4)	Natural gas and coal prices are prior to transportation costs.

REMA estimates the undiscounted cash flows of its plants based on a number of subjective factors, including: (a) appropriate weighting of undiscounted cash flow scenarios, as shown in the table above, (b) forecasts of future power generation margins, (c) estimates of its future cost structure, (d) environmental assumptions, (e) time horizon of cash flow forecasts and (f) estimates of terminal values of plants, if necessary, from the eventual disposition of the assets.

Under the 5-year market forecast with escalation scenario, REMA uses the following data: (a) forward market curves for commodity prices as of December 18, 2009 for the first five years, (b) cash flow projections through the plant’s estimated remaining useful life and (c) escalation factor of cash flows of 2.5% per year after year five.

Under the 5-year market forecast with fundamental view scenario, REMA models all of its plants and those of others in the regions in which it operates, using these assumptions: (a) forward market curves for commodity prices as of December 18, 2009 for the first five years; (b) ranges shown in the table above used in developing the fundamental view beyond five years; (c) the markets in which REMA operates will continue to be deregulated and earn margins based on forward or projected market prices; (d) projected market prices for energy and capacity will be set by the forecasted available supply and level of forecasted demand — new supply will enter markets when market prices and associated returns, including any assumed subsidies for renewable energy, are sufficient to achieve minimum return requirements; (e) minimum return requirements on future construction of new generation facilities, as shown in the table above, will likely be driven or influenced by utilities, which REMA expects will have a lower cost of capital than merchant generators; (f) various ranges of environmental regulations, including those for SO₂, NO_x and greenhouse gas emissions; and (g) cash flow projections through the plant’s estimated remaining useful life.

Fair Value.  Generally, fair value will be determined using an income approach or a market-based approach. Under the income approach, the future cash flows are estimated as described above and then discounted using a risk-adjusted rate. Under a market-based approach, REMA may also consider prices of similar assets, consult with brokers or employ other valuation techniques.

Based on REMA’s analyses, it determined that no impairments occurred as each plant’s undiscounted cash flows exceeded its net book value for the long-lived assets.

Effect if Different Assumptions Used.  The estimates and assumptions used to determine whether long-lived assets are recoverable or whether impairment exists are subject to high degree of uncertainty. Different assumptions as to power prices, fuel costs, the future cost structure, environmental assumptions and remaining

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

useful lives and ultimate disposition values of the plants would result in estimated future cash flows that could be materially different than those considered in the recoverability assessments as of December 31, 2009 and could result in having to estimate the fair value of the plants.

(5)   Intangible Assets

(a)   Goodwill.

REMA tested goodwill for impairment on an annual basis in April (through 2008), and more often if events or circumstances indicated there may have been impairment. REMA continually assessed whether any indicators of impairment existed, which required a significant amount of judgment. Such indicators may have included a sustained significant decline in RRI Energy, Inc.’s share price and market capitalization; a decline in expected future cash flows; a significant adverse change in legal factors or in the business climate; unanticipated competition; overall weakness in the industry; and slower growth rates. Any adverse change in these factors could have had a significant impact on the recoverability of goodwill and could have had an impact on the consolidated financial statements.

During April 2008, REMA tested goodwill for impairment and determined that no impairment existed.

During the third and fourth quarters of 2008, given adverse changes in the business climate and the credit markets, RRI Energy, Inc.’s market capitalization being lower than its book value during all of the fourth quarter and extending into 2009, RRI Energy’s review of strategic alternatives to enhance stockholder value and reductions in the expected near-term cash flows from operations, REMA reviewed its goodwill for impairment. REMA concluded that no goodwill impairment occurred as of September 30, 2008. As of December 31, 2008, REMA concluded that its goodwill of $4 million was impaired.

(b)   Other Intangibles.

	Remaining
	Weighted			December 31,
	Average			2009						2008
	Amortization			Carrying			Accumulated			Carrying			Accumulated
	Period (Years)			Amount			Amortization			Amount			Amortization
				(in millions)
SO2 emission allowances(1)(2)		—	(1)	$	71	(3)	$	(7	)(3)	$	69	(4)	$	(5	)(4)
NOx emission allowances(1)(5)		—	(1)		35	(3)		(2	)(3)		35	(4)		—	(4)
Total				$	106		$	(9	)	$	104		$	(5	)

(1)	SO2 is sulfur dioxide and NOx is nitrogen oxides. Amortized to amortization expense on a units-of-production basis. As of December 31, 2009, REMA has recorded (a) SO2 emission allowances through the 2039 vintage year and (b) NOx emission allowances through the 2030 vintage year.
(2)	During 2009, 2008 and 2007, REMA purchased $35 million, $5 million and $48 million, respectively, of SO2emission allowances from affiliates.
(3)	During 2009, REMA wrote off fully amortized carrying amount and accumulated amortization of SO2 and NOx emission allowances surrendered of $33 million and $2 million, respectively.
(4)	During 2008, REMA wrote off fully amortized carrying amount and accumulated amortization of SO2 and NOx emission allowances surrendered of $188 million and $62 million, respectively.
(5)	During 2009, 2008 and 2007, REMA purchased $2 million, $7 million and $3 million, respectively, of NOxemission allowances from affiliates.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	2009		2008			2007
	(in millions)
Amortization of emission allowances	$	11	$	40	(1)	$	56
Total	$	11	$	40		$	56

(1) Of this amount, $28 million relates to expense and current liabilities for emission allowances used prior to ownership. These were purchased during the first quarter of 2009.

Estimated amortization expense based on REMA’s intangibles as of December 31, 2009 for the next five years is (in millions):

2010	$	4(1	)
2011		5(1	)
2012		5(1	)
2013		5(1	)
2014		5(1	)

(1) These amounts do not include estimated amortization expense of emission allowances not purchased as of December 31, 2009.

(6)   Derivatives and Hedging Activities

REMA uses derivative instruments to manage operational or market constraints and to increase return on its generation assets. See note 2(e).

As of December 31, 2009 and 2008, REMA does not have any designated cash flow hedges. Amounts included in accumulated other comprehensive loss are:

	December 31, 2009
				Expected to be
				Reclassified into
				Results of Operations
	At the End of the Period			in Next 12 Months
	(in millions)
De-designated cash flow hedges, net of tax(1)(2)	$	(33	)	$	14

(1)	No component of the derivatives’ gain or loss was excluded from the assessment of effectiveness.
(2)	During 2009, 2008 and 2007, $0 was recognized in REMA’s results of operations as a result of the discontinuance of cash flow hedges because it was probable that the forecasted transaction would not occur.

As of December 31, 2009, REMA’s commodity derivative assets and liabilities include amounts for non-trading as follows:

	Derivative Assets				Derivative Liabilities						Net Derivative
	Current		Long-Term		Current			Long-Term			Assets (Liabilities)
	(in millions)
Non-trading	$	32	$	8	$	(76	)	$	(65	)	$	(101	)
Total derivatives	$	32	$	8	$	(76	)	$	(65	)	$	(101	)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

REMA has the following derivative commodity contracts outstanding as of December 31, 2009:

		Notional Volumes
Commodity	Unit(1)	Current		Long-term
	(in millions)
Coal	MMBTU		23		22(2	)

(1)	MMBTU is million British thermal units.
(2)	For 2011, REMA has committed to purchase volumes of 22 million MMBTU (which are included in this table) for which the contract prices are subject to negotiation and agreement prior to the beginning of that year. No coal derivative contracts for the 2011 delivery period have been priced as of December 31, 2009. See note 12(c).

The income (loss) associated with REMA’s energy derivatives during 2009 is:

Derivatives not Designated as Hedging Instruments	Revenues			Cost of Sales
	(in millions)
Non-Trading Commodity Contracts:
Unrealized(2)	$	10		$	27
Realized(2)(3)(4)		(36	)		—
Total non-trading	$	(26	)	$	27

(1)	As discussed in note 2(e), during 2007, REMA de-designated its remaining cash flow hedges; the amount reflected here subsequent to that time relates to previously measured ineffectiveness reversing due to settlement of the derivative contracts.
(2)	Does not include realized gains or losses associated with cash month transactions, non-derivative transactions or derivative transactions that qualify for the normal purchase/normal sale exception.
(3)	Excludes settlement value of fuel contracts classified as inventory upon settlement.
(4)	Includes gains or losses from de-designated cash flow hedges reclassified from accumulated other comprehensive loss due to settlement of the derivative contracts. See note 2(e).

(7)   Debt

REMA is obligated to provide credit support for its lease obligations (see note 12(a)) in the form of letters of credit and/or cash equal to an amount representing the greater of (a) the next six months’ scheduled rental payments under the related lease or (b) 50% of the scheduled rental payments due in the next 12 months under the related lease. Credit support is provided in the form of letters of credit issued under RRI Energy’s credit facilities. As of December 31, 2009 and 2008, the amount of credit support was $26 million and $31 million, respectively.

See note 3 for debt transactions with affiliates.

(6)   Pension and Postretirement Benefits

Benefit Plans.  REMA sponsors a defined benefit pension plan. It provides subsidized postretirement benefits to some bargaining employees but generally does not provide them to non-bargaining employees.

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REMA’s benefit obligation and funded status are:

	Pension						Postretirement Benefits
	2009			2008			2009			2008
				(in millions)
Change in Benefit Obligation
Beginning of year	$	28		$	26		$	37		$	32
Service cost		2			2			1			1
Interest cost		1			1			2			2
Benefits paid		(1	)		(1	)		(1	)		(1	)
Actuarial (gain) loss		1			—			(7	)		3
End of year	$	31		$	28		$	32		$	37
Change in Plan Assets
Beginning of year	$	16		$	20		$	—		$	—
Employer contributions		5			2			1			—
Benefits paid		(1	)		(1	)		(1	)		—
Actual investment return		2			(5	)		—			—
End of year	$	22		$	16		$	—		$	—
Funded status	$	(9	)	$	(12	)	$	(32	)	$	(37	)

Amounts recognized in the consolidated balance sheets are:

	Pension						Postretirement Benefits
	December 31,						December 31,
	2009			2008			2009			2008
	(in millions)
Current liabilities	$	—		$	—		$	(2	)	$	(1	)
Noncurrent liabilities		(9	)		(12	)		(30	)		(36	)
Net amount recognized	$	(9	)	$	(12	)	$	(32	)	$	(37	)

The accumulated benefit obligation for the pension plan was $28 million and $25 million as of December 31, 2009 and 2008, respectively. The pension plan has an accumulated benefit obligation in excess of plan assets.

Net periodic benefit costs are:

	Pension									Postretirement Benefits
	2009			2008			2007			2009		2008		2007
							(in millions)
Service cost	$	2		$	2		$	3		$	1	$	1	$	1
Interest cost		1			1			1			2		2		1
Expected return on plan assets		(1	)		(1	)		(1	)		—		—		—
Net amortization		1			—			—			1		1		1
Net periodic benefit costs	$	3		$	2		$	3		$	4	$	4	$	3

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of December 31, 2009, $0.2 million and $0.5 million of net actuarial loss and net prior service costs, respectively, in accumulated other comprehensive loss are expected to be recognized in net periodic benefit cost during the next 12 months.

Assumptions.  The significant weighted average assumptions used to determine the benefit obligations are:

	Pension						Postretirement Benefits
	December 31,						December 31,
	2009			2008			2009			2008
	(in millions)
Discount rate		5.50	%		5.75	%		5.50	%		5.75	%
Rate of compensation increase		3.0	%		3.0	%		N/A			N/A

The significant weighted average assumptions used to determine the net periodic benefit costs are:

	Pension									Postretirement Benefits
	2009			2008			2007			2009			2008			2007
Discount rate		5.75	%		5.75	%		5.75	%		5.75	%		5.75	%		5.75	%
Rate of compensation increase		3.0	%		3.0	%		3.0	%		N/A			N/A			N/A
Expected long-term rate of return on plan assets		7.5	%		7.5	%		7.5	%		N/A			N/A			N/A

The expected long-term rate of return on assets is determined based on third party capital market asset models. Generally, a time horizon of greater than five years is assumed and, therefore, interim volatility in returns is regarded with the appropriate perspective. Models assume that future returns are based on long-term, historical performance as adjusted for any differences in expected inflation, current dividend yields, expected corporate earnings growth and risk premiums based on the expected volatility of each asset category. The adjusted historical returns are weighted by the long-term pension plan asset allocation targets. REMA’s investment manager and actuarial consultant assist with the analysis.

REMA’s assumed health care cost trend rates used to measure the expected cost of benefits covered by its postretirement plan are:

	2009			2008			2007
Health care cost trend rate assumed for next year(1)		8.0	%		7.9	%		8.3	%
Rate to which the cost trend rate is assumed to gradually decline (ultimate trend rate)(1)		5.5	%		5.5	%		5.5	%
Year that the rate reaches the ultimate trend rate		2015			2015			2015

(1) Represents blended rate for medical and prescription drug costs.

Assumed health care cost trend rates can have a significant effect on the amounts reported for REMA’s health care plan. A one-percentage-point change in assumed health care cost trend rates would have the following effects as of December 31, 2009:

	One-Percentage Point
	Increase		Decrease
	(in millions)
Effect on service and interest cost	$	—	$	—
Effect on accumulated postretirement benefit obligation		4		(3	)

Plan Assets.  RRI Energy’s Benefits Committee establishes the overall investment policy for the plan assets and appoints an investment manager to implement it. Plan assets are managed solely in the interest of the plan’s participants and their beneficiaries and are invested with the objective of earning the necessary

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

returns to meet the time horizons of the accumulated and projected retirement benefit obligations. Asset diversification across asset types, fund strategies, and fund managers is intended to manage risk to a reasonable and prudent level. The investment manager may use derivative securities for diversification, risk-control and return enhancement purposes but may not use them for the purpose of leverage.

REMA’s pension weighted average asset allocations and target allocation by asset category are:

	Percentage of Plan Assets
	as of December 31,						Target Allocation(1)
	2009			2008			2010
Domestic equity securities		35	%		41	%		35	%
International equity securities		25			17			25
Global equity securities		10			9			10
Debt securities		30			33			30
Total		100	%		100	%		100	%

(1) RRI Energy’s Benefits Committee has determined an allowable range for each category; these percentages represent the mid-point for each respective range.

In managing the investments associated with the pension plan, the objective is to exceed, on a net-of-fee basis, the rate of return of a performance benchmark composed of the following indices:

Asset Class	Index	Weight
Domestic equity securities	Dow Jones U.S. Total Stock Market Index		40	%
International equity securities	MSCI All Country World Ex-U.S. Index		20
Global equity securities	MSCI All Country World Index		10
Debt securities	Barclays Capital Aggregate Bond Index		30
			100	%

RRI Energy’s Benefits Committee reviews plan asset performance each quarter by comparing the actual quarterly returns of each asset class to its related benchmark.

Fair Value Measurements.  The fair value hierarchy establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value into three categories: quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2) and significant unobservable inputs (Level 3). See note 2(d) for further discussion about the three levels.

The plan assets are invested in open-end mutual funds. The shares of the mutual funds held by the plans are valued at quoted market prices in an active market (which are based on the redeemable net asset value of the fund) and are classified as Level 1. The asset allocations below are based on the nature of the underlying mutual fund assets.

F-91

RRI ENERGY MID-ATLANTIC POWER HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of December 31, 2009, the allocated pension plan’s investments measured at fair value are as follows:

	Level 1		Level 2		Level 3
	(in millions)
Domestic equity securities(1)	$	8	$	—	$	—
International equity securities(2)		6		—		—
Global equity securities(3)		2		—		—
Debt securities(4)		6		—		—
Total	$	22	$	—	$	—

(1)	Comprised of large cap stocks.
(2)	Comprised of large cap foreign stocks.
(3)	Comprised of both foreign and domestic multi-cap stocks.
(4)	Comprised of intermediate-term, investment grade bonds.

Cash Obligations.  REMA expects pension cash contributions to approximate $1 million during 2010. Expected benefit payments for the next ten years, which reflect future service as appropriate, are:

			Postretirement
	Pension		Benefits
	(in millions)
2010	$	1	$	1
2011		1		2
2012		1		2
2013		1		2
2014		2		2
2015-2019		13		14

(9)   Savings Plan

REMA’s employees participate in RRI Energy’s employee savings plans under Sections 401(a) and 401(k) of the Internal Revenue Code. REMA’s savings plan benefit expense, including matching and discretionary contributions, was $3 million during 2009, 2008 and 2007.

(10)   Collective Bargaining Agreements

As of December 31, 2009, approximately 75% of REMA’s employees are subject to collective bargaining agreements. Approximately 55% of REMA’s employees are subject to collective bargaining agreements that will expire in 2010. REMA intends to negotiate the renewal of these agreements.

F-92

RRI ENERGY MID-ATLANTIC POWER HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(11)   Income Taxes

(a)   Summary.

REMA’s income tax expense (benefit) is:

	2009			2008			2007
	(in millions)
Current:
Federal	$	(27	)	$	27		$	—
State		2			18			1
Total current		(25	)		45			1
Deferred:
Federal		(23	)		23			1
State		(7	)		(9	)		3
Total deferred		(30	)		14			4
Income tax expense (benefit)	$	(55	)	$	59		$	5

A reconciliation of the federal statutory income tax rate to the effective income tax rate is:

	2009			2008			2007
Federal statutory rate		(35	)%		35	%		35	%
Additions (reductions) resulting from:
State income taxes, net of federal income taxes		(4	)		4			29
Other, net		—			2			(1	)
Effective rate		(39	)%		41	%		63	%

F-93

RRI ENERGY MID-ATLANTIC POWER HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	December 31,
	2009		2008
	(in millions)
Deferred tax assets:
Current:
Derivative liabilities, net	$	18	$	29
Employee benefits		1		1
Total current deferred tax assets		19		30
Long-term:
Employee benefits		19		23
Net operating loss carryforwards		62		15
Environmental reserves		7		6
Derivative liabilities, net		23		39
Other		27		22
Total long-term deferred tax assets		138		105
Total deferred tax assets	$	157	$	135
Deferred tax liabilities:
Long-term:
Depreciation and amortization	$	108	$	101
Total long-term deferred tax liabilities		108		101
Total deferred tax liabilities	$	108	$	101
Accumulated deferred income taxes, net	$	49	$	34

(b)   Tax Attribute Carryovers.

			Statutory
	December 31,		Carryforward	Expiration
	2009		Period	Year(s)
	(in millions)		(in years)
Net operating loss carryforwards:
Federal	$	99	20	2029
State		414	7 to 20	2016 through 2029

(c)   Valuation Allowances.

REMA assesses its future ability to use federal and state net operating loss carryforwards and other deferred tax assets using the more-likely-than-not criteria. These assessments include an evaluation of REMA’s recent history of earnings and losses, future reversals of temporary differences and identification of other sources of future taxable income, including the identification of tax planning strategies in certain situations.

REMA has no valuation allowances as of December 31, 2009 or 2008.

(d)   Income Tax Uncertainties.

REMA may only recognize the tax benefit for financial reporting purposes from an uncertain tax position when it is more-likely-than-not that, based on the technical merits, the position will be sustained by taxing

F-94

RRI ENERGY MID-ATLANTIC POWER HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

authorities or courts. The recognized tax benefits are measured as the largest benefit having a greater than fifty percent likelihood of being realized upon settlement with a taxing authority. REMA classifies accrued interest and penalties related to uncertain income tax positions in income tax expense/benefit. Adoption of an interpretation of accounting for income tax uncertainties in 2007 had no impact on REMA’s consolidated financial statements.

During 2009 and 2007, REMA’s unrecognized federal and sate tax benefits changed insignificantly. REMA’s unrecognized federal and state tax benefits changed as follows during 2008 (in millions):

	2008
Balance, beginning of period	$	—
Increases related to prior years		8
Decreases related to prior years		(8	)
Increases related to current year		—
Settlements		—
Lapses in the statute of limitations		—
Balance, end of period	$	—

As of December 31, 2008 and 2009, REMA had no amounts accrued for interest or penalties. During 2009, 2008 and 2007, REMA recognized $0 of income tax expense (benefit) due to changes in interest and penalties for federal and state income taxes.

REMA has the following years that remain subject to examination or are currently under audit for its major tax jurisdictions:

	Subject to		Currently Under
	Examination		Audit
Federal		2002 to 2009		2002 to 2008
New Jersey		2002 to 2009		2002 to 2005
Pennsylvania		2005 to 2009		2005 to 2006

REMA, through RRI Energy, expects to continue discussions with taxing authorities regarding tax positions related to the timing of tax deductions for depreciation and emission allowances and believes it is reasonably possible some of these matters could be resolved during 2010; however, REMA cannot estimate the range of changes that might occur.

(12)   Commitments

(a)   Lease Commitments.

REMA entered into sale-leaseback transactions, under operating leases that are non-recourse to RRI Energy. REMA leases 16.45% and 16.67% interests in the Conemaugh and Keystone facilities, respectively. The leases expire in 2034 and REMA expects to make payments through 2029. REMA also leases a 100% interest in the Shawville facility. This lease expires in 2026 and REMA expects to make payments through that date. At the expiration of these leases, there are several renewal options related to fair market value. REMA LLC’s subsidiaries guarantee the lease obligations and REMA LLC has pledged the equity interests in these subsidiaries as collateral. RRI Energy also provides credit support for these lease obligations in the form of letters of credit. See note 7. During 2009, 2008 and 2007, REMA made lease payments under these leases of $63 million, $62 million and $65 million, respectively. As of December 31, 2009 and 2008, REMA has recorded a prepaid lease of $59 million in current assets and $277 million and $273 million, respectively, in long-term assets. REMA operates the Conemaugh and Keystone facilities under agreements that could

F-95

RRI ENERGY MID-ATLANTIC POWER HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

terminate annually with one year’s notice and received fees of $9 million, $9 million and $10 million during 2009, 2008 and 2007, respectively. These fees, which are recorded in operation and maintenance expense, are primarily to cover REMA’s administrative support costs of providing these services.

REMA’s lease documents restrict its ability to, among other actions, (a) encumber assets, (b) enter into business combinations or divest assets, (c) incur additional debt, (d) pay dividends or subordinated obligations, (e) enter into some transactions with affiliates or (f) materially change its business. As of December 31, 2009, REMA was limited by the covenant restricting dividends and the payment of subordinated obligations.

Cash Obligations Under Operating Leases.  REMA’s projected cash obligations under non-cancelable long-term operating leases as of December 31, 2009 are (in millions):

2010	$	52
2011		63
2012		56
2013		64
2014		64
2015 and thereafter		635
Total	$	934

Operating Lease Expense.  Operating lease expense, including the amortization of deferred lease costs, was $60 million during 2009, 2008 and 2007.

(b)   Guarantees and Indemnifications.

Equity Pledged as Collateral for RRI Energy.  REMA LLC’s equity is pledged as collateral under certain of RRI Energy’s credit and debt agreements, which have an outstanding balance of $650 million as of December 31, 2009 and mature in 2012, 2014 and 2036.

Other.  REMA enters into contracts that include indemnification and guarantee provisions. In general, REMA enters into contracts with indemnities for matters such as breaches of representations and warranties and covenants contained in the contract and/or against certain specified liabilities. Examples of these contracts include asset purchase and sales agreements, service agreements and procurement agreements.

Except as otherwise noted, REMA is unable to estimate its maximum potential exposure under these agreements until an event triggering payment occurs. REMA does not expect to make any material payments under these agreements.

(c)   Other Commitments.

Property, Plant and Equipment Commitments.  As of December 31, 2009, REMA has contractual commitments to spend approximately $15 million on plant and equipment relating primarily to maintenance requirements.

Fuel Supply Commitments.  REMA is a party to fuel supply contracts of various quantities and durations that are not classified as derivative assets and liabilities. These contracts are not included in the consolidated

F-96

RRI ENERGY MID-ATLANTIC POWER HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

balance sheet as of December 31, 2009. Minimum purchase commitment obligations under these agreements are as follows as of December 31, 2009:

	Fixed Pricing(1)
	(in millions)
2010	$	174
2011(2)		62
2012		12
2013		—
2014		—
2015 and thereafter		—
Total	$	248

(1)	As of December 31, 2009, the maximum remaining term under any individual fuel supply contract is three years.
(2)	REMA has committed to purchase volumes of 22 million MMBTU under some coal contracts for which the contract prices are subject to negotiation and agreement prior to the beginning of that year and thus the amounts are not included in this table.

Other Commitments.  As of December 31, 2009, REMA has other fixed commitments related to various agreements that aggregate as follows (in millions):

2010	$	28
2011		—
2012		—
2013		—
2014		—
2015 and thereafter		—
Total	$	28

(13)  Contingencies

REMA is involved in some legal, environmental and governmental proceedings, some of which may involve substantial amounts. Unless otherwise noted, REMA cannot predict the outcome of the matters described below.

New Source Review Matters.  The United States Environmental Protection Agency (EPA) and various states are investigating compliance of coal-fueled electric generating plants with the pre-construction permitting requirements of the Clean Air Act known as “New Source Review.” In 2000 and 2001, REMA responded to the EPA’s information requests related to five of its plants, and in December 2007, REMA received supplemental requests for two of those plants. The EPA agreed to share information relating to its investigations with state environmental agencies. In January 2009, REMA received a Notice of Violation (NOV) from the EPA alleging that past work at its Shawville, Portland and Keystone generation facilities violated the agency’s regulations regarding New Source Review.

In December 2007, the New Jersey Department of Environmental Protection (NJDEP) filed suit against REMA in the United States District Court in Pennsylvania, alleging that New Source Review violations occurred at one of its power plants located in Pennsylvania. The suit seeks installation of “best available” control technologies for each pollutant, to enjoin REMA from operating the plant if it is not in compliance

F-97

RRI ENERGY MID-ATLANTIC POWER HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

with the Clean Air Act and civil penalties. The suit also names three past owners of the plant as defendants. In March 2009, the Connecticut Department of Environmental Protection became an intervening party to the suit.

REMA believes that the projects listed by the EPA and the projects subject to the NJDEP’s suit were conducted in compliance with applicable regulations. However, any final finding that REMA violated the New Source Review requirements could result in significant capital expenditures associated with the implementation of emissions reductions on an accelerated basis and possible penalties. Most of these work projects were undertaken before REMA’s ownership of those facilities. REMA believes it is indemnified by or has the right to seek indemnification from the prior owners for certain losses and expenses that REMA may incur from activities occurring prior to its ownership.

Ash Disposal Landfill Closures.  REMA is responsible for environmental costs related to the future closures of five ash disposal landfills. REMA recorded the estimated discounted costs ($8 million and $6 million as of December 31, 2009 and 2008, respectively) associated with these environmental liabilities as part of its asset retirement obligations. See note 2(o).

Remediation Obligations.  REMA is responsible for environmental costs related to site contamination investigations and remediation requirements at four power plants in New Jersey. REMA recorded the estimated long-term liability for the remediation costs of $8 million as of December 31, 2009 and 2008.

Conemaugh Actions.  In April 2007, PennEnvironment and the Sierra Club filed a citizens’ suit against REMA in the United States District Court, Western District of Pennsylvania, to enforce provisions of the water discharge permit for the Conemaugh plant, of which REMA is the operator and has a 16.45% interest. PennEnvironment and the Sierra Club seek civil penalties, remediation and an injunction against further violations. REMA is confident that the Conemaugh plant has operated and will continue to operate in material compliance with its water discharge permit, its consent order agreement with the Pennsylvania Department of Environmental Protection, and related state and federal laws. In December 2009, the District Court ordered that the case be dismissed. PennEnvironment and the Sierra Club have requested that the court reconsider its ruling. If PennEnvironment and the Sierra Club are ultimately successful, REMA could incur additional capital expenditures associated with the implementation of discharge reductions and penalties, which REMA does not believe would be material.

F-98

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholder

Orion Power Holdings, Inc.:

We have audited the accompanying consolidated balance sheets of Orion Power Holdings, Inc. and subsidiaries (the Company) as of December 31, 2009 and 2008, and the related consolidated statements of operations, stockholder’s equity and comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2009. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Orion Power Holdings, Inc. and subsidiaries as of December 31, 2009 and 2008, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2009, in conformity with U.S. generally accepted accounting principles.

KPMG LLP

Houston, Texas

February 24, 2010

F-99

ORION POWER HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	2009			2008			2007
	(thousands of dollars)
Revenues:
Revenues	$	9,122		$	14,615		$	22,317
Revenues—affiliates		302,636			570,863			542,568
Total		311,758			585,478			564,885
Expenses:
Cost of sales		275,751			247,817			227,240
Cost of sales—affiliates		1,937			(3,467	)		(5,521	)
Operation and maintenance		104,957			132,277			161,713
Operation and maintenance—affiliates		26,958			32,787			37,696
Taxes other than income taxes		8,021			10,587			11,570
General and administrative—primarily affiliates		23,000			24,626			27,685
Gains on sales of assets and emission allowances, net—primarily affiliate		(2,654	)		(617	)		(7,480	)
Goodwill and long-lived assets impairments		120,053			173,570			—
Depreciation and amortization		89,001			104,261			137,602
Total operating expenses		647,024			721,841			590,505
Operating Income (Loss)		(335,266	)		(136,363	)		(25,620	)
Other Income (Expense):
Other, net		7			4,488			—
Interest expense		(19,375	)		(23,284	)		(34,314	)
Interest expense—affiliates		(4,357	)		(5,987	)		(9,293	)
Interest income—primarily affiliates		1,058			5,514			8,452
Total other expense		(22,667	)		(19,269	)		(35,155	)
Loss from Continuing Operations Before Income Taxes		(357,933	)		(155,632	)		(60,775	)
Income tax benefit		(120,973	)		(26,323	)		(25,737	)
Loss from Continuing Operations		(236,960	)		(129,309	)		(35,038	)
Income (loss) from discontinued operations		2,644			(1,480	)		7,124
Net Loss	$	(234,316	)	$	(130,789	)	$	(27,914	)

See Notes to the Consolidated Financial Statements

F-100

ORION POWER HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31,
	2009			2008
	(thousands of dollars, except per share amounts)
ASSETS
Current Assets:
Cash and cash equivalents	$	5,031		$	2
Accounts receivable, principally customer		511			21,971
Receivables from affiliates, net		27,239			45,383
Inventory		84,223			73,564
Accumulated deferred income taxes		6,037			32,830
Collateral posted under agreement with RRI Energy, Inc.		14,392			—
Prepayments and other current assets		4,152			1,687
Current assets of discontinued operations		—			29,670
Total current assets		141,585			205,107
Property, Plant and Equipment, net		1,606,235			1,720,944
Other Assets:
Other intangibles, net		159,533			164,950
Long-term note receivable from RRI Energy, Inc.		—			53,981
Long-term collateral posted under agreement with RRI Energy, Inc.		—			14,392
Other		3,046			8,365
Total other assets		162,579			241,688
Total Assets	$	1,910,399		$	2,167,739
LIABILITIES AND STOCKHOLDER’S EQUITY
Current Liabilities:
Current portion of long-term debt	$	404,403		$	12,531
Accounts payable, principally trade		37,915			47,860
Accrued interest payable		7,996			7,996
Other taxes payable		10,758			13,276
Derivatives liabilities		7,679			69,468
Revolving credit facility with RRI Energy, Inc.		294,796			—
Other		7,845			16,512
Current liabilities of discontinued operations		1,283			4,486
Total current liabilities		772,675			172,129
Other Liabilities:
Accumulated deferred income taxes		70,888			139,218
Benefit obligations		51,869			62,377
Taxes payable to RRI Energy, Inc. and related accrued interest		11,952			87,408
Other		13,160			9,972
Long-term liabilities of discontinued operations		3,542			3,542
Total other liabilities		151,411			302,517
Revolving Credit Facility with RRI Energy, Inc.		—			74,471
Long-term Debt		—			404,403
Commitments and Contingencies
Stockholder’s Equity:
Common stock; par value $1.00 per share (1,000 shares authorized, issued and outstanding)		1			1
Additional paid-in capital		2,211,139			2,211,139
Accumulated deficit		(1,216,712	)		(982,396	)
Accumulated other comprehensive loss		(8,115	)		(14,525	)
Total stockholder’s equity		986,313			1,214,219
Total Liabilities and Stockholder’s Equity	$	1,910,399		$	2,167,739

See Notes to the Consolidated Financial Statements

F-101

ORION POWER HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	2009			2008			2007
	(thousands of dollars)
Cash Flows from Operating Activities:
Net loss	$	(234,316	)	$	(130,789	)	$	(27,914	)
(Income) loss from discontinued operations		(2,644	)		1,480			(7,124	)
Net loss from continuing operations		(236,960	)		(129,309	)		(35,038	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Goodwill and long-lived assets impairments		120,053			173,570			—
Depreciation and amortization		89,001			104,261			137,602
Deferred income taxes		(42,414	)		(47,522	)		(21,422	)
Net changes in energy derivatives		(61,789	)		69,468			1,108
Amortization of revaluation of acquired debt		(12,530	)		(11,409	)		(10,505	)
Gains on sales of assets and emission allowances, net—primarily affiliate		(2,654	)		(617	)		(7,480	)
Other, net		(203	)		(1,985	)		64
Changes in other assets and liabilities:
Accounts receivable, net		21,460			(21,869	)		1,562
Inventory		(10,660	)		(16,331	)		(7,384	)
Other current assets		(28	)		389			(539	)
Other assets		(768	)		380			4,867
Accounts payable		(3,802	)		7,780			(27	)
Payable to/receivable from affiliates, net		13,480			(5,764	)		(14,840	)
Collateral returned (posted) under agreement with RRI Energy, Inc.		—			2,000			(788	)
Income taxes payable/receivable		(2,675	)		18,633			22,938
Long-term taxes payable to RRI Energy, Inc. and related accrued interest		(75,456	)		22,132			(18,015	)
Other current liabilities		(3,067	)		820			187
Other liabilities		(3,450	)		3,281			(3,680	)
Net cash provided by (used in) continuing operations from operating activities		(212,462	)		167,908			48,610
Net cash provided by (used in) discontinued operations from operating activities		30,771			(56	)		6,726
Net cash provided by (used in) operating activities		(181,691	)		167,852			55,336
Cash Flows from Investing Activities:
Capital expenditures		(83,834	)		(174,287	)		(109,212	)
Proceeds from sales of emission allowances—affiliates		4,531			164			12,678
Purchases of emission allowances—affiliates		(8,358	)		(44,892	)		(9,643	)
Other, net		75			515			883
Net cash used in continuing operations from investing activities		(87,586	)		(218,500	)		(105,294	)
Net cash provided by discontinued operations from investing activities		—			—			520
Net cash used in investing activities		(87,586	)		(218,500	)		(104,774	)
Cash Flows from Financing Activities:
Changes in revolving credit facility with RRI Energy, Inc., net		220,325			37,172			24,616
Repayments from RRI Energy, Inc. under term loan		53,981			13,219			25,000
Net cash provided by financing activities		274,306			50,391			49,616
Net Change in Cash and Cash Equivalents		5,029			(257	)		178
Cash and Cash Equivalents at Beginning of Period		2			259			81
Cash and Cash Equivalents at End of Period	$	5,031		$	2		$	259
Supplemental Disclosure of Cash Flow Information:
Cash Payments:
Interest paid (net of amounts capitalized) to third parties for continuing operations	$	31,778		$	34,688		$	44,756
Income taxes paid (net of income tax refunds received) for continuing operations		758			(15,663	)		(2,858	)

See Notes to the Consolidated Financial Statements

F-102

ORION POWER HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY AND COMPREHENSIVE INCOME (LOSS)

										Accumulated Other Comprehensive Income (Loss)												Discontinued
													Benefits			Benefits			Total			Operations
										Deferred			Actuarial			Net			Accumulated			Accumulated
					Additional					Derivative			Net			Prior			Other			Other		Total			Comprehensive
	Common Stock				Paid-In		Accumulated			Gains			Gain			Service			Comprehensive			Comprehensive		Stockholder’s			Income
	Shares		Amount		Capital		Deficit			(Losses)			(Loss)			Costs			Income (Loss)			Loss		Equity			(Loss)
																(thousands of dollars)
Balance, December 31, 2006		1,000	$	1	$	2,211,139	$	(823,693	)	$	2,711		$	(5,566	)	$	(3,379	)	$	(6,234	)	$	—	$	1,381,213
Net loss								(27,914	)																(27,914	)	$	(27,914	)
Deferred gain from cash flow hedges, net of tax of $0											330									330					330			330
Reclassification of net deferred gain from cash flow hedges into net loss, net of tax of $2 million											(3,041	)								(3,041	)				(3,041	)		(3,041	)
Reclassification of benefits net prior service costs into net loss, net of tax of $0																	401			401					401			401
Reclassification of benefits actuarial net loss into net loss, net of tax of $0														170						170					170			170
Deferred benefits, net of tax of $1 million and $1 million														1,100			642			1,742					1,742			1,742
Comprehensive loss																											$	(28,312	)
Balance, December 31, 2007		1,000	$	1	$	2,211,139	$	(851,607	)	$	—		$	(4,296	)	$	(2,336	)	$	(6,632	)	$	—	$	1,352,901
Net loss								(130,789	)																(130,789	)	$	(130,789	)
Reclassification of benefits net prior service costs into net loss, net of tax of $0																	397			397					397			397
Reclassification of benefits actuarial net loss into net loss, net of tax of $0														90						90					90			90
Deferred benefits, net of tax of $4 million and $1 million														(7,346	)		(1,034	)		(8,380	)				(8,380	)		(8,380	)
Comprehensive loss																											$	(138,682	)
Balance, December 31, 2008		1,000	$	1	$	2,211,139	$	(982,396	)	$	—		$	(11,552	)	$	(2,973	)	$	(14,525	)	$	—	$	1,214,219
Net loss								(234,316	)																(234,316	)	$	(234,316	)
Reclassification of benefits net prior service costs into net loss, net of tax of $2 million																	3,357			3,357					3,357			3,357
Reclassification of benefits actuarial net loss into net loss, net of tax of $1 million														1,275						1,275					1,275			1,275
Deferred benefits, net of tax of $1 million and $0														1,489			289			1,778					1,778			1,778
Comprehensive loss																											$	(227,906	)
Balance, December 31, 2009		1,000	$	1	$	2,211,139	$	(1,216,712	)	$	—		$	(8,788	)	$	673		$	(8,115	)	$	—	$	986,313

See Notes to the Consolidated Financial Statements

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ORION POWER HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)   Background and Basis of Presentation

Background.  “Orion Power Holdings” refers to Orion Power Holdings, Inc., a Delaware corporation. “Orion Power” refers to Orion Power Holdings and its consolidated subsidiaries. “RRI Energy” refers to RRI Energy, Inc. and its consolidated subsidiaries. On February 19, 2002, RRI Energy acquired Orion Power through a merger.

Orion Power provides energy, capacity, ancillary and other energy services to wholesale customers in competitive energy markets in the United States through its ownership and operation of and contracting for power generation capacity. The majority of its sales to third parties are through RRI Energy (affiliates). Orion Power owns six electric power plants in Ohio and Pennsylvania with an aggregate net generating capacity of 2,649 megawatts (MW) as of December 31, 2009.

Name Change of Reliant Energy.  Reliant Energy, Inc. changed its name to RRI Energy, Inc. effective May 2, 2009 in connection with the sale of its Texas retail business.

Basis of Presentation.  These consolidated statements include all revenues and costs directly attributable to Orion Power including costs for facilities and costs for functions and services performed by RRI Energy and charged to Orion Power. All significant intercompany transactions have been eliminated.

(2)   Summary of Significant Accounting Policies

(a)   Use of Estimates and Market Risk and Uncertainties.

Management makes estimates and assumptions to prepare financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) that affect:

•  the reported amounts of assets, liabilities and equity

•  the reported amounts of revenues and expenses

•  disclosure of contingent assets and liabilities at the date of the financial statements

Actual results could differ from those estimates.

Orion Power evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which Orion Power believes to be reasonable under the circumstances. Orion Power adjusts such estimates and assumptions when facts and circumstances dictate. Orion Power has evaluated subsequent events for recording and disclosure to February 25, 2010, the date the financial statements were issued.

Orion Power’s critical accounting estimates include: (a) fair value of derivative assets and liabilities; (b) recoverability and fair value of long-lived assets; (c) loss contingencies and (d) deferred tax assets, valuation allowances and tax liabilities.

Orion Power is subject to various risks inherent in doing business. See notes 2(c), 2(d), 2(e), 2(f), 2(g), 2(h), 2(m), 2(n), 2(o), 2(p), 3, 4, 5, 6, 7, 8, 10, 11, 12 and 13.

(b)   Principles of Consolidation.

Orion Power Holdings includes its accounts and those of its wholly-owned subsidiaries in the consolidated financial statements.

(c)   Revenues.

Power Generation Revenues.  Orion Power records gross revenues from the sales of power and other energy services under the accrual method. Electric power and other energy services are sold at market-based prices through related party affiliates, existing power exchanges or third party contracts. Energy sales and services that have been

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

delivered but not billed by period end are estimated. During 2009, 2008 and 2007, Orion Power recorded $254 million, $534 million and $543 million, respectively, in power generation revenues.

Capacity Revenues.  Orion Power records gross revenues from the sales of capacity under the accrual method. These sales are sold at market-based prices primarily through the RPM auction market in PJM. Orion Power also sells in the Midwest Independent Transmission System Operator (MISO) market where it enters into agreements with counterparties. The majority of sales are through affiliates. Sales that have been delivered but not billed by period end are estimated. During 2009, 2008 and 2007, Orion Power recorded $58 million, $51 million and $22 million, respectively, in capacity revenues.

(d)   Fair Value Measurements.

Fair Value Hierarchy and Valuation Techniques.  Orion Power applies recurring fair value measurements to its financial assets and liabilities. In determining fair value, Orion Power generally uses a market approach and incorporates assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation techniques. These inputs can be readily observable, market corroborated, or generally unobservable internally-developed inputs. Based on the observability of the inputs used in the valuation techniques, the financial assets and liabilities are classified as follows:

Level 1:	Level 1 represents unadjusted quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date. Orion Power’s cash equivalents are also valued using Level 1 inputs.
Level 2:	Level 2 represents quoted market prices for similar assets or liabilities in active markets, quoted market prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data.
Level 3:	This category includes energy derivative instruments whose fair value is estimated based on prices in inactive markets that are not observable. Orion Power’s over-the-counter (OTC) derivative instruments that are transacted in less liquid markets with limited pricing information are included in Level 3, which are coal contracts.

See note 4 for discussion of fair value measurements for some non-financial assets.

Fair Value of Derivative Instruments and Certain Other Assets.  Orion Power applies recurring fair value measurements to its financial assets and liabilities. Fair value measurements of its financial assets and liabilities are as follows:

	December 31, 2009
							Total
	Level 1		Level 2		Level 3		Fair Value
			(in millions)
Total derivative assets	$	—	$	—	$	—	$	—
Total derivative liabilities		—		—		8		8
Cash equivalents(1)		5		—		—		5

(1) Represent investments in money market funds and are included in cash and cash equivalents in Orion Power’s consolidated balance sheet.

	December 31, 2008
							Total
	Level 1		Level 2		Level 3		Fair Value
			(in millions)
Total derivative assets	$	—	$	—	$	—	$	—
Total derivative liabilities		—		—		69		69

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following is a reconciliation of changes in fair value of net derivative assets and liabilities classified as Level 3:

	Net Derivatives
	(Level 3)
	2009			2008
	(in millions)
Balance, beginning of period (net asset (liability))	$	(69	)	$	—
Total gains (losses) realized/unrealized:
Included in earnings(1)		(33	)		—
Purchases, issuances and settlements (net)		94			(69	)
Transfers in and/or out of Level 3 (net)		—			—
Balance, end of period (net asset (liability))	$	(8	)	$	(69	)
Changes in unrealized gains (losses) relating to derivative assets and liabilities still held as of December 31, 2009 and 2008(1)		(8	)		—

(1) Recorded in cost of sales.

Fair Value of Other Financial Instruments.  The fair values of cash and accounts receivable and payable approximate their carrying amounts. Values of Orion Power’s third-party debt (see note 7) are:

	December 31,
	2009				2008
	Carrying				Carrying
	Value		Fair Value(1)		Value		Fair Value(1)
			(in millions)
Fixed rate debt	$	405	$	403	$	417	$	397
Total debt	$	405	$	403	$	417	$	397

(1) Orion Power based the fair value of its fixed rate debt on market prices and quotes from an investment bank.

See notes 2(e) and 6.

(e)   Derivatives and Hedging Activities.

Changes in commodity prices prior to the energy delivery period are inherent in Orion Power’s business. Accordingly, Orion Power may enter selective hedges to (a) seek potential value greater than what is available in the spot or day-ahead markets, (b) address operational requirements or (c) seek a specific financial objective. For its risk management activities, Orion Power uses derivative and non-derivative contracts that provide for settlement in cash or by delivery of a commodity. Orion Power uses derivative instruments such as forwards and options to execute its hedge strategy.

Orion Power accounts for its derivatives under one of three accounting methods (mark-to-market, accrual (under the normal purchase/normal sale exception to fair value accounting) or cash flow hedge accounting) based on facts and circumstances. See note 2(d) for discussion on fair value measurements.

A derivative is recognized at fair value in the balance sheet whether or not it is designated as an accounting hedge, except for derivative contracts designated as normal purchase/normal sale exceptions, which are not in the consolidated balance sheet or results of operations prior to settlement resulting in accrual accounting treatment.

Realized gains and losses on derivative contracts used for risk management purposes and not held for trading purposes are reported either on a net or gross basis based on the relevant facts and circumstances. Hedging transactions that do not physically flow are included in the same caption as the items being hedged.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A summary of Orion Power’s derivative activities and classification in its results of operations is:

			Transactions that
	Primary Risk	Purpose for Holding or	Physically	Transactions that
Instrument	Exposure	Issuing Instrument(1)	Flow/Settle(2)	Financially Settle(3)
Coal forward and option contracts	Price risk	Coal purchases/sales related to operations	Cost of sales	Cost of sales

(1)	The purpose for holding or issuing does not impact the accounting method elected for each instrument.
(2)	Includes classification of unrealized gains and losses for derivative transactions reclassified to inventory upon settlement.
(3)	Includes classification for mark-to-market derivatives and amounts reclassified from accumulated other comprehensive income (loss) related to cash flow hedges.

In addition to price risk, Orion Power is exposed to credit and operational risk. RRI Energy has a risk control framework, to which Orion Power is subject, to manage these risks, which include: (a) measuring and monitoring these risks, (b) review and approval of new transactions relative to these risks, (c) transaction validation and (d) portfolio valuation and reporting. Orion Power uses mark-to-market valuation, value-at-risk and other metrics in monitoring and measuring risk. RRI Energy’s risk control framework includes a variety of separate but complementary processes, which involve commercial and senior management and RRI Energy’s Board of Directors. See note 2(f) for further discussion of Orion Power’s credit policy.

Earnings Volatility from Derivative Instruments.  Orion Power may experience volatility in its earnings resulting from contracts receiving accrual accounting treatment while related derivative instruments are marked to market through earnings. As discussed in note 2(a), Orion Power’s financial statements include estimates and assumptions made by management throughout the reporting periods and as of the balance sheet dates. It is reasonable that subsequent to the balance sheet date of December 31, 2009, changes, some of which could be significant, have occurred in the inputs to various fair value measures, particularly relating to commodity price movements.

Unrealized gains and losses on energy derivatives consist of both gains and losses on energy derivatives during the current reporting period for derivative assets or liabilities that have not settled as of the balance sheet date and the reversal of unrealized gains and losses from prior periods for derivative assets or liabilities that settled prior to the balance sheet date during the current reporting period.

Cash Flow Hedges.  During 2006, Orion Power de-designated its remaining cash flow hedges; therefore, as of December 31, 2009 and 2008, Orion Power does not have any designated cash flow hedges and there are no deferred derivative gains or losses remaining in accumulated other comprehensive loss.

Presentation of Derivative Assets and Liabilities.  Orion Power presents its derivative assets and liabilities on a gross basis (regardless of master netting arrangements with the same counterparty). Cash collateral amounts are also presented on a gross basis.

(f)   Credit Risk.

Orion Power has a credit policy that governs the management of credit risk, including the establishment of counterparty credit limits and specific transaction approvals. Credit risk is monitored daily and the financial condition of counterparties is reviewed periodically. Orion Power tries to mitigate credit risk by entering into contracts that permit netting and allow it to terminate upon the occurrence of certain events of default. Orion Power measures credit risk as the replacement cost for its derivative positions plus amounts owed for settled transactions.

Orion Power’s credit exposure is based on its derivative assets and accounts receivable from counterparties, after taking into consideration netting within each contract and any master netting contracts with counterparties.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Orion Power believes this represents the maximum potential loss it could incur if its counterparties failed to perform according to their contract terms.

As of December 31, 2009, Orion Power has no credit exposure. As of December 31, 2008, two non-investment grade counterparties (a coal producer and an electricity generator) and two investment grade counterparties (energy merchants) represented 45% ($7 million) and 50% ($8 million), respectively, of its credit exposure. As of December 31, 2008, Orion Power held no collateral from these counterparties.

Orion Power’s credit availability is based on RRI Energy’s credit ratings. Based on RRI Energy’s current credit ratings, any additional collateral postings that would be required from Orion Power due to a credit downgrade would be immaterial. As of December 31, 2009 and 2008, Orion Power has posted cash margin deposits of $0 as collateral for its derivative liabilities receiving mark-to-market accounting treatment and its accounts payable.

(g)   Customer Concentration.

Accounts receivable from third party customers as of December 31, 2009 was insignificant. The following table represents accounts receivable balances from third party customers in excess of 10% of the total consolidated accounts receivable balance and the related percentages as of December 31, 2008 (in millions, except percentages):

	December 31,
	2008
	Accounts		Percentage of Total
	Receivable		Accounts
Customer	Balance		Receivable
AEP Service Corporation	$	5		21	%
Magnum Coal		4		19	%
Conemaugh Fuels		3		14	%
Consol Energy		3		15	%

(h)  Property, Plant and Equipment and Depreciation Expense.

Orion Power computes depreciation using the straight-line method based on estimated useful lives. Depreciation expense was $79 million, $80 million and $87 million during 2009, 2008 and 2007, respectively.

	Estimated Useful		December 31,
	Lives (Years)		2009			2008
			(in millions)
Electric generation facilities		20 – 32	$	1,670		$	1,831
Land improvements		20 – 32		81			96
Other		3 – 10		10			12
Land				13			13
Assets under construction				331			259
Total				2,105			2,211
Accumulated depreciation				(499	)		(490	)
Property, plant and equipment, net			$	1,606		$	1,721

See note 4 for discussion of Orion Power’s recoverability assessments of long-lived assets (property, plant and equipment and related intangible assets).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(i)   Intangible Assets and Amortization Expense.

Goodwill.  Orion Power performed its goodwill impairment test annually on April 1 and when events or changes in circumstances indicated that the carrying value may not have been recoverable. During 2008, Orion Power impaired its remaining goodwill. See note 5.

Other Intangibles.  Orion Power recognizes specifically identifiable intangible assets, including emission allowances, when specific rights and contracts are acquired. Orion Power has no intangible assets with indefinite lives recorded as of December 31, 2009 and 2008. See note 4 for discussion of Orion Power’s recoverability assessments of long-lived assets (property, plant and equipment and related intangible assets).

(j)   Capitalization of Interest Expense.

Orion Power capitalizes interest on capital projects greater than $10 million and under development for one year or more. During 2009, 2008 and 2007, Orion power capitalized $16 million, $13 million and $3 million of interest expense, respectively, relating primarily to environmental capital expenditures for SO₂ emission reductions at the Cheswick plant.

(k)   Income Taxes.

Federal.  Orion Power is included in the consolidated federal income tax returns of RRI Energy and calculates its income tax provision on a separate return basis, whereby RRI Energy pays all federal income taxes on Orion Power’s behalf and is entitled to any related tax savings. The difference between Orion Power’s current federal income tax expense or benefit, as calculated on a separate return basis, and related amounts paid to/received from RRI Energy, if any, are recorded to (a) income taxes payable to RRI Energy, Inc. if Orion Power has cumulative taxable income on a separate return basis or (b) deferred tax assets if Orion Power has cumulative taxable losses on a separate return basis. Deferred federal income taxes reflected on Orion Power’s consolidated balance sheet will ultimately be settled with RRI Energy. See notes 3 and 11.

State.  Orion Power is included in the consolidated state income tax returns of RRI Energy. It calculates its state provision, related payables or receivables and deferred state income taxes on a separate return basis and settles the related assets and liabilities with the governmental entity or RRI Energy based on the tax status of the applicable entities. See note 11.

(l)   Cash and Cash Equivalents.

Orion Power records all highly liquid short-term investments with maturities of three months or less as cash equivalents.

(m)   Inventory.

Orion Power values fuel inventories at the lower of average cost or market. Orion Power reduces these inventories as they are used in the production of electricity or sold. During 2009, 2008 and 2007, Orion Power recorded $58 million, $1 million and $0, respectively, for lower of average cost or market valuation adjustments in cost of sales. Orion Power values materials and supplies at average cost. Orion Power removes these inventories when they are used for repairs, maintenance or capital projects. Sales of fuel inventory are classified as operating activities in the consolidated statement of cash flows.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	December 31,
	2009		2008
	(in millions)
Materials and supplies, including spare parts	$	36	$	24
Coal		47		49
Heating oil		1		1
Total inventory	$	84	$	74

(n)   Environmental Costs.

Orion Power expenses environmental expenditures related to existing conditions that do not have future economic benefit. Orion Power capitalizes environmental expenditures for which there is a future economic benefit. Orion Power records liabilities for expected future costs, on an undiscounted basis, related to environmental assessments and/or remediation when they are probable and can be reasonably estimated. See note 13.

(o)   Asset Retirement Obligations.

Orion Power’s asset retirement obligations relate to future costs associated primarily with coal ash disposal site closures. Changes in asset retirement obligations, classified in other long-term liabilities, are:

	2009			2008
	(in millions)
Balance, beginning of period	$	7		$	8
Revisions in estimated cash flows		6	(1)		—
Payments		(3	)		(1	)
Accretion expense		1			—
Balance, end of period	$	11		$	7

(1) Primarily relates to changes in timing of expected closures and higher estimated costs.

As of December 31, 2009 and 2008, Orion Power has $3 million and $2 million, respectively, (classified in other long-term assets) on deposit with the state of Pennsylvania to guarantee its obligation related to future closures of coal ash disposal landfill sites. See note 13.

(p)   Repair and Maintenance Costs for Power Generation Assets.

Orion Power expenses repair and maintenance costs as incurred.

(q)   New Accounting Pronouncements Adopted.

FASB Codification.  The Financial Accounting Standards Board’s Accounting Standards Codification became effective for Orion Power in the third quarter of 2009. The Codification brings together in one place all authoritative GAAP except for rules, regulations and interpretative releases of the Securities and Exchange Commission which are also authoritative GAAP for Orion Power. This change did not materially affect Orion Power’s consolidated financial statements.

Measuring Liabilities at Fair Value.  This guidance provides clarification for measuring liabilities at fair value when there may be a lack of observable market information and requires an entity under those circumstances to employ techniques that use (a) the quoted price of the identical liability when traded as an asset, (b) quoted prices for similar liabilities or similar liabilities when traded as assets or (c) another valuation technique consistent with the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

fair value measurement principles such as an income approach or a market approach. This change did not impact Orion Power’s consolidated financial statements. See note 2(d).

Disclosures about Plan Assets.  This guidance requires enhanced disclosures regarding investment policies and strategies for Orion Power’s benefit plan assets as well as information about fair value measurements of plan assets. See note 8.

Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly.  This guidance provides direction on how to determine the fair value of certain assets and liabilities when there has been a significant decrease in the volume and level of activity for an asset or liability compared with normal market activity for the asset or liability. This guidance did not have a significant impact on Orion Power’s consolidated financial statements since the markets in which it purchases and sells commodities and derivative instruments are not distressed. See notes 2(d) and 6.

(r)   New Accounting Pronouncement Not Yet Adopted.

Improving Disclosures about Fair Value Measurements.  Effective for the 2010 financial statements, this guidance provides for disclosures of significant transfers in and out of Levels 1 and 2. In addition, it clarifies existing disclosure requirements regarding inputs and valuation techniques as well as the appropriate level of disaggregation for fair value measurements disclosures. Effective for the 2011 financial statements, this guidance provides for disclosures of activity on a gross basis within the Level 3 reconciliation. These changes will only affect Orion Power’s disclosures.

(3)   Related Party Transactions

These financial statements include the impact of significant transactions between Orion Power and RRI Energy. The majority of these transactions involve the purchase or sale of energy, capacity, fuel, emission allowances or related services (including transportation, transmission and storage services) from or to Orion Power and allocations of costs to Orion Power for support services.

Support and Technical Services.  RRI Energy provides commercial support, technical services and other corporate services to Orion Power. RRI Energy allocates certain support services costs to Orion Power based on Orion Power’s underlying planned operating expenses relative to the underlying planned operating expenses of other entities to which RRI Energy provides similar services and also charges Orion Power for certain other services based on usage. Management believes this method of allocation is reasonable. These allocations and charges are not necessarily indicative of what would have been incurred had Orion Power been an unaffiliated entity.

The following details the amounts recorded as operation and maintenance—affiliates and general and administrative—affiliates:

	2009		2008		2007
	(in millions)
Allocated or charged by RRI Energy	$	50	$	57	$	65

Commodity Procurement and Marketing.  Orion Power has sales to and purchases from RRI Energy related to commodity procurement and marketing services.

	2009			2008			2007
	(in millions)
Sales to RRI Energy under various commodity agreements(1)	$	303		$	571		$	543
Purchases from RRI Energy under various commodity agreements(2)		2			2			1
Gains on coal sales to RRI Energy		—	(3)		6	(3)		6	(3)
Sales of emission allowances to RRI Energy(4)		5			—			13
Gains on emission allowances sales to RRI Energy(5)		3			—			6

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(1)	Recorded in revenues—affiliates.
(2)	Recorded in cost of sales—affiliates.
(3)	Recorded in cost of sales—affiliates.
(4)	Reflects price at which RRI Energy sold the emission allowances to third parties.
(5)	Recorded in gains on sales of assets and emission allowances, net.

Orion MidWest Revolving Credit Facility with RRI Energy.  In December 2004, Orion Power Midwest, L.P. (Orion MidWest) entered into a $75 million revolving credit facility, among other notes that have terminated, with RRI Energy. The $75 million Orion MidWest revolving credit facility was increased throughout 2009 and was increased to $325 million in January 2010 and matures in June 2010. Orion MidWest expects to terminate the facility and participate in RRI Energy’s intercompany cash management arrangement. The credit facility bears interest at the LIBOR rate plus 2.875% and is payable monthly. Orion Power has incurred interest expense related to the revolving credit facility of $3 million, $2 million and $3 million during 2009, 2008 and 2007, respectively.

Note Receivable from RRI Energy.  In March 2006, Orion Power made a term loan to RRI Energy for $92 million. The note bore interest at ten percent through September 2007 and interest was payable monthly. Effective October 2007, the interest rate was changed to 7.5 percent. During 2009, RRI Energy paid off the remaining amounts of $54 million. During 2008 and 2007, RRI Energy paid down $13 million and $25 million, respectively, on this loan. Orion Power earned interest income related to this term loan of $1 million, $5 million and $8 million during 2009, 2008 and 2007, respectively.

Secured Revolving Letter of Credit Facility Agreement with RRI Energy.  RRI Energy posts letters of credit and cash collateral on behalf of Orion Power. During 2006, RRI Energy and Orion Power entered into a Secured Revolving Letter of Credit Facility Agreement whereby Orion Power agreed to provide cash to RRI Energy as collateral for letters of credit when issued up to a maximum of $20 million. The agreement expires on April 30, 2010. As letters of credit expire, Orion Power may ask for the return of the cash collateral. Orion Power reimburses RRI Energy for the costs of the letters of credit and earns interest income on the collateral posted. During 2009, RRI Energy replaced all letters of credit issued under the agreement with cash collateral and Orion Power directed RRI Energy to retain its cash collateral. As of December 31, 2008, RRI Energy posted letters of credit totaling $14 million on behalf of Orion Power. As of December 31, 2009 and 2008, Orion Power has provided cash collateral of $14 million to RRI Energy. During 2009, 2008 and 2007, the letters of credit costs, recorded in interest expense, were insignificant and related interest income was $0, $0 and $1 million, respectively.

Commitment Agreement with RRI Energy.  On February 8, 2010, RRI Energy and Orion Power entered into an agreement, which, subject to certain terms and conditions, commits RRI Energy to provide either a capital contribution or loan of approximately $400 million to Orion Power to be used to pay, at maturity, the Orion Power Holdings senior notes due May 1, 2010. See note 7.

Income Taxes.  See discussion in note 2(k) regarding Orion Power’s policy with respect to income taxes and the long-term taxes payable to RRI Energy, Inc. As of December 31, 2009 and 2008, Orion Power has $12 million and $87 million, respectively, recorded as long-term taxes payable to RRI Energy, Inc., which includes accrued interest payable of $12 million and $10 million, respectively. Orion Power has incurred interest expense related to this payable of $1 million, $4 million and $6 million during 2009, 2008 and 2007, respectively.

(4)   Long-Lived Assets Impairment

Orion Power periodically evaluates the recoverability of our long-lived assets (property, plant and equipment and intangible assets), which involves significant judgment and estimates, when there are certain indicators (see below) that the carrying value of these assets may not be recoverable. As of December 31, 2009, Orion Power had $1.8 billion of long-lived assets. See notes 2(h) and 5.

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Orion Power evaluates its long-lived assets when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Examples of such events or changes in circumstances are:

•  a significant decrease in the market price of a long-lived asset

•  a significant adverse change in the manner an asset is being used or its physical condition

•  an adverse action by a regulator or legislature or an adverse change in the business climate

•  an accumulation of costs significantly in excess of the amount originally expected for the construction or acquisition of an asset

•  a current-period loss combined with a history of losses or the projections of future losses

•  a change in the intent about an asset from an intent to hold to a greater than 50% likelihood that an asset will be sold or disposed of before the end of its previously estimated useful life

When Orion Power believes an impairment condition may have occurred, Orion Power is required to estimate the undiscounted future cash flows associated with a long-lived asset or group of long-lived assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities for long-lived assets that are expected to be held and used. Each plant (including its property, plant and equipment and intangible assets) was determined to be its own group.

The determination of impairment is a two-step process, the first of which involves comparing the undiscounted cash flows to the carrying value of the asset. If the carrying value exceeds the undiscounted cash flows, the fair value of the asset must be determined. The fair value of an asset is the price that would be received from a sale of the asset in an orderly transaction between market participants at the measurement date. Quoted market prices in active markets are the best evidence of fair value and are used as the basis for the measurement, when available. In the absence of quoted prices for identical or similar assets, fair value is estimated using various internal and external valuation methods. These methods include discounted cash flow analyses and reviewing available information on comparable transactions.

Key Assumptions.  The following summarizes some of the most significant estimates and assumptions used in evaluating Orion Power’s plant level undiscounted cash flows. The ranges for the fundamental view assumptions are to account for variability by year and region.

	December 31, 2009
Undiscounted Cash Flow Scenarios Weightings:
5-year market forecast with escalation(1)(2)	50%
5-year market forecast with fundamental view(1)	50%
Range of Assumptions in Fundamental View:
Demand for power growth per year	1%-2%
After-tax rate of return on new construction(3)	7.5%-8.5%
Spread between natural gas and coal prices, $/MMBTU(4)	$3-$5

(1)	For each scenario, the first five years of cash flows are the same.
(2)	Orion Power assumed an annual 2.5% escalation percentage beyond year five.
(3)	The low to mid part of the range represents natural gas-fired plants’ required returns and the mid to high part of the range represents coal-fired and nuclear plants’ required returns.
(4)	Natural gas and coal prices are prior to transportation costs.

Orion Power estimates the undiscounted cash flows of its plants based on a number of subjective factors, including: (a) appropriate weighting of undiscounted cash flow scenarios, as shown in the table above, (b) forecasts

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of future power generation margins, (c) estimates of the future cost structure, (d) environmental assumptions, (e) time horizon of cash flow forecasts and (f) estimates of terminal values of plants, if necessary, from the eventual disposition of the assets.

Under the 5-year market forecast with escalation scenario, Orion Power uses the following data: (a) forward market curves for commodity prices as of December 18, 2009 for the first five years, (b) cash flow projections through the plant’s estimated remaining useful life and (c) escalation factor of cash flows of 2.5% per year after year five.

Under the 5-year market forecast with fundamental view scenario, Orion Power models all of its plants and those of others in the regions in which it operates, using these assumptions: (a) forward market curves for commodity prices as of December 18, 2009 for the first five years; (b) ranges shown in the table above used in developing the fundamental view beyond five years; (c) the markets in which Orion Power operates will continue to be deregulated and earn margins based on forward or projected market prices; (d) projected market prices for energy and capacity will be set by the forecasted available supply and level of forecasted demand—new supply will enter markets when market prices and associated returns, including any assumed subsidies for renewable energy, are sufficient to achieve minimum return requirements; (e) minimum return requirements on future construction of new generation facilities, as shown in the table above, will likely be driven or influenced by utilities, which Orion Power expects will have a lower cost of capital than merchant generators; (f) various ranges of environmental regulations, including those for SO₂, NO_x and greenhouse gas emissions; and (g) cash flow projections through the plant’s estimated remaining useful life.

Fair Value.  Generally, fair value will be determined using an income approach or a market-based approach. Under the income approach, the future cash flows are estimated as described above and then discounted using a risk-adjusted rate. Under a market-based approach, Orion Power may also consider prices of similar assets, consult with brokers or employ other valuation techniques.

The following are key assumptions used in Orion Power’s fair value analyses for its plant for which the undiscounted cash flows did not exceed the net book value of the long-lived assets.

	New Castle
Valuation approach weightings:
Income approach		100	%
Market-based approach		0	%
Risk-adjusted discount rate for the estimated cash flows		15	%

Orion Power only used the income approach as it believes no relevant market data exists for the New Castle plant. The discount rate reflects the uncertainty of the plant’s cash flows and its inability to support meaningful amounts of debt, and was determined considering factors such as the potential for future capacity and power purchase agreement revenues and regulatory, commodity and macroeconomic conditions.

Orion Power determined that its New Castle plant, which consists of property, plant and equipment, was impaired by $120 million as of December 31, 2009. This impairment was primarily due to the expected levels of low profitability given that the plant would likely require significant environmental capital expenditures in the future under existing and likely environmental regulations. Orion Power believes the remaining net book value of $44 million for New Castle represents its best estimate of fair value as of December 31, 2009.

Certain disclosures are required about nonfinancial assets and liabilities measured at fair value on a nonrecurring basis. This applies to Orion Power’s long-lived assets for which it was required to determine fair value. A fair value hierarchy exists for inputs used in measuring fair value that maximizes the use of observable inputs (Level 1 or Level 2) and minimizes the use of unobservable inputs (Level 3) by requiring that the observable inputs be used when available. See note 2(d) for further discussion about the three levels. These assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Orion Power’s

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assessment of the significance of a particular input to the fair value measurement requires judgment and affects the valuation of fair value and the asset’s placement within the fair value hierarchy levels.

					2009
	December 31, 2009				Impairment
	Level 1	Level 2	Level 3		Charges
		(in millions)
New Castle property, plant and equipment	$—	$—	$	44	$	120

Effect if Different Assumptions Used.  The estimates and assumptions used to determine whether long-lived assets are recoverable or whether impairment exists are subject to high degree of uncertainty. Different assumptions as to power prices, fuel costs, the future cost structure, environmental assumptions and remaining useful lives and ultimate disposition values of the plants would result in estimated future cash flows that could be materially different than those considered in the recoverability assessments as of December 31, 2009 and could result in having to estimate the fair value of other plants.

Use of a different risk-adjusted discount rate would result in fair value estimates for the New Castle plant for which Orion Power recorded an impairment in 2009 that could be materially greater than or less than the fair value estimates as of December 31, 2009. Any future fair value estimates for our New Castle long-lived assets that are greater than the fair value estimate as of December 31, 2009 will not result in reversal of the 2009 impairment charge.

(5)   Intangible Assets

(a)   Goodwill.

The following table shows goodwill and the changes for 2008 (in millions):

As of January 1, 2008	$	174
Impairment		(174	)
As of December 31, 2008	$	—

As of December 31, 2009 and 2008, Orion Power had $26 million and $30 million, respectively, of goodwill that is deductible for United States income tax purposes in future periods.

Orion Power tested goodwill for impairment on an annual basis in April (through 2008), and more often if events or circumstances indicated there may have been impairment. Orion Power continually assessed whether any indicators of impairment existed, which required a significant amount of judgment. Such indicators may have included a sustained significant decline in RRI Energy, Inc.’s share price and market capitalization; a decline in expected future cash flows; a significant adverse change in legal factors or in the business climate; unanticipated competition; overall weakness in the industry; and slower growth rates. Any adverse change in these factors could have had significant impact on the recoverability of goodwill and could have had a material impact on the consolidated financial statements.

During April 2008, Orion Power tested goodwill for impairment and determined that no impairment existed.

During the third and fourth quarters of 2008, given adverse changes in the business climate and the credit markets, RRI Energy, Inc.’s market capitalization being lower than its book value during all of the fourth quarter and extending into 2009, RRI Energy’s review of strategic alternatives to enhance stockholder value and reductions in the expected near-term cash flows from operations, Orion Power reviewed its goodwill for impairment. Orion Power concluded that no goodwill impairment occurred as of September 30, 2008. As discussed below, as of December 31, 2008, Orion Power concluded that its goodwill of $174 million was impaired.

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Goodwill was reviewed for impairments based on a two-step test. In the first step, Orion Power compared its fair value with its net book value. Orion Power applied judgment in determining the fair value for purposes of performing the goodwill impairment test because quoted market prices for its business were not available. In estimating the fair value, Orion Power used a combination of an income approach and a market-based approach.

•  Income approach—Orion Power discounted its expected cash flows. The discount rate used represented the estimated weighted average cost of capital, which reflected the overall level of inherent risk involved in its operations and cash flows and the rate of return an outside investor would expect to earn. To estimate cash flows beyond the final year of its model, Orion Power applied a terminal value multiple to the final year EBITDA.

•  Market-based approach—Orion Power used the guideline public company method, which focused on comparing its risk profile and growth prospects to select reasonably similar/guideline publicly traded companies. Orion Power also used a public transaction method, which focused on exchange prices in actual transactions as an indicator of fair value.

In weighting the results of the various valuation approaches, prior to the fourth quarter of 2008, Orion Power placed more emphasis on the income approach, using management’s future cash flow projections and risk-adjusted discount rates. As Orion Power’s earnings outlook declined, its earnings variability increased and RRI Energy, Inc.’s market capitalization declined significantly in 2008, Orion Power increased the weighting of the estimates of fair value determined by the market-based approaches. Further, the aggregate estimated fair value of RRI Energy’s reporting units was compared to its total market capitalization, adjusted for a control premium. A control premium is added to the market capitalization to reflect the value that existed with having control over an entire entity.

If the estimated fair value was higher than the recorded net book value, no impairment was considered to exist and no further testing was required. However, if the estimated fair value was below the recorded net book value, a second step must be performed to determine the goodwill impairment required, if any. In the second step, the estimated fair value from the first step was used as the purchase price in a hypothetical acquisition, which was then allocated to the entity’s assets and liabilities in accordance with purchase accounting rules. The residual amount of goodwill that resulted from this hypothetical purchase price allocation was compared to the recorded amount of goodwill for the entity, and the recorded amount was written down to the hypothetical amount, if lower.

Orion Power estimated its fair value based on a number of subjective factors, including: (a) appropriate weighting of valuation approaches, as discussed above, (b) projections about the future power generation margins, (c) estimates of future cost structure, (d) environmental assumptions, (e) risk-adjusted discount rates for estimated cash flows, (f) selection of peer group companies for the public company market approach, (g) required level of working capital, (h) assumed EBITDA multiple for terminal values and (i) time horizon of cash flow forecasts.

As part of the process, Orion Power developed 15-year forecasts of earnings and cash flows, assuming that demand for power grows at the rate of two percent a year. It modeled all of its power generation facilities and those of others in the regions in which Orion Power operates, using these assumptions: (a) the markets in which Orion Power operates will continue to be deregulated and earn a market return; (b) there will be a recovery in electricity margins over time such that companies building new generation facilities can earn a reasonable rate of return on their investment, which implies that margins and therefore cash flows in the future would be better than they are today because market prices will need to rise high enough to provide an incentive for new plants to be built, and the entire market will realize the benefit of those higher margins and (c) the long-term returns on future construction of new generation facilities will likely be driven by integrated utilities, which Orion Power expects will have a lower cost of capital than merchant generators, which implies that the revenues and margins described in (b) above will be at the level of return required for a regulated entity instead of a deregulated company. Orion Power assumed that the after-tax rate of return on new construction was 7.5%.

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Orion Power’s assumptions for each of its goodwill impairment assessments during 2007 and 2008:

	April			April			September			December
	2007			2008			2008			2008
Income approach assumptions
EBITDA multiple for terminal values(1)		8.0			8.0			7.0			7.0
Risk-adjusted discount rate for estimated cash flows(2)		10.0	%		10.5	%		11.5	%		13.0	%
Market-based approach
EBITDA multiple for publicly traded company		8			8			5			6
Valuation approach weightings(3)
Income approach		70	%		60	%		80	%		25	%
Market-based approach		30	%		40	%		20	%		75	%

(1)	Changed primarily due to market factors affecting peer company comparisons.
(2)	Increased primarily due to capital structure of peer company comparisons and increased required rate of return on debt and equity capital of peer companies.
(3)	Changed primarily due to increased focus on market-based approaches. See discussion above.

Based on Orion Power’s analysis, it concluded that it did not pass the first step as of December 31, 2008, primarily due to lower expected cash flows due to the adverse business climate, significantly lower expected exchange transaction values due to credit market disruptions which would make it difficult for transactions to occur and increase the price of those transactions and significantly lower valuations for the peer companies. In addition, when RRI Energy compared the aggregate of its fair value estimates of both reporting units to its market capitalization, including a control premium, it determined that the market participants’ views of its fair value had also declined significantly.

Orion Power then performed the second step of the impairment test, which required an allocation of the fair value as the purchase price in a hypothetical acquisition of the entity. The significant hypothetical purchase price allocation adjustments made to the assets and liabilities of Orion Power consisted of the following:

•  Adjusting the carrying value of property, plant and equipment to values that would be expected in the current credit and market environment

•  Adjusting the carrying value of emission allowances, which then traded at amounts significantly higher than book value

•  Adjusting the carrying value of debt, which had a lower fair value than book value

•  Adjusting deferred income taxes for changes in the balances listed above

After making these hypothetical adjustments, no residual value remained for a goodwill allocation resulting in the impairment of Orion Power’s goodwill net carrying amount of $174 million as of December 31, 2008.

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(b)   Other Intangibles.

	Remaining
	Weighted			December 31,
	Average			2009						2008
	Amortization			Carrying			Accumulated			Carrying			Accumulated
	Period (Years)			Amount			Amortization			Amount			Amortization
							(in millions)
SO2emission allowances(1)(2)		—	(1)	$	61	(3)	$	(6	)(3)	$	68	(4)	$	(12	)(4)
NOxemission allowances(1)(5)		—	(1)		105	(3)		—	(3)		109	(4)		—	(4)
Total				$	166		$	(6	)	$	177		$	(12	)

(1)	SO2 is sulfur dioxide and NOx is nitrogen oxides. Amortized to amortization expense on a units-of-production basis. As of December 31, 2009, Orion Power has recorded (a) SO2 emission allowances through the 2039 vintage year and (b) NOx emission allowances through the 2039 vintage year.
(2)	During 2009, 2008 and 2007, Orion Power purchased $15 million, $18 million and $28, respectively, of SO2 emission allowances from affiliates.
(3)	During 2009, Orion Power wrote off the fully amortized carrying amount and accumulated amortization for SO2 and NOx emission allowances surrendered of $20 million and $4 million, respectively.
(4)	During 2008, Orion Power wrote off the fully amortized carrying amount and accumulated amortization for SO2 and NOx emission allowances surrendered of $110 million and $76 million, respectively.
(5)	During 2009, 2008 and 2007, Orion Power purchased $0, $5 million and $4 million, respectively, of NOx emission allowances from affiliates.

	2009		2008		2007
			(in millions)
Amortization of emission allowances	$	10	$	24	$	50

Estimated amortization expense based on Orion Power’s intangibles as of December 31, 2009 for the next five years is (in millions):

2010	$	7	(1)
2011		7	(1)
2012		7	(1)
2013		7	(1)
2014		7	(1)

(1) These amounts do not include expected amortization expense of emission allowances not purchased as of December 31, 2009.

(6)   Derivatives and Hedging Activities

Orion Power uses derivative instruments to manage operational or market constraints and to increase return on its generation assets. See note 2(e).

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As of December 31, 2009, Orion Power’s commodity derivative assets and liabilities include amounts for non-trading activities as follows:

	Derivative Assets				Derivative Liabilities					Net Derivative
	Current		Long-Term		Current			Long-Term		Assets/(Liabilities)
	(in millions)
Non-trading	$	—	$	—	$	(8	)	$	—	$	(8	)
Total derivatives	$	—	$	—	$	(8	)	$	—	$	(8	)

Orion Power has the following derivative commodity contracts outstanding as of December 31, 2009:

		Notional Volumes
Commodity	Unit(1)	Current		Long-term
		(in millions)
Coal	MMBTU		54		141	(2)

(1)	MMBTU is million British thermal units.
(2)	For 2011 through 2013, Orion Power has committed to purchase volumes of 141 million MMBTU (which are included in this table) for which the contract prices are subject to negotiation and agreement prior to the beginning of each year. No coal derivative contracts for the 2011 to 2013 delivery periods have been priced as of December 31, 2009. See note 12(c).

The income (loss) associated with Orion Power’s energy derivatives during 2009 is:

Derivatives Not Designated as Hedging Instruments	Revenues		Cost of Sales
	(in millions)
Non-Trading Commodity Contracts:
Unrealized	$	—	$	62
Realized(1)(2)		—		—
Total non-trading	$	—	$	62

(1)	Does not include realized gains or losses associated with cash month transactions, non-derivative transactions or derivative transactions that qualify for the normal purchase/normal sale exception.
(2)	Excludes settlement value of coal contracts classified as inventory upon settlement.

(7)   Debt

	December 31,
	2009							2008
	Weighted							Weighted
	Average							Average
	Stated							Stated
	Interest							Interest
	Rate(1)			Long-term		Current		Rate(1)			Long-term		Current
	(in millions, except interest rates)
Orion Power Holdings senior notes due 2010 (unsecured)		12.00	%	$	—	$	400		12.00	%	$	400	$	—
Adjustment to fair value of debt(2)					—		5					4		13
Total debt				$	—	$	405				$	404	$	13

(1) The weighted average stated interest rates are as of December 31, 2009 or 2008.

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(2) Debt acquired by RRI Energy in the Orion Power acquisition was adjusted to fair value as of the acquisition date. Included in interest expense is amortization of $12 million, $11 million and $11 million for valuation adjustments for debt during 2009, 2008 and 2007, respectively.

Debt maturities as of December 31, 2009 are (in millions):

2010	$	400
2011		—
2012		—
2013		—
2014		—
2015 and thereafter		—
	$	400

Orion Power Holdings Senior Notes.  These notes were recorded at a fair value of $479 million upon the acquisition by RRI Energy. The $79 million premium is being amortized to interest expense over the life of the notes. The senior notes are senior unsecured obligations of Orion Power Holdings, are not guaranteed by any of Orion Power Holdings’ subsidiaries and are non-recourse to RRI Energy. The senior notes have covenants that restrict the ability of Orion Power Holdings and its subsidiaries to, among other actions, (a) pay dividends or pay subordinated debt, (b) incur indebtedness or issue preferred stock, (c) make investments, (d) divest assets, (e) encumber its assets, (f) enter into transactions with affiliates, (g) engage in unrelated businesses and (h) engage in sale and leaseback transactions. As of December 31, 2009, conditions under these covenants that allow the payment of dividends by Orion Power Holdings were not met. As of December 31, 2009, the adjusted net assets of Orion Power that are restricted to RRI Energy, Inc. are $1.3 billion.

Orion Power plans to fund the $400 million debt obligation due May 1, 2010 with cash from RRI Energy. See note 3 for RRI Energy’s commitment regarding this funding and other debt transactions with affiliates.

(8)   Pension and Postretirement Benefits

Benefit Plans.  Orion Power sponsors multiple defined benefit pension plans. Orion Power provides subsidized postretirement benefits to some bargaining employees but generally does not provide them to non-bargaining employees.

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Orion Power’s benefit obligations and funded status are:

	Pension						Postretirement Benefits
	2009			2008			2009			2008
	(in millions)
Change in Benefit Obligations
Beginning of year	$	65		$	60		$	33		$	33
Service cost		2			3			—			—
Interest cost		4			3			1			2
Benefits paid		(3	)		(2	)		(1	)		—
Plan amendments/adjustments		1			1			(3	)		2
Actuarial (gain) loss		3			—			(1	)		(4	)
Special termination benefits		2			—			1			—
End of year	$	74		$	65		$	30		$	33
Change in Plans’ Assets
Beginning of year	$	34		$	46		$	—		$	—
Employer contributions		13			3			1			—
Benefits paid		(3	)		(2	)		(1	)		—
Actual investment return		8			(13	)		—			—
End of year	$	52		$	34		$	—		$	—
Funded status	$	(22	)	$	(31	)	$	(30	)	$	(33	)

Amounts recognized in the consolidated balance sheets are:

							Postretirement
	Pension						Benefits
	December 31,						December 31,
	2009			2008			2009			2008
	(in millions)
Current liabilities	$	—		$	—		$	(2	)	$	(1	)
Noncurrent liabilities		(22	)		(31	)		(28	)		(32	)
Net amount recognized	$	(22	)	$	(31	)	$	(30	)	$	(33	)

The accumulated benefit obligation for all pension plans was $72 million and $59 million as of December 31, 2009 and 2008, respectively. All pension plans have accumulated benefit obligations in excess of plan assets.

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Net periodic benefit costs are:

	Pension									Postretirement Benefits
	2009			2008			2007			2009			2008		2007
	(in millions)
Service cost	$	2		$	3		$	3		$	—		$	—	$	—
Interest cost		4			3			3			1			2		2
Expected return on plan assets		(3	)		(3	)		(3	)		—			—		—
Adjustment to annual expense		—			—			—			—			2		—
Net amortization		3			1			1			—			—		—
Net curtailments (gain) loss		5			—			—			(3	)		—		—
Special termination benefits		2			—			—			1			—		—
Net periodic benefit costs	$	13		$	4		$	4		$	(1	)	$	4	$	2

As of December 31, 2009, $0.8 million and $(0.2) million of net actuarial loss and net prior service costs, respectively, in accumulated other comprehensive loss are expected to be recognized in net periodic benefit cost during the next 12 months.

Assumptions.  The significant weighted average assumptions used to determine the benefit obligations are:

							Postretirement
	Pension						Benefits
	December 31,						December 31,
	2009			2008			2009			2008
	(in millions)
Discount rate		5.50	%		5.75	%		5.50	%		5.75	%
Rate of compensation increase		3.0	%		3.0	%		N/A			N/A

The significant weighted average assumptions used to determine the net periodic benefit costs are:

	Pension									Postretirement Benefits
	2009			2008			2007			2009			2008			2007
Discount rate		5.75	%		5.75	%		5.75	%		5.75	%		5.75	%		5.75	%
Rate of compensation increase		3.0	%		3.0	%		3.0	%		N/A			N/A			N/A
Expected long-term rate of return on plan assets		7.5	%		7.5	%		7.5	%		N/A			N/A			N/A

The expected long-term rate of return on assets is determined based on third party capital market asset models. Generally, a time horizon of greater than five years is assumed and, therefore, interim volatility in returns is regarded with the appropriate perspective. Models assume that future returns are based on long-term, historical performance as adjusted for any differences in expected inflation, current dividend yields, expected corporate earnings growth and risk premiums based on the expected volatility of each asset category. The adjusted historical returns are weighted by the long-term pension plan asset allocation targets. Orion Power’s investment manager and actuarial consultant assist with the analysis.

Orion Power’s assumed health care cost trend rates used to measure the expected cost of benefits covered by its postretirement plan are:

	2009			2008			2007
Health care cost trend rate assumed for next year(1)		8.0	%		7.9	%		8.3	%
Rate to which the cost trend rate is assumed to gradually decline (ultimate trend rate)(1)		5.5	%		5.5	%		5.5	%
Year that the rate reaches the ultimate trend rate		2015			2015			2015

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(1) Represents blended rate for medical and prescription drug costs.

Assumed health care cost trend rates can have a significant effect on the amounts reported for Orion Power’s health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects as of December 31, 2009:

	One-Percentage Point
	Increase		Decrease
	(in millions)
Effect on service and interest cost	$	—	$	—
Effect on accumulated postretirement benefit obligation		3		(3	)

Plans’ Assets.  RRI Energy’s Benefits Committee establishes the overall investment policy for the plans’ assets and appoints an investment manager to implement it. Plans’ assets are managed solely in the interest of the plans’ participants and their beneficiaries and are invested with the objective of earning the necessary returns to meet the time horizons of the accumulated and projected retirement benefit obligations. Plan asset diversification across asset types, fund strategies, and fund managers is intended to manage risk to a reasonable and prudent level. The investment manager may use derivative securities for diversification, risk-control and return enhancement purposes but may not use them for the purpose of leverage.

Orion Power’s pension weighted average asset allocations and target allocation by asset category are:

	Percentage of Plan Assets						Target
	as of December 31,						Allocation(1)
	2009			2008			2010
Domestic equity securities		34	%		36	%		35	%
International equity securities		26			21			25
Global equity securities		10			9			10
Debt securities		30			34			30
Total		100	%		100	%		100	%

(1) RRI Energy’s Benefits Committee has determined an allowable range for each category; these percentages represent the mid-point for each respective range.

In managing the investments associated with the pension plans, Orion Power’s objective is to exceed, on a net-of-fee basis, the rate of return of a performance benchmark composed of the following indices:

Asset Class	Index	Weight
Domestic equity securities	Dow Jones U.S. Total Stock Market Index		40	%
International equity securities	MSCI All Country World Ex-U.S. Index		20
Global equity securities	MSCI All Country World Index		10
Debt securities	Barclays Capital Aggregate Bond Index		30
Total			100	%

RRI Energy’s Benefits Committee reviews plan asset performance each quarter by comparing the actual quarterly returns of each asset class to its related benchmark.

Fair Value Measurements.  The fair value hierarchy establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value into three categories: quoted prices in active markets for identical

F-123

ORION POWER HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

assets or liabilities (Level 1), significant other observable inputs (Level 2) and significant unobservable inputs (Level 3). See note 2(d) for further discussion about the three levels.

The plans’ assets are invested in open-end mutual funds. The shares of the mutual funds held by the plans are valued at quoted market prices in an active market (which are based on the redeemable net asset value of the fund) and are classified as Level 1. The asset allocations below are based on the nature of the underlying mutual fund assets.

As of December 31, 2009, the allocated pension plans’ investments measured at fair value are as follows:

	Level 1		Level 2		Level 3
	(in millions)
Domestic equity securities(1)	$	18	$	—	$	—
International equity securities(2)		13		—		—
Global equity securities(3)		5		—		—
Debt securities(4)		16		—		—
Total	$	52	$	—	$	—

(1)	Comprised of large cap stocks.
(2)	Comprised of large cap foreign stocks.
(3)	Comprised of both foreign and domestic multi-cap stocks.
(4)	Comprised of intermediate-term, investment grade bonds.

Cash Obligations.  Orion Power expects pension cash contributions to approximate $7 million during 2010. Expected benefit payments for the next ten years, which reflect future service as appropriate, are:

			Postretirement
	Pension		Benefits
	(in millions)
2010	$	4	$	2
2011		4		2
2012		4		2
2013		4		2
2014		4		2
2015-2019		27		12

(9)   Savings Plan

Orion Power’s employees participate in RRI Energy’s employee savings plans under Sections 401(a) and 401(k) of the Internal Revenue Code. Orion Power’s savings plan benefit expense, including matching and discretionary contributions, was $2 million during 2009, 2008 and 2007.

(10)   Collective Bargaining Agreements

As of December 31, 2009, approximately 75% of Orion Power’s employees are subject to collective bargaining agreements. Orion Power’s collective bargaining agreements expire at various intervals beginning in 2013.

F-124

ORION POWER HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(11)   Income Taxes

(a)   Summary.

Orion Power’s income tax expense (benefit) is:

	2009			2008			2007
	(in millions)
Current:
Federal	$	(77	)	$	18		$	—
State		(2	)		3			(4	)
Total current		(79	)		21			(4	)
Deferred:
Federal		(45	)		(56	)		(18	)
State		3			9			(4	)
Total deferred		(42	)		(47	)		(22	)
Income tax benefit from continuing operations	$	(121	)	$	(26	)	$	(26	)
Income tax benefit from discontinued operations	$	—		$	(2	)	$	—

A reconciliation of the federal statutory income tax rate to the effective income tax rate for continuing operations is:

	2009			2008			2007
Federal statutory rate		(35	)%		(35	)%		(35	)%
Additions (reductions) resulting from:
State income taxes, net of federal income taxes		—	(1)		5	(2)		(9	)
Goodwill impairment		—			14			—
Other, net		1			(1	)		2
Effective rate		(34	)%		(17	)%		(42	)%

(1)	Of this percentage, $23 million (6%) relates to an increase in Orion Power’s state valuation allowances.
(2)	Of this percentage, $18 million (11%) relates to an increase in Orion Power’s state valuation allowances.

F-125

ORION POWER HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	December 31,
	2009			2008
	(in millions)
Deferred tax assets:
Current:
Derivative liabilities, net	$	3		$	27
Employee benefits		1			1
Valuation allowances		—			(1	)
Other		2			5
Total current deferred tax assets		6			32
Long-term:
Employee benefits		20			21
Net operating loss carryforwards		69			35
Other		5			7
Valuation allowances		(43	)		(20	)
Total long-term deferred tax assets		51			43
Total deferred tax assets	$	57		$	75
Deferred tax liabilities:
Long-term:
Depreciation and amortization	$	122		$	175
Total long-term deferred tax liabilities		122			175
Total deferred tax liabilities	$	122		$	175
Accumulated deferred income taxes, net	$	(65	)	$	(100	)

(b)  Tax Attribute Carryovers.

			Statutory
	December 31,		Carryforward	Expiration
	2009		Period	Years
	(in millions)		(in years)
Net operating loss carryforwards:
Federal	$	49	20	2029
State		806	7 to 20	2018 through 2029

(c)   Valuation Allowances.

Orion Power assesses its future ability to use federal and state net operating loss carryforwards, capital loss carryforwards and other deferred tax assets using the more-likely-than-not criteria. These assessments include an evaluation of Orion Power’s recent history of earnings and losses, future reversals of temporary differences and identification of other sources of future taxable income, including the identification of tax planning strategies in certain situations.

F-126

ORION POWER HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Orion Power’s valuation allowances for deferred tax assets are (in millions):

	State
As of January 1, 2007	$	5
Changes in valuation allowances		(2	)
As of December 31, 2007		3
Changes in valuation allowances		18	(1)
As of December 31, 2008		21
Changes in valuation allowances		22	(2)
As of December 31, 2009	$	43

(1)	Net increase primarily due to 2008 taxable loss.
(2)	Net increase primarily due to 2009 taxable loss and long-lived assets impairment.

(d)   Income Tax Uncertainties.

Orion Power may only recognize the tax benefit for financial reporting purposes from an uncertain tax position when it is more-likely-than-not that, based on the technical merits, the position will be sustained by taxing authorities or the courts. The recognized tax benefits are measured as the largest benefit having a greater than fifty percent likelihood of being realized upon settlement with a taxing authority. Orion Power classifies accrued interest and penalties related to uncertain income tax positions in income tax expense/benefit.

In connection with the adoption of an interpretation of accounting for income tax uncertainties, Orion Power recognized the following in its consolidated financial statements:

	Adoption Effect on
	January 1,
	2007
	Increase (Decrease)
	(in millions)
Goodwill	$	(2	)
Other long-term liabilities		(3	)
Accumulated deficit		(1	)

Orion Power’s unrecognized federal and state tax benefits changed as follows:

	2009		2008			2007
	(in millions)
Balance, beginning of period	$	—	$	—		$	—
Increases related to prior years		—		4			2
Decreases related to prior years		—		(4	)		(2	)
Increases related to current year		—		—			—
Settlements		—		—			—
Lapses in the statute of limitations		—		—			—
Balance, end of period	$	—	$	—		$	—

As of December 31, 2009 and 2008, Orion Power had no amounts accrued for interest or penalties. During 2009, 2008 and 2007, Orion Power recognized $0 of income tax expense (benefit) due to changes in interest and penalties for federal and state income taxes.

F-127

ORION POWER HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Orion Power has the following years that remain subject to examination or are currently under audit for its major tax jurisdictions:

	Subject to		Currently
	Examination		Under Audit
Federal		2002 to 2009	2002 to 2008
Pennsylvania		2005 to 2009	2006
New York state and city		2003 to 2006	2003 to 2006

Orion Power, through RRI Energy, expects to continue discussions with taxing authorities regarding tax positions related to the timing of tax deductions for depreciation and emission allowances and believes it is reasonably possible some of these matters could be resolved during 2010; however, Orion Power cannot estimate the range of changes that might occur.

(12)   Commitments

(a)   Lease Commitments.

Operating Lease Expense.  Total lease expense for all operating leases was $2 million during 2009, 2008 and 2007.

(b)   Guarantees and Indemnifications.

Equity Pledged as Collateral for RRI Energy.  Orion Power Holdings’ equity is pledged as collateral under certain of RRI Energy’s credit and debt agreements, which have an outstanding balance of $650 million as of December 31, 2009 and mature in 2012, 2014 and 2036.

Interests Pledged as Collateral to RRI Energy.  In connection with Orion Power’s debt to RRI Energy (as discussed in note 3), Orion Power Holdings has pledged its interests in Orion Power Capital, LLC, and its subsidiaries, including Orion Power New York, L.P. and Orion MidWest, to RRI Energy.

Other.  Orion Power enters into contracts that include indemnification and guarantee provisions. In general, Orion Power enters into contracts with indemnities for matters such as breaches of representations and warranties and covenants contained in the contract and/or against certain specified liabilities. Examples of these contracts include asset purchase and sales agreements, service agreements and procurement agreements.

Except as otherwise noted, Orion Power is unable to estimate its maximum potential exposure under these agreements until an event triggering payment occurs. Orion Power does not expect to make any material payments under these agreements.

(c)   Other Commitments.

Property, Plant and Equipment Commitments.  As of December 31, 2009, Orion Power has contractual commitments to spend approximately $28 million on plant and equipment relating primarily to maintenance requirements and SO₂ emission reductions.

Fuel Supply Commitment.  Orion Power is a party to fuel supply contracts of various quantities and durations that are not classified as derivative assets and liabilities. These contracts are not included in the consolidated balance sheet as of December 31, 2009. For 2011 through 2013, Orion Power has committed to purchase volumes of 141 million MMBTU under some coal contracts for which the contract prices are subject to negotiation and agreement prior to the beginning of each year.

F-128

ORION POWER HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Other Commitments.  As of December 31, 2009, Orion Power has other fixed commitments related to various agreements that aggregate as follows (in millions):

2010	$	1
2011		1
2012		—
2013		—
2014		2
2015 and thereafter		—
Total	$	4

(13)  Contingencies

Orion Power is involved in some legal, environmental and governmental matters, some of which may involve substantial amounts. Unless otherwise noted, Orion Power cannot predict the outcome of the matters described below.

New Source Review Matters.  The United States Environmental Protection Agency (EPA) and various states are investigating compliance of coal-fueled electric generating plants with the pre-construction permitting requirements of the Clean Air Act known as “New Source Review.” In September 2008, Orion Power received an EPA request for information related to its Avon Lake and Niles plants and in October 2009, Orion Power received supplemental requests for those two plants. The EPA agreed to share information relating to its investigations with state environmental agencies.

Ash Disposal Landfill Closures.  Orion Power is responsible for environmental costs related to the future closures of two ash disposal landfills owned by Orion MidWest. Orion Power recorded the estimated discounted costs ($10 million and $7 million as of December 31, 2009 and 2008, respectively) associated with these environmental liabilities as part of its asset retirement obligations. See note 2(o).

Property Tax Contingencies.  Orion Power believes it will be subject to additional property tax liabilities related to years 2001 to 2005. As of December 31, 2009 and 2008, Orion Power has $4 million accrued in long-term liabilities of discontinued operations relating to these contingencies.

(14)   Settlement

In October 2008, Orion Power settled its claims in a suit it filed based on breach of a fuel supply agreement. Under the settlement agreement, Orion Power received settlement payments totaling $20 million (recorded in cost of sales).

(15)   Sales of Assets and Emission Allowances

Emission Allowances.  Orion Power sold emission allowances (primarily SO₂) during 2009, 2008 and 2007 for gains of $3 million, $1 million and $7 million, respectively.

(16)   Discontinued Operations

Subsequent to the sale of the New York plants in February 2006, Orion Power continues to have (a) property tax and sales and use tax settlements and (b) settlements with the independent system operator. These amounts are classified as discontinued operations in the results of operations, consolidated cash flows and consolidated balance sheets, as applicable. See note 13.

F-129

ORION POWER HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following summarizes certain financial information of the New York plants reported as discontinued operations (in millions):

	New York
	Plants
2009
Revenues	$	2
Income before income tax expense/benefit		3
2008
Revenues	$	—
Loss before income tax expense/benefit		(4	)
2007
Revenues	$	(3	)
Income before income tax expense/benefit		7

In addition, during the three months ended March 31, 2009, Orion Power received a $28 million refund (previously accrued in current assets) relating to New York state Empire Zone tax credits for the 2004, 2005 and 2006 periods.

F-130

EX-4.9

Exhibit 4.9

     EXECUTION COPY

EIGHTH SUPPLEMENTAL INDENTURE
ADDITIONAL SUBSIDIARY GUARANTEES

     EIGHTH SUPPLEMENTAL INDENTURE (this “Supplemental Indenture for Additional Guarantees”), dated as of December 1, 2009, among RRI Energy Channelview LP (the “Guaranteeing Subsidiary”), a subsidiary of RRI Energy, Inc. (formerly known as Reliant Energy, Inc.) (or its permitted successor), a Delaware corporation (the “Company"), the Company, the other Guarantors (as defined in the Indenture referred to herein) and Wilmington Trust Company, as trustee under the indentures referred to below (the “Trustee”).

WITNESSETH

WHEREAS, the Company has heretofore executed and delivered to the Trustee a senior indenture (the “Base Indenture”), dated as of December 22, 2004 with the Trustee, and supplemental indentures among the Company, the Guarantors listed therein and the Trustee dated as of December 22, 2004, September 21, 2006, December 1, 2006, June 1, 2009 and August 20, 2009 (the Base Indenture, as so supplemented, is herein referred to as the “Indenture”) relating to the Company’s 6.75% Senior Secured Notes due 2014 (the “Notes”) in an original aggregate principal amount of $750.0 million;

     WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the Notes and the Indenture (the “Note Guarantee”); and

     WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee, the Company and the other Guarantors are authorized to execute and deliver this Supplemental Indenture for Additional Guarantees.

     NOW THEREFORE, in consideration of the foregoing and for good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary, the Trustee, the Company and the other Guarantors mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

     1. Capitalized Terms. Unless otherwise defined in this Supplemental Indenture for Additional Guarantees, capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

     2. Agreement to be Bound; Guarantee. The Guaranteeing Subsidiary hereby becomes a party to the Indenture as a Guarantor and as such will have all of the rights and be subject to all of the Obligations and agreements of a Guarantor under the Indenture. The Guaranteeing Subsidiary hereby agrees to be bound by all of the provisions of the Indenture applicable to a Guarantor and to perform all of the Obligations and agreements of a Guarantor under the Indenture. In furtherance of the foregoing, the Guaranteeing Subsidiary shall be deemed a Guarantor for purposes of Article 12 of the Supplemental Indenture, including, without limitation, Section 12.02 thereof.

1

     3. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE FOR ADDITIONAL GUARANTEES BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

     4. Counterparts. The parties may sign any number of copies of this Supplemental Indenture for Additional Guarantees. Each signed copy shall be an original, but all of them together represent the same agreement.

     5. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

     6. The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture for Additional Guarantees or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.

     7. Ratification of Indenture; Supplemental Indenture for Additional Guarantees Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture for Additional Guarantees shall form a part of the Indenture for all purposes, and every Holder of Notes heretofore or hereafter authenticated and delivered shall by bound hereby.

Remainder of page intentionally left blank

2

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture for Additional Guarantees to be duly executed, all as of the date first above written.

RRI ENERGY CHANNELVIEW LP
By:	RRI Energy Channelview (Texas), LLC, its General Partner

By:	/s/ Andrew C. Johannesen
	Name:	Andrew C. Johannesen
	Title:	Vice President and Treasurer

RRI ENERGY, INC.
By:	/s/ Andrew C. Johannesen
	Name:	Andrew C. Johannesen
	Title:	Vice President and Treasurer

3

RRI ENERGY ASSET MANAGEMENT, LLC
By:	/s/ Matthew E. Greek
	Name:	Matthew E. Greek
	Title:	Vice President
RRI ENERGY BROADBAND, INC. RRI ENERGY CALIFORNIA HOLDINGS, LLC RRI ENERGY COMMUNICATIONS, INC. RRI ENERGY COOLWATER, INC. RRI ENERGY CORPORATE SERVICES, LLC RRI ENERGY ELECTRIC SOLUTIONS, LLC RRI ENERGY ELLWOOD, INC. RRI ENERGY ETIWANDA, INC. RRI ENERGY FLORIDA, LLC RRI ENERGY KEY/CON FUELS, LLC RRI ENERGY MANDALAY, INC. RRI ENERGY NORTHEAST GENERATION, INC. RRI ENERGY NORTHEAST HOLDINGS, INC. RRI ENERGY ORMOND BEACH, INC. RRI ENERGY POWER GENERATION, INC. RRI ENERGY SABINE (DELAWARE), INC. RRI ENERGY SABINE (TEXAS), INC. RRI ENERGY SERVICES, INC. RRI ENERGY SERVICES DESERT BASIN, LLC RRI ENERGY SOLUTIONS EAST, LLC RRI ENERGY TRADING EXCHANGE, INC. RRI ENERGY VENTURES, INC. RRI ENERGY WHOLESALE GENERATION, LLC
By:	/s/ Andrew C. Johannesen
	Name:	Andrew C. Johannesen
	Title:	Vice President and Treasurer of the corporations and limited liability companies listed above

4

WILMINGTON TRUST COMPANY, as Trustee
By:	/s/ Michael G. Oller
	Authorized Signatory

5

EX-10.1.B

Exhibit 10.1B

     Schedule 1.15

Genco Assets

PLANTS AND RELATED PROPERTIES

S. R. Bertron Electric Generating Station — 844 MW

2012 Miller Cut-Off Road, Deer Park, Harris County, Texas 77536

• To include 1,255,528 barrels of fuel oil tankage, associated pumping and measuring equipment, and outlying buildings.

H. O. Clarke Electric Generating Station — 78 MW

12100 Hiram Clark Road, Houston, Harris County, Texas 77036

Deepwater Electric Generating Station — 174 MW

901 Light Company Road, Pasadena, Harris County, Texas 77501

P. H. Robinson Electric Generating Station — 2,213 MW

5501 State Highway 146, Bacliff, Galveston County, Texas 77518

• To include fuel oil/natural gas handling equipment and fuel oil accumulator tank.

• To include remote cooling towers, and discharge and intake canal.

Cedar Bayou Electric Generating Station — 2,260 MW

7705 Old West Bay Boulevard, Eldon, Chambers County, Texas 77520

• To include cooling pond, discharge and intake canal [Road and distribution easement to be granted to Resources for access to the Conference Center adjacent to the discharge canal]

• To include 2,329,880 barrels of fuel oil tankage, associated pumping and measuring equipment, and outlying buildings.

Greens Bayou Electric Generating Station — 760 MW

12070 Beaumont Highway, Houston, Harris County, Texas 77049

• To include Fore-Bay 15 acre pond site

• To include 30” water line from Fore-Bay to cooling tower along with easement within transmission corridor from REI

• To include 1,070,163 barrels of fuel oil tankage, associated pumping and measuring equipment, truck loading/unloading facilities, and outlying buildings.

1

W. A. Parish Electric Generating Station — 1,191 MW

2500 Y.U. Jones Road, Thompson, Ft. Bend County, Texas 77481

• To include make-up water source consisting of Richmond Rice Canal and Ft. Bend County drainage rights from 15 acre pump station site to Smithers Lake/Plant boundary (approximately 13.3 miles in length)

• To include rail spur consisting of easements and fee tracts [condemnation still pending for several tracts]

• To include 153,665 barrels of fuel oil tankage, associated pumping and measuring equipment, and outlying buildings.

• To include 300 aluminum and 1,238 steel railcars that are owned and 1,063 steel railcars controlled under a long-term capital lease.

Webster Electric Generating Station — 387 MW

19301 Old Galveston Road, Webster, Harris County, Texas 77598

• To include two (2) discharge canals

T. H. Wharton Electric Generating Station — 1,254 MW

16301 Tomball Parkway (SH 249), Houston, Harris County, Texas 77004

• To include 1,204,149 barrels of fuel oil tankage, associated pumping and measuring equipment, truck loading/unloading facilities, and outlying buildings.

Limestone Electric Generating Station — 1,532 MW

Route 1, Box 85, Jewett, Limestone County, Texas 75846

• To include Conference Center on contiguous 100 acre site

• To include make-up water line and corresponding easements extending from Lake Limestone to the Plant site, a portion of which is within the REI transmission corridor

Jewitt Mine — (land and equipment)

Intersection of F.M. 39 and F.M. 80 in Limestone, Leon and Freestone Counties, Texas

• To include approximately 19,228 acres of land.

• To include draglines, bucketwheel excavator, dozers, backhoes, motor graders, pumps, front-end loaders, trucks, support equipment, tools, buildings, roads, diversions and retention ponds used in the mining and production of lignite located within the Jewett Mine permit boundary.

2

San Jacinto Steam Electric Station — 162 MW

845 Sens Road, LaPorte, Harris County, Texas 77571 (located on land owned by and leased from DuPont)

• To include 40,475 barrels of fuel oil tankage, associated pumping and measuring equipment.

South Texas Nuclear Project

30.8% undivided ownership interest in South Texas Nuclear Project Units 1 and 2 and Common Station Facilities, but excluding the substation and transmission lines

OTHER REAL ESTATE ASSETS AND CONTRACTS

Dayton Salt Dome

• Amended Gas Storage Service Contract dated April 15, 1994 between Houston Lighting & Power Company and HNG Dayton Storage.

Kinder Morgan Texas Pipeline Transportation Agreenent

• Agreement between Reliant Energy HL&P and Kinder Morgan Texas Pipeline for transportation to and from the Dayton Salt Dome.

Burlington Northern Santa Fe

• Coal Transportation Agreement dated December 30, 1999 between The Burlington Northern and Santa Fe Railway Company and Reliant Energy HL&P.

Union Pacific

• Amended and Restated Coal Transportation Agreement between union Pacific Railroad Company and Reliant Energy HL&P dated October 1, 1999

Northwestern Resources Co.

• Lignite Supply Agreement (as amended) between Northwestern Resources Co. and Utility Fuels, Inc.

• Construction and Operation Agreement between Northwestern Resources Co. and Utility Fuels, Inc.

• Settlement Agreement and Amendment of Existing Contracts between Northwestern Resources Co. and Reliant Energy, Incorporated.

The Dow Chemical Company

• Option and Agreement between The Dow Chemical Company and Houston Lignting & Power Company dated May 1, 1979.

3

Kennecott Energy

• Coal Supply Agreement (as amended) between Spring Creek Coal Company and Utility Fuels, Inc dated June 2, 1978.

• Coal Supply Agreement (as amended) between Kerr-McGee Coal Corporation and Utility Fuels, Inc. dated April 18, 1980.

Fuel Oil Pipeline — Approximately 88 miles of 12” and 18” natural gas/fuel oil pipelines connecting with T. H. Wharton, Greens Bayou, Deepwater, Webster, S. R. Bertron, P. H. Robinson, and Cedar Bayou Plants, along with right-of-way for extension to Dayton Salt Dome, inclusive of 1.4 miles of 24” natural gas pipeline at Dayton Salt Dome, barge dock facility at SR Bertron, fuel oil/natural gas injection sites inclusive of Exxon, TETCO, Red Bluff Road, Oil Tanking, GATX and Amerada Hess, along with all fuel oil/natural gas pumping and measuring equipment.

Allen’s Creek/Wallis Property — Approximately 1,700 acres in Austin County, Texas, remaining after the sale of acreage below 125 feet contour line to Brazos River Authority

Energy Development Center — 12301 Kurland, Houston, Harris County, Texas — Office building, warehouse, garage and shop on approximately 55 acres (including approximately 5 acre drainage facilities), plus 2 +/- acres on Conklin Lane

Malakoff — Approximately 3,398 acres for proposed plant site location in Henderson County, Texas, along with the surface estate in certain nearby coal lands comprising approximately 8,372 acres south of the 3,398 plant site acreage.

Mills Creek — Approximately 865 acres in ten (10) separate tracts in Austin County, Texas

4

Schedule 1.40

MRT Energy Marketing Assets and Liabilities

     The MRT Energy Marketing Assets are the assets employed in the business heretofore conducted by the MRT Energy Marketing division of RES of providing commodity sales and asset management services to approximately 90 end use and distribution customers in the midwest, primarily in the territory served by Mississippi River Transmission Corporation. These activities are conducted by approximately nine employees in St. Louis in space subleased from Mississippi River Transmission Corporation under an informal arrangement. The assets include customer contracts, with contract terms generally ranging from one to three years or subject to extension under evergreen provisions. The MRT Energy Marketing Assets also include office equipment and supplies used by the aforementioned personnel. The MRT Energy Marketing Liabilities consist of the liabilities of RES arising out of or resulting from the conduct of the business conducted by its MRT Energy Marketing Divisions, including liabilities under the contracts included in the MRT Energy Marketing Assets and employee liabilities.

     The MRT Energy Marketing Assets and the MRT Energy Marketing Liabilities, respectively, include, as of December 31, 2000, the assets and liabilities reflected in the following balance sheet:

Assets			Liabilities
Cash	$	8,313,628.36	Accounts payable	$	29,161,859.93
Accounts Receivable (before deduction of uncollectible assets)		39,058,346.57	Accounts payable (intercompany)		7,996,375.00
			Taxes		1,192,532.00

1

Schedule 1.47

Regulated Retail Assets

          The assets used in the conduct of the Regulated Retail Business, to be more particularly described in a Supplement to this Schedule 1.47 to be agreed to by REI and Resources, but in any event including the assets described in Schedule 2.2 to the Retail Agreement and desktop computers, printers and other standard office equipment used in the Regulated Retail Business.

1

Schedule 1.48

Regulated Retail Business

          The business of selling electric power and energy and associated services to retail electric customers in the service territory certificated to Reliant Energy HL&P.

1

Schedule 1.53

REI Group Companies

Name	Ownership			Domicile
RELIANT ENERGY, INCORPORATED				TEX
Subsidiaries/Affiliates:
HL&P Capital Trust I		100	%	DEL
HL&P Capital Trust II		100	%	DEL
HL&P Receivables, Inc.		100	%	DEL
Houston Industries Energy (UK), Inc.		100	%	DEL
Houston Industries FinanceCo GP, LLC		100	%	DEL
Houston Industries FinanceCo LP		99	%	DEL
Houston Industries Funding Company		100	%	DEL
Houston Industries Incorporated		100	%	TEX
Houston Lighting & Power Company		100	%	TEX
NorAm Energy Corp.		100	%	DEL
REI Trust I		100	%	DEL
REI Trust II		100	%	DEL
Reliant Energy FinanceCo II GP, LLC		100	%	DEL
Reliant Energy FinanceCo II LP		99	%	DEL
Reliant Energy FinanceCo III GP, LLC		100	%	DEL
Reliant Energy FinanceCo III LP		99	%	DEL
Reliant Energy FinanceCo IV GP, LLC		100	%	DEL
Reliant Energy FinanceCo IV LP		99	%	DEL
Reliant Energy Investment Management, Inc.		100	%	DEL
Reliant Energy Power Systems, Inc.		100	%	DEL
Reliant Energy Products, Inc.		100	%	DEL
Reliant Energy Properties, Inc.		100	%	DEL
Reliant Energy Regco, Inc.		100	%	DEL
Reliant Energy MergerCo, Inc.		100	%	DEL
Reliant Energy Tegco, Inc.		100	%	DEL
Reliant Energy Thermal Systems, Inc.		100	%	DEL
Reliant Energy Thermal Systems (Delaware), Inc.		100	%	DEL
Northwind Houston L.P.		74.61	%	DEL
Northwind Houston L.L.C.		75	%	DEL
Reliant Energy Transition Bond Company LLC		100	%	DEL
Reliant Energy Water, Inc.		100	%	DEL
Utility Rail Services, Inc.		100	%	DEL
UFI Services, Inc.		100	%	DEL
RELIANT ENERGY INTERNATIONAL, INC.		100	%	DEL
HI Energy Holdings I.B.V.		100	%	NTH
Reliant Energy Brazil Ltd.		100	%	CAY
HIE Brasil Rio Sul Ltda.		20	%	BRZ
Reliant Energy International Brasil Ltda.		99.9	%	BRZ

1

Name	Ownership			Domicile
Reliant Energy Brasil, Ltda.		99.9995	%	BRZ
Reliant Energy Brazil Tiete Ltd.		100	%	CAY
Reliant Energy Brazil Ventures Ltd.		100	%	CAY
Reliant Energy Colombia Ltd.		100	%	CAY
Reliant Energy Colombia Ltda.		99	%	COL
Reliant Energy Holdings Ltd.		100	%	CAY
Reliant Energy International II, Inc.		100	%	DEL
HIE Ford Heights, Inc.		100	%	DEL
HIE Fulton, Inc.		100	%	DEL
Reliant Energy India, Inc.		100	%	MAU
Reliant Energy Rain, Inc.		100	%	MAU
Rain Calcining Limited		24.79	%	IND
Reliant Energy International Holdings, LLC		100	%	DEL
Reliant Energy El Salvador, S.A. de C.V.		99	%	ELS
Reliant Energy International Services, Inc.		100	%	DEL
Reliant Energy Light, Inc.		100	%	DEL
Reliant Energy Cayman Holdings Ltd.		100	%	CAY
Reliant Energy Argentina S.A.		99	%	ARG
Reliant Energy Argener S.A.		51	%	ARG
Reliant Energy Opco S.A.		99.94	%	ARG
Reliant Energy Argentine Holdings Ltd.		100	%	CAY
Reliant Energy Cayman Investments Ltd.		100	%	CAY
Reliant Energy Cayman Ltd.		100	%	CAY
Reliant Energy Cayman Acquisitions Ltd.		100	%	CAY
Reliant Energy Outsource Ltd.		100	%	CAY
Venus Generation El Salvador		50	%	CAY
Reliant Energy Salvador Holding Company Ltd.		100	%	CAY
Reliant Energy Santiago del Estero, S.A.		99	%	ARG
Empresa Distribuidora de Electricidad de Santiago del Estero S.A. (“EDESE”)		90	%	ARG
Worldwide Electric Holdings B.V.		100	%	NTH
RELIANT ENERGY RESOURCES CORP.		100	%	DEL
Subsidiaries/Affiliates:
ALG Gas Supply Company		100	%	DEL
Allied Materials Corporation		100	%	TEX
Arkansas Louisiana Finance Corporation		100	%	DEL
Arkla Industries Inc.		100	%	DEL
Arkla Products Company		100	%	DEL
Blue Jay Gas Company		100	%	DEL
Entex Fuels, Inc.		100	%	TEX
Entex Gas Marketing Company		100	%	TEX

2

Name	Ownership			Domicile
Entex Gas Resources Corp.		100	%	TEX
Entex NGV, Inc.		100	%	DEL
Entex Oil & Gas Co.		100	%	TEX
Illinois Gas Transmission Company		100	%	DEL
Industrial Gas Supply Corporation		100	%	TEX
Intex, Inc.		100	%	TEX
Louisiana Unit Gas Transmission Company		100	%	TEX
Minnesota Intrastate Pipeline Company		100	%	DEL
Mississippi River Transmission Corporation		100	%	DEL
MRT Holdings, Inc.		100	%	DEL
MRT Services Company		100	%	DEL
MRT Energy Marketing Company		100	%	DEL
National Furnace Company		100	%	TEX
NorAm Financing I		100	%	DEL
NorAm Utility Services, Inc.		100	%	DEL
Reliant Energy Consumer Group, Inc.		100	%	DEL
Reliant Energy Field Services, Inc.		100	%	DEL
Reliant Energy Field Services Holdings, Inc.		100	%	DEL
Reliant Energy Gas Processing, Inc.		100	%	DEL
Reliant Energy Funds Management, Inc.		100	%	DEL
Reliant Energy Gas Transmission Company		100	%	DEL
Reliant Energy Hub Services, Inc.		100	%	DEL
Reliant Energy Intrastate Holdings, LLC		100	%	DEL
Pine Pipeline Acquisition Company, LLC		81.4	%	DEL
Reliant Energy Pipeline Services, Inc.		100	%	DEL
Reliant Energy OQ, LLC		100	%	DEL
OQ Partners, a general partnership		50	%	TEX
Reliant Energy Retail, Inc.		100	%	DEL
Reliant Energy Retail Interests, Inc.		100	%	DEL
Reliant Energy Trading and Transportation Group, Inc.		100	%	TEX
Unit Gas Transmission Company		100	%	TEX
United Gas, Inc.		100	%	TEX

3

Schedule 1.64

Resources Group Companies

Name	Ownership			Domicile
RELIANT RESOURCES, INC.		100	%	DEL
Arkla Finance Corporation		100	%	DEL
GuideStreet, Inc.		100	%	DEL
Reliant Energy Broadband, Inc.		100	%	DEL
Reliant Energy Communications, Inc.		100	%	DEL
Insync Internet Services, Incorporated		100	%	TEX
Reliant Energy Communications (Delaware), LLC		100	%	DEL
Reliant Energy Communications Networks, LP		99	%	DEL
Reliant Energy Communications (Texas), LLC		100	%	DEL
Reliant Energy Europe Trading & Marketing, Inc.		100	%	DEL
Reliant Energy Trading & Marketing, B.V.		100	%	NTH
Reliant Energy Trading & Marketing GmbH		100	%	GER
Reliant Energy Net Ventures, Inc.		100	%	DEL
Reliant Energy Retail Holdings, LLC		100	%	DEL
Reliant Energy Customer Care Services, LLC		100	%	DEL
Reliant Energy Retail Services, LLC		100	%	DEL
Reliant Energy Solutions, LLC		100	%	DEL
Reliant Energy Solutions California, Inc.		100	%	DEL
New Texas Energy Company		100	%	DEL
StarEn Power, LLC		100	%	DEL
Reliant Energy Services, Inc.		100	%	DEL
Reliant Energy Services Channelview LLC		100	%	DEL
Reliant Energy Services Desert Basin, LLC		100	%	DEL
Reliant Energy Services Holdings, Inc.		100	%	DEL
Reliant Energy Services Mid-Stream, LLC		100	%	DEL
Reliant Energy Services New Mexico, LLC		100	%	DEL
Reliant Energy Services International, Inc.		100	%	DEL
Reliant Energy Services Canada, Ltd.		100	%	CAN
Reliant Energy Trading Exchange, Inc.		100	%	DEL
Energy Platform Trading Holding Company, Inc.		16	%	DEL
Reliant Resources International Services, Inc.		100	%	DEL
Reliant Energy Ventures, Inc.		100	%	DEL
Reliant Energy Wholesale Service Company		100	%	DEL
ReliantEnergy.com, Inc.		100	%	DEL
RELIANT ENERGY POWER GENERATION, INC.		100	%	DEL
El Dorado Energy, LLC		50	%	DEL
Reliant Energy Arrow Canyon, LLC		100	%	DEL
Reliant Energy Aurora Holding Corp.		100	%	DEL
Reliant Energy Aurora I, LP		99	%	DEL
Reliant Energy Aurora II, LP		99	%	DEL

1

Name	Ownership			Domicile
Reliant Energy Aurora, LP		99	%	DEL
Reliant Energy Aurora Development Corp.		100	%	DEL
Reliant Energy Bighorn, LLC		100	%	DEL
Reliant Energy California Holdings, LLC		100	%	DEL
Reliant Energy Coolwater, LLC		100	%	DEL
Reliant Energy Ellwood, LLC		100	%	DEL
Reliant Energy Etiwanda, LLC		100	%	DEL
Reliant Energy Mandalay, LLC		100	%	DEL
Reliant Energy Ormond Beach, LLC		100	%	DEL
Reliant Energy Capital (Europe), Inc.		100	%	DEL
Reliant Energy Europe, Inc.		100	%	DEL
Reliant Energy Wholesale (Europe) Holdings B.V.		100	%	NTH
Reliant Energy Wholesale (Europe) Holdings II C.V.		99.5	%	NTH
Reliant Energy Wholesale (Europe) C.V.		99.5	%	NTH
Reliant Energy UNA B.V.		52	%	NTH
N.V. UNA		100	%	NTH
APX-Amsterdam Power Exchange		10	%	NTH
BV Antraciet Handelsvereeniging		100	%	NTH
B.V. Nederlands Elektriciteit Administratiekantoor		25	%	NTH
Demkolec B.V.		100	%	NTH
N.V. GKN		100	%	NTH
COVRA B.V.		30	%	NTH
TenneT B.V.		100	%	NTH
Electorisk NV		21	%	NTH
GKE BV		16	%	NTH
Howo GmbH		10	%	GER
KEMA NV		10	%	NTH
B.V. BPA HES-West		100	%	NTH
B.V. Business Park Arnhem		100	%	NTH
B.V. KEMA		100	%	NTH
CEBEC Registered Quality c.v.b.a.		50	%	BEL
DUtrain GmbH		60	%	GER
Geographic Information Technology, Inc.		80	%	USA
KEMA-Arbodienst B.V.		100	%	NTH
KEMA Consulting Canada Ltd.		100	%	CAN
KEMA Consulting Europe B.V.		100	%	NTH
KEMA Consulting GmbH		100	%	GER
KEMA Consulting, Inc.		100	%	USA
KEMA-ECC, Inc.		100	%	USA
KEMA-ETC A/O		100	%	RUS

2

Name	Ownership			Domicile
KEMA-GOST B.V.		50	%	NTH
KEMA-IEV GmbH		60	%	GER
KEMA Indonesie B.V.		100	%	NTH
KEMA International B.V.		100	%	NTH
KEMA International GmbH Deutschland		100	%	GER
KEMA Nederland B.V.		100	%	NTH
KEMA Nucleair B.V.		100	%	NTH
KEMA Polska Sp. z.o.o.		100	%	POL
KEMA-Powertest, Inc.		100	%	USA
KEMA-Realty LLC		100	%	USA
KEMA Registered Quality B.V.		100	%	NTH
KEMA Registered Quality Consultants B.V.		100	%	NTH
KEMA Registered Quality Czech Republic spol. r.o.		100	%	CZE
KEMA Registered Quality Hong Kong Ltd.		51	%	HK
KEMA Registered Quality, Inc.		100	%	USA
KEMA Registered Quality Italia S.r.l.		100	%	ITL
KEMA Registered Quality Polska Sp. z.o.o.		100	%	POL
KEMA Technology Czech Republic spol. r.o.		100	%	CZE
KEMA USA, Inc.		100	%	USA
Macro Corporation		100	%	USA
PT. KEMA Registered Quality Indonesia		100	%	ID
PT. KEMA Technology Indonesia		100	%	ID
NEM BV		2	%	NTH
Power Investments BV		100	%	NTH
Axima BV		45	%	NTH
Power Projects BV		50	%	NTH
Power Services BV		100	%	NTH
Power Total Maintenance BV		50	%	NTH
UNA Milieu NV		100	%	NTH
Ecosun BV		67	%	NTH
Vasim BV		15	%	NTH
Vliegasunie BV		16	%	NTH
Reliant Energy Channelview (Delaware) LLC		100	%	DEL
Reliant Energy Channelview LP		99	%	DEL
Reliant Energy Channelview (Texas) LLC		100	%	DEL
Reliant Energy Choctaw County, LLC		100	%	MS

3

Name	Ownership			Domicile
Reliant Energy Colusa County, LLC		100	%	DEL
Reliant Energy Deer Park, Inc.		100	%	DEL
Reliant Energy Desert Basin, LLC		100	%	DEL
Reliant Energy Development Services, Inc.		100	%	DEL
Reliant Energy Florida Holdings, LLC		100	%	DEL
Reliant Energy Indian River, LLC		100	%	DEL
Reliant Energy Osceola, LLC		100	%	DEL
Reliant Energy McHenry Holding Corp.		100	%	DEL
Reliant Energy McHenry I, L.P.		99	%	DEL
Reliant Energy McHenry II, L.P.		99	%	DEL
Reliant Energy McHenry County, L.P.		99	%	DEL
Reliant Energy McHenry Development Corp.		100	%	DEL
Reliant Energy Mid-Atlantic Development, Inc.		100	%	DEL
Reliant Energy Atlantic, LLC		100	%	DEL
Reliant Energy Erie West, LLC		100	%	DEL
Reliant Energy Gilbert, LLC		100	%	DEL
Reliant Energy Hunterstown, LLC		100	%	DEL
Reliant Energy Portland, LLC		100	%	DEL
Reliant Energy Seward, LLC		100	%	DEL
Reliant Energy Titus, LLC		100	%	DEL
Reliant Energy Northeast Holdings, Inc.		100	%	DEL
Reliant Energy Northeast Generation, Inc.		100	%	DEL
Reliant Energy Keystone Fuels, LLC		100	%	DEL
Reliant Energy Mid-Atlantic Power Holdings, LLC		100	%	DEL
Reliant Energy Maryland Holdings, LLC		100	%	DEL
Reliant Energy Mid-Atlantic Power Services, Inc.		100	%	DEL
Reliant Energy New Jersey Holdings, LLC		100	%	DEL
Reliant Energy Northeast Management Company		100	%	PA
Reliant Energy Power Operations I, Inc.		100	%	DEL
Reliant Energy Power Operations II, Inc.		100	%	DEL
Reliant Energy Renewables, Inc.		100	%	DEL
Reliant Energy Renewables Atascocita GP, LLC		100	%	DEL
Reliant Energy Renewables Baytown GP, LLC		100	%	DEL
Reliant Energy Renewables Blue Bonnet GP, LLC		100	%	DEL
Reliant Energy Renewables Coastal Plains GP, LLC		100	%	DEL
Reliant Energy Renewables Comal County GP, LLC		100	%	DEL
Reliant Energy Renewables Conroe GP, LLC		100	%	DEL
Reliant Energy Renewables Eastside GP, LLC		100	%	DEL
Reliant Energy Renewables Hillside GP, LLC		100	%	DEL
Reliant Energy Renewables Holdings, LLC		100	%	DEL
Reliant Energy Renewables Atascocita, LP		99	%	DEL
Reliant Energy Renewables Baytown, LP		99	%	DEL
Reliant Energy Renewables Blue Bonnet, LP		99	%	DEL
Reliant Energy Renewables Coastal Plains, LP		99	%	DEL

4

Name	Ownership			Domicile
Reliant Energy Renewables Comal County, LP		99	%	DEL
Reliant Energy Renewables Conroe, LP		99	%	DEL
Reliant Energy Renewables Eastside, LP		99	%	DEL
Reliant Energy Renewables Hillside, LP		99	%	DEL
Reliant Energy Renewables Lacy Lakeview, LP		99	%	DEL
Reliant Energy Renewables Pecan Prairie, LP		99	%	DEL
Reliant Energy Renewables Security, LP		99	%	DEL
Reliant Energy Renewables Temple, LP		99	%	DEL
Reliant Energy Renewables Williamson County, LP		99	%	DEL
Reliant Energy Renewables Lacy Lakeview GP, LLC		100	%	DEL
Reliant Energy Renewables Pecan Prairie GP, LLC		100	%	DEL
Reliant Energy Renewables Security GP, LLC		100	%	DEL
Reliant Energy Renewables Temple GP, LLC		100	%	DEL
Reliant Energy Renewables Williamson County GP, LLC		100	%	DEL
Reliant Energy Sabine (Delaware), Inc.		100	%	DEL
Sabine Cogen, LP		49	%	DEL
Reliant Energy Sabine (Texas), Inc.		100	%	DEL
Reliant Energy Shelby Holding Corp.		100	%	DEL
Reliant Energy Shelby I, LP		99	%	DEL
Reliant Energy Shelby II, LP		99	%	DEL
Reliant Energy Shelby County, LP		99	%	DEL
Reliant Energy Shelby County II, LP		99	%	DEL
Reliant Energy Shelby Development Corp.		100	%	DEL
Reliant Energy Signal Peak, LLC		100	%	DEL
Reliant Energy Sunrise, LLC		100	%	DEL

5

Schedule 1.78

Unregulated Retail Assets

Energy Supply and Services Agreement dated May 10, 2000, between Reliant Energy Retail, Inc. and the General Land Office.

Texas Retail Electric Sales Agreement dated June 30, 2000, between Reliant Energy Retail, Inc. and Baker Hughes, Incorporated.

Contracts with vendors and suppliers relating to the conduct of the Unregulated Retail Business.

1

Schedule 1.79

Unregulated Retail Businesses

Reliant Energy Retail Marketing Division

Unregulated electric marketing activities, currently provided through Reliant Energy Retail, Inc.

Engineering, procurement and construction services, currently provided through Reliant Energy Solutions, LLC

1

Schedule 2.2(g)

Stock Transferred	Consideration
Arkla Finance Corporation	$	10
Reliant Energy Services International, Inc.	$	10
Reliant Energy Europe Trading & Marketing, Inc.	$	10

1

Schedule 2.2(h)

Reliant Energy Ventures, Inc.

Reliant Energy Wholesale Service Company

Reliant Energy Trading Exchange, Inc.

GuideStreet, Inc. (73.5%)

Reliant Energy Solutions, LLC

ReliantEnergy.com, Inc.

Reliant Energy Broadband, Inc.

Reliant Energy Net Ventures, Inc.

Reliant Energy Retail Holdings, LLC

1

Schedule 2.2 (m)

Raytheon Hawker 800XP Aircraft
Serial No. 258365

Cedar Bayou Conference Center, including easements for access from public road, to spillway and for use of pond.

1

Schedule 6.2(f)

Stock of Corporations to be Distributed to Regco

Houston Industries Energy (UK), Inc.
Houston Industries Incorporated
Houston Lighting & Power Company
NorAm Energy Corp.
Reliant Energy International, Inc.
Reliant Energy Resources Corp.
Reliant Energy Power Systems, Inc.
Reliant Energy Products, Inc.
Reliant Energy Properties, Inc.
Reliant Energy Thermal Systems, Inc.
Reliant Energy Water, Inc.
Reliant Resources, Inc. (80+%)
Utility Rail Services, Inc.

1

Schedule 10.14(b)

Auction Principles

1.	Genco will offer a variety of products and services in the secondary auction so as to capture the full value of its generation assets.
2.	Genco will not withhold capacity from the market.
3.	Genco will offer a full array of ancillary services consistent with unit capability.
4.	Any capacity offered for sale but not sold in the secondary capacity auction, or any capacity entitlement not taken by the entitlement holder, may be sold by Genco at terms acceptable to it in its sole discretion.

1

Schedule 5.1(a)

Certificate of Incorporation

RESTATED CERTIFICATE OF INCORPORATION

OF

RELIANT RESOURCES, INC.

Under Sections 242 and 245 of the
Delaware General Corporation Law

          RELIANT RESOURCES, INC. (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies that:

          1. The current name of the Corporation is Reliant Resources, Inc. The name under which the Corporation was originally incorporated was Reliant Energy Unregco, Inc. The original Certificate of Incorporation of the Corporation (as heretofore amended, the “Certificate of Incorporation”) was filed with the Secretary of State of the State of Delaware on August 9, 2000.

          2. The Board of Directors of the Corporation duly adopted resolutions proposing and declaring advisable the amendments to the Certificate of Incorporation this Restated Certificate of Incorporation is effecting, and the Corporation’s sole stockholder has duly adopted those amendments, all in accordance with the provisions of Sections 228, 242 and 245 of the DGCL.

          3. This Restated Certificate of Incorporation restates and amends the Certificate of Incorporation. The amendments to the Certificate of Incorporation effected by this Restated Certificate of Incorporation include, but are not limited to, amendments to: (i) revise the definition of “Rights Declaration Date” in Section 2(a) of Division A of Article FOURTH; (ii) delete Section 4 of Division B of Article FOURTH relating to the 240,000-to-1 stock split of the Common Stock (as hereinafter defined) effected on January 5, 2001; and (iii) add Article ELEVENTH providing for an express election not to be governed by Section 203 of the DGCL until such time as no person is the beneficial owner of at least a majority of the Corporation’s voting stock.

          4. The capital of the Corporation shall not be reduced under or by reason of the foregoing amendments to the Certificate of Incorporation.

          5. The Certificate of Incorporation is hereby superseded by this Restated Certificate of Incorporation, which shall henceforth be the Certificate of Incorporation of the Corporation.

          6. The text of the Certificate of Incorporation is hereby restated and amended to read in its entirety as follows (hereinafter, this Restated Certificate of Incorporation, as it may be further amended or restated from time to time, is referred to as this “Restated Certificate of Incorporation”).

RESTATED CERTIFICATE OF INCORPORATION

          FIRST: The name of the Corporation is Reliant Resources, Inc. (hereinafter, the “Corporation”).

          SECOND: The address of the registered office of the Corporation in the State of Delaware is Corporation Trust Center, 1209 Orange Street, City of Wilmington, County of New Castle, Zip Code 19801, and the name of the registered agent of the Corporation at such address is The Corporation Trust Company.

          THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the “DGCL”).

          FOURTH: The aggregate number of shares of capital stock that the Corporation shall have authority to issue is 2,125,000,000, of which 2,000,000,000 shares are classified as common stock, par value $0.001 per share (“Common Stock”), and 125,000,000 shares are classified as preferred stock, par value $.001 per share (“Preferred Stock”).

          The Corporation may issue shares of any class or series of its capital stock from time to time for such consideration and for such corporate purposes as the Board of Directors of the Corporation (the “Board of Directors”) may from time to time determine.

          The following is a statement of the powers, preferences and rights, and the qualifications, limitations or restrictions, of the Preferred Stock and the Common Stock:

Division A. Preferred Stock

          The shares of Preferred Stock may be divided into and issued in one or more series, the relative rights, powers and preferences of which series may vary in any and all respects. The Board of Directors is expressly vested with the authority to fix, by resolution or resolutions adopted prior to and providing for the issuance of any shares of each particular series of Preferred Stock and incorporate in a certificate of designations filed with the Secretary of State of the State of Delaware, the designations, powers, preferences, rights, qualifications, limitations and restrictions thereof, of the shares of each series of Preferred Stock, to the extent not provided for in this Restated Certificate of Incorporation, and with the authority to increase or decrease the number of shares within each such series; provided, however, that the Board of Directors may not decrease the number of shares within a series of Preferred Stock below the number of shares within such series that is then issued. The authority of the Board of Directors

2

with respect to fixing the designations, powers, preferences, rights, qualifications, limitations and restrictions of each such series of Preferred Stock shall include, but not be limited to, determination of the following:

          (1) the distinctive designation and number of shares of that series;

          (2) the rate of dividends (or the method of calculation thereof) payable with respect to shares of that series, the dates, terms and other conditions upon which such dividends shall be payable, and the relative rights of priority of such dividends to dividends payable on any other class or series of capital stock of the Corporation;

          (3) the nature of the dividend payable with respect to shares of that series as cumulative, noncumulative or partially cumulative, and if cumulative or partially cumulative, from which date or dates and under what circumstances;

          (4) whether shares of that series shall be subject to redemption, and, if made subject to redemption, the times, prices, rates, adjustments and other terms and conditions of such redemption (including the manner of selecting shares of that series for redemption if fewer than all shares of such series are to be redeemed);

          (5) the rights of the holders of shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation (which rights may be different if such action is voluntary than if it is involuntary), including the relative rights of priority in such event as to the rights of the holders of any other class or series of capital stock of the Corporation;

          (6) the terms, amounts and other conditions of any sinking or similar purchase or other fund provided for the purchase or redemption of shares of that series;

          (7) whether shares of that series shall be convertible into or exchangeable for shares of capital stock or other securities of the Corporation or of any other corporation or entity, and, if provision be made for conversion or exchange, the times, prices, rates, adjustments, and other terms and conditions of such conversion or exchange;

          (8) the extent, if any, to which the holders of shares of that series shall be entitled (in addition to any voting rights provided by law) to vote as a class or otherwise with respect to the election of directors or otherwise;

          (9) the restrictions and conditions, if any, upon the issue or reissue of any additional Preferred Stock ranking on a parity with or prior to shares of that series as to dividends or upon liquidation, dissolution or winding up;

          (10) any other repurchase obligations of the Corporation, subject to any limitations of applicable law; and

          (11) any other designations, powers, preferences, rights, qualifications, limitations or restrictions of shares of that series.

3

          Any of the designations, powers, preferences, rights, qualifications, limitations or restrictions of any series of Preferred Stock may be dependent on facts ascertainable outside this Restated Certificate of Incorporation, or outside the resolution or resolutions providing for the issue of such series of Preferred Stock adopted by the Board of Directors pursuant to authority expressly vested in it by this Restated Certificate of Incorporation. Except as applicable law or this Restated Certificate of Incorporation otherwise may require, the terms of any series of Preferred Stock may be amended without consent of the holders of any other series of Preferred Stock or any class of capital stock of the Corporation.

          The relative powers, preferences and rights of each series of Preferred Stock in relation to the powers, preferences and rights of each other series of Preferred Stock shall, in each case, be as fixed from time to time by the Board of Directors in the resolution or resolutions adopted pursuant to the authority granted in this Division A of this Article FOURTH, and the consent, by class or series vote or otherwise, of holders of Preferred Stock of such of the series of Preferred Stock as are from time to time outstanding shall not be required for the issuance by the Board of Directors of any other series of Preferred Stock, whether or not the powers, preferences and rights of such other series shall be fixed by the Board of Directors as senior to, or on a parity with, the powers, preferences and rights of such outstanding series, or any of them; provided, however, that the Board of Directors may provide in such resolution or resolutions adopted with respect to any series of Preferred Stock that the consent of holders of at least a majority (or such greater proportion as shall be therein fixed) of the outstanding shares of such series voting thereon shall be required for the issuance of shares of any or all other series of Preferred Stock.

          Shares of any series of Preferred Stock shall have no voting rights except as required by law or as provided in the relative powers, preferences and rights of such series.

Series A Preferred Stock

     1. Designation and Amount. There shall be a series of Preferred Stock that shall be designated as “Series A Preferred Stock,” and the number of shares constituting such series shall be 2,000,000. Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, however, that no decrease shall reduce the number of shares of Series A Preferred Stock to less than the number of shares then issued and outstanding plus the number of shares issuable upon exercise of outstanding rights, options or warrants or upon conversion of outstanding securities issued by the Corporation.

     2. Dividends and Distributions.

     (A) Subject to the prior and superior rights of the holders of any shares of any series of Preferred Stock ranking prior and superior to the shares of Series A Preferred Stock with respect to dividends, the holders of shares of Series A Preferred Stock, in preference to the holders of shares of any class or series of stock of the Corporation ranking junior to the Series A Preferred Stock, shall be entitled to receive, when, as and if declared by the Board of Directors out of assets of the Corporation legally available for the purpose, quarterly dividends payable in cash on the first day of January, April, July and October in each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a)

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$10.00 or (b) the Adjustment Number (as defined below) times the aggregate per share amount of all cash dividends, and the Adjustment Number times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock, since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Preferred Stock. The “Adjustment Number” shall initially be 1,000. In the event the Corporation shall at any time after April 27, 2001 (the “Rights Declaration Date”) (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

     (B) The Corporation shall declare a dividend or distribution on the Series A Preferred Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $10.00 per share on the Series A Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.

     (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof.

     3. Voting Rights. The holders of shares of Series A Preferred Stock shall have the following voting rights:

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     (A) Each share of Series A Preferred Stock shall entitle the holder thereof to a number of votes equal to the Adjustment Number on all matters submitted to a vote of the stockholders of the Corporation.

     (B) Except as otherwise provided in this Restated Certificate of Incorporation or by law, the holders of shares of Series A Preferred Stock, the holders of shares of any other class or series entitled to vote with the Common Stock and the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.

     (C)(i) If at any time dividends on any Series A Preferred Stock shall be in arrears in an amount equal to six quarterly dividends thereon, the occurrence of such contingency shall mark the beginning of a period (herein called a “default period”) that shall extend until such time when all accrued and unpaid dividends for all previous quarterly dividend periods and for the current quarterly dividend period on all shares of Series A Preferred Stock then outstanding shall have been declared and paid or set apart for payment. During each default period, (1) the number of directors shall be increased by two, effective as of the time of election of such directors as herein provided, and (2) the holders of Preferred Stock (including holders of the Series A Preferred Stock) upon which these or like voting rights have been conferred and are exercisable (the “Voting Preferred Stock”) with dividends in arrears in an amount equal to six quarterly dividends thereon, voting as a class, irrespective of series, shall have the right to elect such two directors.

     (ii) During any default period, such voting right of the holders of Series A Preferred Stock may be exercised initially at a special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of stockholders, and thereafter at annual meetings of stockholders, provided that such voting right shall not be exercised unless the holders of at least thirty three and one-third percent (33 1/3%) of the shares of Voting Preferred Stock outstanding shall be present in person or by proxy. The absence of a quorum of the holders of Common Stock shall not affect the exercise by the holders of Voting Preferred Stock of such voting right.

     (iii) Unless the holders of Voting Preferred Stock shall, during an existing default period, have previously exercised their right to elect directors, the Board of Directors may order, or any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Voting Preferred Stock outstanding, irrespective of series, may request, the calling of a special meeting of the holders of Voting Preferred Stock, which meeting shall thereupon be called by the Chairman, the President, a Vice President or the Corporate Secretary of the Corporation. Notice of such meeting and of any annual meeting at which holders of Voting Preferred Stock are entitled to vote pursuant to this paragraph (C)(iii) shall be given to each holder of record of Voting Preferred Stock by mailing a copy of such notice to him at his last address as the same appears on the books of the Corporation. Such meeting shall be called for a time not earlier than 20 days and not later than 60 days after such order or request or, in default of the calling of such meeting within 60 days after such order or request, such meeting may be called on similar notice by any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Voting Preferred Stock outstanding. Notwithstanding the provisions of this paragraph (C)(iii), no such special meeting shall be called during the period within 60 days immediately preceding the date fixed for the next annual meeting of the stockholders.

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     (iv) In any default period, after the holders of Voting Preferred Stock shall have exercised their right to elect directors voting as a class, (x) the directors so elected by the holders of Voting Preferred Stock shall continue in office until their successors shall have been elected by such holders or until the expiration of the default period, and (y) any vacancy in the Board of Directors may be filled by vote of a majority of the remaining directors theretofore elected by the holders of the class or classes of stock which elected the director whose office shall have become vacant. References in this paragraph (C) to directors elected by the holders of a particular class or classes of stock shall include directors elected by such directors to fill vacancies as provided in clause (y) of the foregoing sentence.

     (v) Immediately upon the expiration of a default period, (x) the right of the holders of Voting Preferred Stock as a class to elect directors shall cease, (y) the term of any directors elected by the holders of Voting Preferred Stock as a class shall terminate and (z) the number of directors shall be such number as may be provided for in this Restated Certificate of Incorporation or the Bylaws of the Corporation irrespective of any increase made pursuant to the provisions of paragraph (C) of this Section 3 (such number being subject, however, to change thereafter in any manner provided by law or in this Restated Certificate of Incorporation or the Bylaws of the Corporation). Any vacancies in the Board of Directors effected by the provisions of clauses (y) and (z) in the preceding sentence may be filled by a majority of the remaining directors.

     (D) Except as set forth herein, holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.

     4. Certain Restrictions.

     (A) Whenever quarterly dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Preferred Stock outstanding shall have been paid in full, the Corporation shall not:

(i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock;

(ii) declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; or

(iii) redeem or purchase or otherwise acquire for consideration any shares of Series A Preferred Stock, or any shares of stock ranking on a parity with the Series A Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of Series A Preferred Stock, or to all

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such holders and the holders of any such shares ranking on a parity therewith, upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative power, preferences and rights of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.

     (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of capital stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner.

     5. Reacquired Shares. Any shares of Series A Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to any conditions and restrictions on issuance set forth in this Restated Certificate of Incorporation.

     6. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock unless, prior thereto, the holders of shares of Series A Preferred Stock shall have received $1,000 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the “Series A Liquidation Preference”). Following the payment of the full amount of the Series A Liquidation Preference, no additional distributions shall be made to the holders of shares of Series A Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the “Common Adjustment”) equal to the quotient obtained by dividing (i) the Series A Liquidation Preference by (ii) the Adjustment Number. Following the payment of the full amount of the Series A Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series A Preferred Stock and Common Stock, respectively, holders of Series A Preferred Stock and holders of shares of Common Stock shall, subject to the prior rights of all other series of Preferred Stock, if any, ranking prior thereto, receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to 1 with respect to such Series A Preferred Stock and Common Stock, on a per share basis, respectively.

     (B) In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation preferences of all other series of Preferred Stock, if any, that rank on a parity with the Series A Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Common Stock.

     (C) Neither the merger or consolidation of the Corporation into or with another corporation nor the merger or consolidation of any other corporation into or with the Corporation shall be deemed to be a liquidation, dissolution or winding up of the Corporation within the

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meaning of this Section 6, but the sale, lease or conveyance of all or substantially all of the Corporation’s assets shall be deemed to be a liquidation, dissolution or winding up of the Corporation within the meaning of this Section 6.

     7. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series A Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share equal to the Adjustment Number times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged.

     8. Redemption. (A) The Corporation, at its option, may redeem shares of the Series A Preferred Stock in whole at any time and in part from time to time, at a redemption price equal to the Adjustment Number times the current per share market price (as such term is hereinafter defined) of the Common Stock on the date of the mailing of the notice of redemption, together with unpaid accumulated dividends to the date of such redemption. The “current per share market price” on any date shall be deemed to be the average of the closing price per share of such Common Stock for the ten consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the current per share market price of the Common Stock is determined during a period following the announcement of (A) a dividend or distribution on the Common Stock other than a regular quarterly cash dividend or (B) any subdivision, combination or reclassification of such Common Stock and the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, shall not have occurred prior to the commencement of such ten Trading Day period, then, and in each such case, the current per share market price shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sales price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange, or, if the Common Stock is not listed or admitted to trading on the New York Stock Exchange, on the principal national securities exchange on which the Common Stock is listed or admitted to trading, or, if the Common Stock is not listed or admitted to trading on any national securities exchange but sales price information is reported for such security, as reported by the National Association of Securities Dealers, Inc. Automated Quotations System (“Nasdaq”) or such other self-regulatory organization or registered securities information processor (as such terms are used under the Securities Exchange Act of 1934, as amended) that then reports information concerning the Common Stock, or, if sales price information is not so reported, the average of the high bid and low asked prices in the over-the-counter market on such day, as reported by Nasdaq or such other entity, or, if on any such date the Common Stock is not quoted by any such entity, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board of Directors. If on any such date no such market maker is making a market in the Common Stock, the fair value of the Common Stock on such date as determined in good faith by the Board of Directors shall be used. The term “Trading Day” shall mean a day on which the principal national securities exchange on which the Common Stock is listed or admitted to trading is open for the transaction of business, or, if the Common Stock is not listed

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or admitted to trading on any national securities exchange but is quoted by Nasdaq, a day on which Nasdaq reports trades, or, if the Common Stock is not so quoted, a Monday, Tuesday, Wednesday, Thursday or Friday on which banking institutions in the State of New York or Texas are not authorized or obligated by law or executive order to close.

     (B) In the event that fewer than all of the outstanding shares of the Series A Preferred Stock are to be redeemed, the number of shares to be redeemed shall be determined by the Board of Directors and the shares to be redeemed shall be determined by lot or pro rata as may be determined by the Board of Directors or by any other method that may be determined by the Board of Directors in its sole discretion to be equitable.

     (C) Notice of any such redemption shall be given by mailing to the holders of the shares of Series A Preferred Stock to be redeemed a notice of such redemption, first class postage prepaid, not later than the fifteenth day and not earlier than the sixtieth day before the date fixed for redemption, at their last address as the same shall appear upon the books of the Corporation. Each such notice shall state: (i) the redemption date; (ii) the number of shares to be redeemed and, if fewer than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder; (iii) the redemption price; (iv) the place or places where certificates for such shares are to be surrendered for payment of the redemption price; and (v) that dividends on the shares to be redeemed will cease to accrue on the close of business on such redemption date. Any notice that is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the stockholder received such notice, and failure duly to give such notice by mail, or any defect in such notice, to any holder of Series A Preferred Stock shall not affect the validity of the proceedings for the redemption of any other shares of Series A Preferred Stock that are to be redeemed. On or after the date fixed for redemption as stated in such notice, each holder of the shares called for redemption shall surrender the certificate evidencing such shares to the Corporation at the place designated in such notice and shall thereupon be entitled to receive payment of the redemption price. If fewer than all the shares represented by any such surrendered certificate are redeemed, a new certificate shall be issued representing the unredeemed shares.

     (D) The shares of Series A Preferred Stock shall not be subject to the operation of any purchase, retirement or sinking fund.

     9. Ranking. The Series A Preferred Stock shall rank junior to all other series of Preferred Stock (other than any such series of Preferred Stock the terms of which shall provide otherwise) in respect to dividend and liquidation rights, and shall rank senior to the Common Stock as to such matters.

     10. Amendment. At any time that any shares of Series A Preferred Stock are outstanding, this Restated Certificate of Incorporation shall not be amended in any manner which would materially alter or change the powers, preferences or special rights of the Series A Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at least sixty six and two-thirds percent (66²/3%) of the outstanding shares of Series A Preferred Stock, voting separately as a class.

     11. Fractional Shares. Series A Preferred Stock may be issued in fractions of a share that shall entitle the holder, in proportion to such holder’s fractional shares, to exercise voting

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rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Preferred Stock.

Division B. Common Stock

     1. Dividends. Dividends may be paid on the Common Stock, as the Board of Directors shall from time to time determine, out of any assets of the Corporation available for such dividends after full cumulative dividends on all outstanding shares of capital stock of all series ranking senior to the Common Stock in respect of dividends and liquidation rights (referred to in this Division B as “stock ranking senior to the Common Stock”) have been paid, or declared and a sum sufficient for the payment thereof set apart, for all past quarterly dividend periods, and after or concurrently with making payment of or provision for dividends on the stock ranking senior to the Common Stock for the then current quarterly dividend period.

     2. Distribution of Assets. In the event of any liquidation, dissolution or winding up of the Corporation, or any reduction or decrease of its capital stock resulting in a distribution of assets to the holders of the Common Stock, after there shall have been paid to or set aside for the holders of the stock ranking senior to the Common Stock the full preferential amounts to which they are respectively entitled, the holders of the Common Stock shall be entitled to receive, pro rata, all of the remaining assets of the Corporation available for distribution to its stockholders. The Board of Directors, by vote of a majority of the members thereof, may distribute in kind to the holders of the Common Stock such remaining assets of the Corporation, or may sell, transfer or otherwise dispose of all or any of the remaining property and assets of the Corporation to any other corporation or other purchaser and receive payment therefor wholly or partly in cash or property, and/or in stock of any such corporation, and/or in obligations of such corporation or other purchaser, and may sell all or any part of the consideration received therefor and distribute the same or the proceeds thereof to the holders of the Common Stock.

     3. Voting Rights. Subject to the voting rights expressly conferred under prescribed conditions upon the stock ranking senior to the Common Stock, the holders of the Common Stock shall exclusively possess full voting power for the election of directors and for all other purposes.

Division C. Other Provisions Applicable to the Corporation’s Capital Stock

     1. Preemptive Rights. No holder of any stock of the Corporation shall be entitled as of right to purchase or subscribe for any part of any unissued or treasury stock of the Corporation, or of any additional stock of any class, to be issued by reason of any increase of the authorized capital stock of the Corporation, or to be issued from any unissued or additionally authorized stock, or of bonds, certificates of indebtedness, debentures or other securities convertible into stock of the Corporation, but any such unissued or treasury stock, or any such additional authorized issue of new stock or securities convertible into stock, may be issued and disposed of by the Board of Directors to such persons, firms, corporations or associations, and upon such terms as the Board of Directors may, in its discretion, determine, without offering to the stockholders then of record, or any class of stockholders, any thereof, on the same terms or any terms.

     2. Votes Per Share. Any stockholder of the Corporation having the right to vote at any meeting of the stockholders or of any class or series thereof, shall be entitled to one vote for

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each share of stock held by him, provided that no holder of Common Stock shall be entitled to cumulate his votes for the election of one or more directors or for any other purpose.

          FIFTH: (a) Directors. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. In addition to the authority and powers conferred on the Board of Directors by the DGCL or by the other provisions of this Restated Certificate of Incorporation, the Board of Directors is authorized and empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject to the provisions of the DGCL, this Restated Certificate of Incorporation and the Bylaws of the Corporation; provided, however, that no Bylaws hereafter adopted, or any amendments thereto, shall invalidate any prior act of the Board of Directors that would have been valid if such Bylaws or amendment had not been adopted.

          (b) Number, Election and Terms of Directors. The number of directors which shall constitute the whole Board of Directors shall be fixed from time to time by a majority of the directors then in office, subject to an increase in the number of directors by reason of any provisions contained in or established pursuant to Article FOURTH, but in any event shall not be less than one nor more than 15. Effective upon and commencing as of the date on which REI shall first cease to own, either directly or indirectly, at least a majority of the then issued and outstanding shares of Common Stock (such date hereinafter referred to as the “Trigger Date”), the directors, other than those who may be elected by the holders of any series of Preferred Stock, shall be divided into three classes: Class I, Class II and Class III. As used in this Restated Certificate of Incorporation, “REI” shall mean Reliant Energy, Incorporated, a Texas corporation (“Reliant Energy”), any successor to Reliant Energy by means of reorganization, merger, consolidation, conveyance or transfer or any ultimate parent company of Reliant Energy. Such classes shall be as nearly equal in number of directors as possible. Each director shall serve for a term ending on the third annual meeting of stockholders following the annual meeting of stockholders at which that director was elected; provided, however, that the directors first designated as Class I directors shall serve for a term expiring at the annual meeting of stockholders next following the date of their designation as Class I directors, the directors first designated as Class II directors shall serve for a term expiring at the second annual meeting of stockholders next following the date of their designation as Class II directors, and the directors first designated as Class III directors shall serve for a term expiring at the third annual meeting of stockholders next following the date of their designation as Class III directors. Each director shall hold office until the annual meeting of stockholders at which that director’s term expires and, the foregoing notwithstanding, shall serve until his successor shall have been duly elected and qualified or until his earlier death, resignation or removal.

          At each annual election, the directors chosen to succeed those whose terms then expire shall be of the same class as the directors they succeed, unless, by reason of any intervening changes in the authorized number of directors, the Board of Directors shall have designated one or more directorships whose term then expires as directorships of another class in order to more nearly achieve equality of number of directors among the classes.

          In the event of any change in the authorized number of directors, each director then continuing to serve as such shall nevertheless continue as a director of the class of which he is a member until the expiration of his current term, or his prior death, resignation or removal.

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The Board of Directors shall specify the class to which a newly created directorship shall be allocated.

          Election of directors need not be by written ballot unless the Bylaws of the Corporation so provide.

          (c) Removal of Directors. Effective upon and commencing as of the Trigger Date, no director of the Corporation may be removed from office as a director by vote or other action of the stockholders or otherwise except for cause, and then only by the affirmative vote of the holders of at least a majority of the voting power of all outstanding shares of capital stock of the Corporation generally entitled to vote in the election of directors, voting together as a single class. Except as applicable law otherwise provides, cause for the removal of a director shall be deemed to exist only if the director whose removal is proposed: (i) has been convicted, or has been granted immunity to testify in any proceeding in which another has been convicted, of a felony by a court of competent jurisdiction and that conviction is no longer subject to direct appeal; (ii) has been found to have been negligent or guilty of misconduct in the performance of his duties to the Corporation in any matter of substantial importance to the Corporation by (A) the affirmative vote of at least 80% of the directors then in office at any meeting of the Board of Directors called for that purpose or (B) a court of competent jurisdiction; or (iii) has been adjudicated by a court of competent jurisdiction to be mentally incompetent, which mental incompetency directly affects his ability to serve as a director of the Corporation. Notwithstanding the foregoing, whenever holders of outstanding shares of one or more series of Preferred Stock are entitled to elect members of the Board of Directors pursuant to the provisions applicable in the case of arrearages in the payment of dividends or other defaults contained in this Restated Certificate of Incorporation or the Board of Directors’ resolution providing for the establishment of any series of Preferred Stock, any such director of the Corporation so elected may be removed in accordance with the provisions of this Restated Certificate of Incorporation or that Board of Directors’ resolution.

          (d) Vacancies. Except as a Board of Directors’ resolution providing for the establishment of any series of Preferred Stock may provide otherwise, newly created directorships resulting from any increase in the number of directors and any vacancies on the Board of Directors resulting from death, resignation, removal, disqualification or other cause shall be filled by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the class of directors in which the new directorship was created or the vacancy occurred and until that director’s successor shall have been elected and qualified or until his earlier death, resignation or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

          (e) Amendment of this Article FIFTH. In addition to any other affirmative vote required by applicable law, this Article FIFTH may not be amended, modified or repealed except by the affirmative vote of the holders of at least sixty six and two-thirds percent (66²/3%) of the voting power of all outstanding shares of capital stock of the Corporation generally entitled to vote in the election of directors, voting together as a single class.

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          SIXTH: (a) Action by Written Consent; Special Meetings. Effective upon and commencing as of the Trigger Date, no action required to be taken or that may be taken at any annual or special meeting of the stockholders of the Corporation may be taken without a meeting, and the power of the stockholders of the Corporation to consent in writing to the taking of any action by written consent without a meeting is specifically denied. Unless otherwise provided by the DGCL, by this Restated Certificate of Incorporation or by any provisions established pursuant to Article FOURTH hereof with respect to the rights of holders of one or more outstanding series of Preferred Stock, effective upon and commencing as of the Trigger Date, special meetings of the stockholders of the Corporation may be called at any time only by the Chairman of the Board of Directors, the President and Chief Executive Officer of the Corporation, or by the Board of Directors pursuant to a resolution approved by the affirmative vote of at least a majority of the members of the Board of Directors, and no such special meeting may be called by any other person or persons.

               (b) Amendment of this Article SIXTH. In addition to any other affirmative vote required by applicable law, this Article SIXTH may not be amended, modified or repealed except by the affirmative vote of the holders of at least sixty six and two-thirds percent (66²/3%) of the voting power of all outstanding shares of capital stock of the Corporation generally entitled to vote in the election of directors, voting together as a single class.

          SEVENTH: No director of the Corporation shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director of the Corporation; provided, however, that this Article SEVENTH shall not eliminate or limit the liability of such a director (1) for any breach of such director’s duty of loyalty to the Corporation or its stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) under Section 174 of the DGCL, as the same exists or as such provision may hereafter be amended, supplemented or replaced, or (4) for any transactions from which such director derived an improper personal benefit. If the DGCL is amended after the filing of this Restated Certificate of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation, in addition to the limitation on personal liability provided herein, shall be limited to the fullest extent permitted by such law, as so amended. Any repeal or modification of this Article SEVENTH by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director of the Corporation existing at the time of such repeal or modification.

          EIGHTH: (a) Certain Acknowledgments; Certain Fiduciary Duties. In anticipation (i) that the Corporation will cease to be a wholly owned subsidiary of REI, but that REI will remain a stockholder of the Corporation and have continued contractual, corporate and business relations with the Corporation, and in anticipation that the Corporation and REI may enter into contracts and/or otherwise transact business with each other and that the Corporation may derive benefits therefrom, (ii) that directors, officers and/or employees of REI and/or of its Affiliated Companies (as hereinafter defined) may serve as directors and/or officers of the Corporation, (iii) that REI and/or its Affiliated Companies engage and are expected to continue to engage in the same, similar or related lines of business as those in which the Corporation, directly or indirectly, may engage and/or other business activities in each case that may overlap

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with or compete with those in which the Corporation and its Affiliated Companies, directly or indirectly, may engage, and that REI and/or its Affiliated Companies may compete with the Corporation in any of such business lines and/or business activities and with respect to business opportunities relating to any such business lines and/or business activities, (iv) that the Corporation and its Affiliated Companies may engage in material business transactions with REI and its Affiliated Companies, and (v) that, as a consequence of the foregoing, it is in the best interests of the Corporation that the respective rights and duties of the Corporation and of REI and their Affiliated Companies, and the duties of any directors, officers or employees of the Corporation who are also directors, officers or employees of REI or its Affiliated Companies, be determined and delineated in respect of any transactions between, or opportunities that may be suitable for, both the Corporation and its Affiliated Companies, on the one hand, and REI and its Affiliated Companies, on the other hand, the provisions of this Article EIGHTH shall regulate and define the conduct of certain of the business and affairs of the Corporation in relation to REI and its Affiliated Companies. Any contract or business relation that does not comply with the procedures set forth in this Article EIGHTH, shall not by reason thereof be deemed void or voidable or unfair or result in any breach of fiduciary duty or duty of loyalty or failure to act in good faith or in the best interests of the Corporation or constitute derivation of any improper personal benefit, but shall be governed by the provisions of this Restated Certificate of Incorporation, the Bylaws of the Corporation, the DGCL and other applicable law.

          (b) Certain Agreements and Transactions Permitted. No contract, agreement, arrangement or transaction (or any amendment, modification or termination thereof) between the Corporation and REI or between the Corporation and one or more of the directors or officers of the Corporation, REI, or any of its Affiliated Companies or between the Corporation and any Affiliated Company shall be void or voidable or be considered to be unfair to the Corporation solely for the reason that REI, any Affiliated Company, or any one or more of the officers or directors of the Corporation, REI, or any Affiliated Company are parties thereto, or because any such directors or officers are present at or participate in any meeting of the Board of Directors or committee thereof which authorizes the contract, agreement, arrangement, or transaction (or the amendment, modification or termination thereof), or because his, her or their votes are counted for such purpose. Further, no such contract, agreement or arrangement (or the amendment, modification or termination thereof), or the performance thereof by the Corporation or by REI, or by any Affiliated Company thereof, shall be considered to be for any of the foregoing reasons contrary to (x) any fiduciary duty that REI or any Affiliated Company thereof may owe to the Corporation or any Affiliated Company thereof or to any stockholder or other owner of an equity interest in the Corporation or any Affiliated Company thereof by reason of REI or any Affiliated Company thereof being a controlling stockholder of the Corporation or participating in the control of the Corporation or of any Affiliated Company thereof; or (y) any fiduciary duty of any director or officer of the Corporation or of any Affiliated Company thereof who is also a director, officer or employee of REI or any Affiliated Company thereof to the Corporation or such Affiliated Company, or to any stockholder thereof; and REI, any Affiliated Company, and such directors and officers shall be deemed to have acted in good faith and in a manner such persons reasonably believe to be in and not opposed to the best interests of the Corporation and shall be deemed not to have breached their duties of loyalty to the Corporation and its stockholders and not to have derived an improper personal benefit therefrom, if any of the following conditions shall have been satisfied:

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     (i) such contract, agreement, arrangement or transaction (or the amendment, modification or termination thereof) shall have been entered into before the Corporation ceased to be a wholly owned subsidiary of REI and continued in effect in respect of any such transaction or opportunity after such time; or

     (ii) the material facts as to the contract, agreement, arrangement or transaction (or the amendment, modification or termination thereof) are disclosed or are known to the Board of Directors or the committee thereof which authorizes the contract, agreement, arrangement or transaction (or the amendment, modification or termination thereof), and the Board of Directors or such committee authorizes and approves the contract, agreement, arrangement or transaction (or the amendment, modification or termination thereof) (a) by the affirmative vote of a majority of the directors who are not Interested Persons (as hereinafter defined) in respect of such contract, agreement, arrangement, transaction, amendment, modification or termination, even though the disinterested directors be less than a quorum; (b) by the affirmative vote of a majority of the members of a committee constituted solely of members who are not Interested Persons in respect of such contract, agreement, arrangement, transaction, amendment, modification or termination or (c) by one or more officers or employees of the Corporation (including officers or employees of the Corporation acting as directors, officers, trustees, partners or members of, or in any similar capacity on behalf of, any Affiliated Company of the Corporation) who in each case is not an Interested Person in respect of such contract, agreement, arrangement, transaction, amendment, modification or termination and to whom the authority to approve such contract, agreement, arrangement, transaction, amendment, modification or termination has been delegated either by the Board of Directors by the same affirmative vote required by subclause (a) of this subparagraph for approval of such contract, agreement, arrangement, transaction, amendment, modification or termination by the Board of Directors or by a committee of the Board of Directors constitute as provided by and acting by the same affirmative vote as required by subclause (b) of this subparagraph for approval of such contract, agreement, arrangement, transaction, amendment, modification or termination by such committee or, in the case of an employee, to whom such authority has been delegated by an officer to whom authority to approve such contract, agreement, arrangement, transaction, amendment, modification or termination has been so delegated; or

     (iii) the material facts as to the contract, agreement, arrangement or transaction (or the amendment, modification or termination thereof) are disclosed or are known to the holders of voting stock entitled to vote thereon, and the contract, agreement, arrangement, or transaction (or the amendment, modification or termination thereof) is approved by vote of the holders of a majority of the voting power of all outstanding shares of capital stock of the Corporation generally entitled to vote in the election of directors not owned by REI or an Affiliated Company, as the case may be; or

     (iv) such contract, agreement, arrangement or transaction (or the amendment, modification or termination thereof) is fair as to the Corporation as of the time it is authorized, approved or ratified by the Board of Directors, a committee thereof or the stockholders of the Corporation; or

     (v) in the case of any such transaction that was not entered into in the performance of a contract, agreement, arrangement or transaction (or the amendment, modification or

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termination thereof) that satisfied the requirements of clauses (i), (ii), (iii) or (iv) of this sentence, such transaction shall have been approved or ratified by (a) the Board of Directors by the affirmative vote of a majority of the members (even though less than a quorum) who are not Interested Persons in respect of such transaction or (b) by a committee of the Board of Directors constituted solely of members who are not Interested Persons in respect of such transaction or (c) by one or more officers or employees of the Corporation (including officers or employees of the Corporation acting as directors, officers, trustees, partners or members of, or in any similar capacity on behalf of, any Affiliated Company of the Corporation) who in each case is not an Interested Person in respect of such transaction and to whom the authority to approve such transaction has been delegated either by the Board of Directors by the same affirmative vote required by subclause (a) of this subparagraph for approval of such transaction of the Board of Directors or a committee of the Board of Directors constituted as provided by and acting by the same affirmative vote as required by subclause (b) of this subparagraph for approval of such transaction by such committee or, in the case of an employee, to whom such authority has been delegated by an officer to whom authority to approve such transaction has been so delegated; provided, however, that, before such approval or ratification, the material facts of the relationship between the Corporation or such Affiliated Company thereof, on the one hand, and REI or such Affiliated Company thereof, on the other hand, and the material facts as to such transaction were disclosed to or were known by the members of the Board of Directors or of such committee or the officer or officers or employee or employees who acted on approval or ratification of such transaction, as the case may be; or

     (vi) in the case of any such transaction that was not entered into in the performance of a contract, agreement, arrangement or transaction (or the amendment, modification or termination thereof) that satisfied the requirements of clause (i), (ii), (iii) or (iv) of this sentence, such transaction was fair to the Corporation as of the time it was entered into by the Corporation; or

     (vii) in the case of any such transaction that was not entered into in the performance of a contract, agreement, arrangement or transaction (or the amendment, modification or termination thereof) that satisfied the requirements of clause (i), (ii), (iii) or (iv) of this sentence, such transaction was approved or ratified by the affirmative vote of the holders of a majority of the shares of capital stock of the Corporation entitled to vote thereon and who do vote thereon, exclusive of REI and any Affiliated Company thereof and any Interested Person in respect of such transaction.

          Neither REI nor any Affiliated Company thereof, as a stockholder of the Corporation or participant in control of the Corporation, shall have or be under any fiduciary duty to refrain from entering into any contract, agreement, arrangement or transaction (or the amendment, modification or termination thereof) or participating in any transaction that meets the requirements of any of clauses (i), (ii), (iii), (iv), (v), (vi) or (vii) of the immediately preceding sentence and no director, officer or employee of the Corporation who is also a director, officer or employee of REI or any Affiliated Company thereof shall have or be under any fiduciary duty to the Corporation to refrain from acting on behalf of the Corporation or any Affiliated Company thereof in respect of any such contract, agreement, arrangement or transaction (or the amendment, modification or termination thereof) or performing any such contract, agreement, arrangement or transaction (or the amendment, modification or termination

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thereof) in accordance with its terms. Directors of the Corporation who are also directors or officers of REI or any Affiliated Company may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract, agreement, arrangement, or transaction (or the amendment, modification or termination thereof). Capital stock of the Corporation owned by REI and any Affiliated Companies thereof may be counted in determining the presence of a quorum at a meeting of stockholders which authorizes the contract, agreement, arrangement or transaction (or the amendment, modification or termination thereof). Any person purchasing or otherwise acquiring any shares of capital stock of the Corporation, or any interest therein, shall be deemed to have notice of and to have consented to the provisions of this Article EIGHTH. The failure of any contract, agreement, arrangement or transaction (or the amendment, modification or termination thereof) between the Corporation or an Affiliated Company thereof, on the one hand, and REI or an Affiliated Company thereof, on the other hand, to satisfy the requirements of this Article EIGHTH shall not, by itself, cause such contract, agreement, arrangement or transaction (or the amendment, modification or termination thereof) to constitute any breach of any fiduciary duty to the Corporation or to any Affiliated Company thereof, or any to stockholder or other owner of an equity interest therein, by any controlling stockholder of the Corporation or such Affiliated Company thereof or by any director or officer of the Corporation.

          For purposes of this Article EIGHTH, any contract, agreement, arrangement, or transaction (or amendment, modification, or termination thereof) with any corporation, partnership, joint venture, association, or other entity in which the Corporation owns (directly or indirectly) 50% or more of the outstanding voting stock, voting power, partnership interests, or similar ownership interest, or with any officer or director thereof, shall be deemed to be a contract, agreement, arrangement or transaction with the Corporation.

          (c) Certain Corporate Opportunities. REI and/or its Affiliated Companies shall have no duty to refrain from engaging in the same or similar activities or lines of business as the Corporation, and except as provided below, neither REI and/or its Affiliated Companies nor any officer, director or employee thereof shall be liable to the Corporation or its stockholders for breach of any fiduciary duty by reason of any such activities of REI and/or its Affiliated Companies or of such person. In the event that REI acquires knowledge of a potential transaction or matter which may be a corporate opportunity for both REI (and/or its Affiliated Companies) and the Corporation (and/or its Affiliated Companies), REI shall have no duty to communicate or offer such corporate opportunity to the Corporation and/or its Affiliated Companies and shall not be liable to the Corporation or its stockholders for breach of any fiduciary duty as a stockholder of the Corporation by reason of the fact that REI pursues or acquires such corporate opportunity for itself or for its Affiliated Companies, directs such corporate opportunity to another person (including one or more of its Affiliated Companies), or does not communicate information regarding such corporate opportunity to the Corporation.

          Similarly, in the event that a director or officer of the Corporation (and/or one or more of its Affiliated Companies), who is also a director or officer of REI and/or one or more of its Affiliated Companies, acquires knowledge of a potential transaction or matter which may be a corporate opportunity for both the Corporation (and/or one or more of its Affiliated Companies) and REI (and/or one or more of its Affiliated Companies), such director or officer shall have no duty to communicate or offer such corporate opportunity to the Corporation and/or its Affiliated Companies and shall not be liable to the Corporation or its stockholders for breach of any

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fiduciary duty as a director or officer of the Corporation by reason of the fact that REI pursues or acquires such corporate opportunity for itself or for its Affiliated Companies, directs such corporate opportunity to another person (including one or more of its Affiliated Companies), or does not communicate information regarding such corporate opportunity to the Corporation.

          (d) Certain Definitions. For purposes of this Article EIGHTH, the following definitions shall apply:

          “Affiliated Company” shall mean in respect of REI, any corporation, limited liability company, partnership, association, joint-stock company or business trust which is controlled by REI, controls REI or is under common control with REI (other than the Corporation and any company that is controlled by the Corporation), and in respect of the Corporation shall mean any company controlled by the Corporation.

          “company” shall mean any corporation, limited liability company, partnership, association, joint-stock company, business trust or other legal entity.

          “Interested Person” in respect of an agreement or transaction referred to in this Article EIGHTH shall mean any director, officer or employee of REI or an Affiliated Company thereof and any person who has a financial interest that is material to such person in REI or such Affiliated Company or otherwise has a personal financial interest that is material to such person in such agreement or transaction; provided, however, that no such financial interest shall be considered material by reason of a person’s ownership of securities of REI or an Affiliated Company thereof, if such ownership of securities has been determined in good faith not to be reasonably likely to influence such individual’s decision on behalf of the Corporation or an Affiliated Company thereof in respect of the contract, agreement, arrangement or transaction (or the amendment, modification or termination thereof) either in the specific instance by, or pursuant to a policy adopted by, the Board of Directors by the affirmative vote of a majority of the members (even though less than a quorum) who are not directors, officers or employees of REI or any Affiliated Company thereof or a committee of the Board of Directors of the Corporation constituted solely of members who are not directors, officers or employees of REI or any Affiliated Company thereof by the affirmative vote of a majority of such committee.

          The provisions of this Article EIGHTH shall have no further force or effect at such time as REI and any company controlling, controlled by or under common control with REI shall first cease to be the owner, in the aggregate, of stock representing twenty percent (20%) or more of the voting power of all outstanding shares of capital stock of the Corporation generally entitled to vote in the election of directors, voting together as a single class; provided, however, that such termination shall not terminate the effect of such provisions with respect to (i) any contract, agreement, arrangement or transaction (or the amendment, modification or termination thereof) between the Corporation or an Affiliated Company thereof and REI or an Affiliated Company thereof that was entered into before such time or any transaction entered into in the performance of any such contract, agreement, arrangement or transaction (or the amendment, modification or termination thereof), whether entered into before or after such time, or (ii) any transaction entered into between the Corporation or an Affiliated Company thereof and REI or an Affiliated Company thereof or the allocation of any opportunity between them before such time.

          In addition to any other affirmative vote required by applicable law, this Article EIGHTH may not be amended, modified or repealed except by the affirmative vote of the holders of not less than sixty six and two-thirds percent (66 2/3%) of the voting power of all

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outstanding shares of capital stock of the Corporation generally entitled to vote in the election of directors, voting together as a single class.

          NINTH: The Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws of the Corporation. Any adoption, amendment or repeal of the Bylaws of the Corporation by the Board of Directors shall require the affirmative vote of at least eighty percent (80%) of all directors then in office at any regular or special meeting of the Board of Directors called for that purpose. In addition to any other affirmative vote required by applicable law, this Article NINTH may not be amended, modified or repealed except by the affirmative vote of the holders of at least eighty percent (80%) of the voting power of all outstanding shares of capital stock of the Corporation generally entitled to vote in the election of directors, voting together as a single class.

          TENTH: Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for the Corporation under the provisions of Section 291 of the DGCL or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under the provisions of Section 279 of the DGCL, order a meeting of the creditors or class of creditors, and/or the stockholders or a class of stockholders of the Corporation as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which said application has been made, be binding on all of the creditors or class of creditors, and/or the stockholders or class of stockholders, of the Corporation, as the case may be, and also on the Corporation.

          ELEVENTH: The Corporation has elected not to be governed by Section 203 of the DGCL until the date on which no person (as defined in such Section) is the beneficial owner (as such term is defined in Rule 13d-3 under the Securities Exchange Act of 1934) of at least a majority of the Corporation’s outstanding voting stock (as defined in such Section). From such date forward, the Corporation shall be governed by Section 203 of the DGCL, and will continue to be governed by such Section even if after such date a person becomes the beneficial owner of a majority (or more) of the Corporation’s outstanding voting stock.

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          IN WITNESS WHEREOF, the Corporation has caused the Restated Certificate of Incorporation to be signed and attested by its duly authorized officers, this 27th day of April, 2001.

RELIANT RESOURCES, INC.
By:
	Name:
	Title:

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Schedule 5.1(B)

Bylaws

Amended and Restated Bylaws

of

Reliant Resources, Inc.

Adopted and Amended by Resolution of the Board of Directors on
April 27, 2001

ARTICLE I

CAPITAL STOCK

     Section 1. Share Ownership. Shares for the capital stock of the Company shall be certificated; provided, however, that the Board of Directors of the Company may provide by resolution or resolutions that some or all of any or all classes or series of the Company’s stock may be uncertificated shares. Owners of shares of the capital stock of the Company shall be recorded in the share transfer records of the Company and ownership of such shares shall be evidenced by a certificate or book entry notation in the share transfer records of the Company. Any certificates representing such shares shall be signed by the Chairman of the Board, if there is one, the President or a Vice President and by the Treasurer, an Assistant Treasurer, the Corporate Secretary or an Assistant Corporate Secretary and shall be sealed with the seal of the Company, which signatures and seal may be facsimiles. In case any officer who has signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Company with the same effect as if such person were such officer at the date of its issuance.

     Section 2. Stockholders of Record. The Board of Directors of the Company may appoint one or more transfer agents or registrars of any class of stock or other security of the Company. The Company may be its own transfer agent if so appointed by the Board of Directors. The Company shall be entitled to treat the holder of record of any shares of the Company as the owner thereof for all purposes, and shall not be bound to recognize any equitable or other claim to, or interest in, such shares or any rights deriving from such shares, on the part of any other person, including (but without limitation) a purchaser, assignee or transferee, unless and until such other person becomes the holder of record of such shares, whether or not the Company shall have either actual or constructive notice of the interest of such other person.

     Section 3. Transfer of Shares. The shares of the capital stock of the Company shall be transferable in the share transfer records of the Company by the holder of record thereof, or his duly authorized attorney or legal representative. All certificates representing shares surrendered for transfer, properly endorsed, shall be canceled and new certificates for a like number of shares shall be issued therefor. In the case of lost, stolen, destroyed or mutilated certificates representing shares for which the Company has been requested to issue new certificates, new certificates or other evidence of such new shares may be issued upon such conditions as may be

required by the Board of Directors or the Corporate Secretary or an Assistant Corporate Secretary for the protection of the Company and any transfer agent or registrar. Uncertificated shares shall be transferred in the share transfer records of the Company upon the written instruction originated by the appropriate person to transfer the shares.

     Section 4. Stockholders of Record and Fixing of Record Date. For the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive a distribution by the Company (other than a distribution involving a purchase or redemption by the Company of any of its own shares) or a share dividend, or in order to make a determination of stockholders for any other proper purpose, the Board of Directors may provide that the share transfer records shall be closed for a stated period of not more than sixty days, and in the case of a meeting of stockholders not less than ten days, immediately preceding the meeting, or it may fix in advance a record date for any such determination of stockholders, such date to be not more than sixty days, and in the case of a meeting of stockholders not less than ten days, prior to the date on which the particular action requiring such determination of stockholders is to be taken. If the share transfer records are not closed and no record date is fixed for the determination of stockholders entitled to notice of or to vote at a meeting of stockholders, or stockholders entitled to receive a distribution (other than a distribution involving a purchase or redemption by the Company of any of its own shares) or a share dividend, the day next preceding the date on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring such distribution or share dividend is adopted, as the case may be, shall be the record date for such determination of stockholders. When a determination of stockholders entitled to vote at any meeting of stockholders has been made as herein provided, such determination shall apply to any adjournment thereof except where the determination has been made through the closing of the share transfer records and the stated period of closing has expired.

ARTICLE II

MEETINGS OF STOCKHOLDERS

     Section 1. Place of Meetings. All meetings of stockholders shall be held at the principal office of the Company, in the City of Houston, Texas, or at such other place within or without the State of Delaware as may be designated by the Board of Directors or officer calling the meeting.

     Section 2. Annual Meeting. The annual meeting of the stockholders shall be held on such date and at such time as shall be designated from time to time by the Board of Directors or as may otherwise be stated in the notice of the meeting. Failure to designate a time for the annual meeting or to hold the annual meeting at the designated time shall not work a dissolution of the Company.

     Section 3. Special Meetings. Special meetings of the stockholders may be called by the Chairman of the Board, if there is one, the Chief Executive Officer, if there is one, the President, or a majority of the Board of Directors and may not be called by holders of shares of the Company’s common stock. Unless otherwise provided by the General Corporation Law of the State of Delaware (the “DGCL”), by the Restated Certificate of Incorporation of the Company or

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by any provisions established pursuant thereof with respect to the rights of holders of one or more outstanding series of the Company’s preferred stock, effective upon and commencing as of the date on which REI (as hereinafter defined) shall first cease to own, either directly or indirectly, at least a majority of the then issued outstanding shares of the Company’s common stock (such date hereinafter referred to as the “Trigger Date”), special meetings of the stockholders of the Company may be called at any time only by the Chairman of the Board, if there is one, the President and Chief Executive Officer of the Company, or by the Board of Directors pursuant to a resolution approved by the affirmative vote of at least a majority of the members of the Board of Directors, and no such special meeting may be called by any other person or persons. As used in these Bylaws, “REI” shall mean Reliant Energy, Incorporated, a Texas corporation (“Reliant Energy”), any successor to Reliant Energy by means of reorganization, merger, consolidation, conveyance or transfer or any ultimate parent company of Reliant Energy.

     Section 4. Notice of Meeting. Written or printed notice of all meetings stating the place, day and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten nor more than sixty days before the date of the meeting, either personally or by mail, by or at the direction of the Chairman of the Board, if there is one, the Chief Executive Officer, if there is one, the President, the Corporate Secretary or the officer or person calling the meeting to each stockholder of record entitled to vote at such meetings. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the stockholder at his address as it appears on the share transfer records of the Company, with postage thereon prepaid.

     Any notice required to be given to any stockholder, under any provision of the DGCL, the Restated Certificate of Incorporation of the Company or these Bylaws, need not be given to a stockholder if notice of two consecutive annual meetings and all notices of meetings held during the period between those annual meetings, if any, or all (but in no event less than two) payments (if sent by first class mail) of dividends or interest on securities during a 12-month period have been mailed to that person, addressed at his address as shown on the share transfer records of the Company, and have been returned undeliverable. Any action or meeting taken or held without notice to such person shall have the same force and effect as if the notice had been duly given. If such a person delivers to the Company a written notice setting forth his then current address, the requirement that notice be given to that person shall be reinstated.

     Section 5. Voting List. The officer or agent having charge of the share transfer records for shares of the Company shall make, at least ten days before each meeting of stockholders, a complete list of the stockholders entitled to vote at such meeting or any adjournment thereof, arranged in alphabetical order, with the address of and the number of shares held by each, which list, for a period of ten days prior to such meeting, shall be kept on file at the principal place of business of the Company and shall be subject to inspection by any stockholder at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any stockholder during the whole time of the meeting. The original share transfer records shall be prima facie evidence as to who are the stockholders entitled to examine such list or to vote at any meeting of stockholders. Failure to comply with any requirements of this Section 5 shall not affect the validity of any action taken at such meeting.

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     Section 6. Voting; Proxies. Except as otherwise provided in the Restated Certificate of Incorporation of the Company or as otherwise provided under the DGCL, each holder of shares of capital stock of the Company entitled to vote shall be entitled to one vote for each share standing in his name on the records of the Company, either in person or by proxy executed in writing by him or by his duly authorized attorney-in-fact. A proxy shall be revocable unless expressly provided therein to be irrevocable and the proxy is coupled with an interest sufficient in law to support an irrevocable power. At each election of directors, every holder of shares of the Company entitled to vote shall have the right to vote, in person or by proxy, the number of shares owned by him for as many persons as there are directors to be elected, and for whose election he has a right to vote, but in no event shall he be permitted to cumulate his votes for one or more directors.

     Section 7. Quorum and Vote of Stockholders. Except as otherwise provided by law, the Restated Certificate of Incorporation of the Company or these Bylaws, the holders of a majority of shares entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of stockholders, but, if a quorum is not represented, a majority in interest of those represented may adjourn the meeting from time to time. Directors shall be elected by a plurality of the votes cast by the holders of shares entitled to vote in the election of directors at a meeting of stockholders at which a quorum is present. With respect to each matter other than the election of directors as to which no other voting requirement is specified by law, the Restated Certificate of Incorporation of the Company or in this Section 7, the affirmative vote of the holders of a majority of the shares entitled to vote on that matter and represented in person or by proxy at a meeting at which a quorum is present shall be the act of the stockholders. With respect to a matter submitted to a vote of the stockholders as to which a stockholder approval requirement is applicable under the stockholder approval policy of the New York Stock Exchange, Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any provision of the Internal Revenue Code, in each case for which no higher voting requirement is specified by law, the Restated Certificate of Incorporation of the Company or these Bylaws, the affirmative vote of the holders of a majority of the shares entitled to vote on, and voted for or against, that matter at a meeting at which a quorum is present shall be the act of the stockholders, provided that approval of such matter shall also be conditioned on any more restrictive requirement of such stockholder approval policy, Rule 16b-3 or Internal Revenue Code provision, as applicable, being satisfied. With respect to the approval of independent public accountants (if submitted for a vote of the stockholders), the affirmative vote of the holders of a majority of the shares entitled to vote on, and voted for or against, that matter at a meeting of stockholders at which a quorum is present shall be the act of the stockholders.

     Section 8. Presiding Officer and Conduct of Meetings. The Chairman of the Board, if there is one, or in his absence, the Chief Executive Officer, if there is one, or in his absence, the President shall preside at all meetings of the stockholders or, if such officers are not present at a meeting, by such other person as the Board of Directors shall designate or if no such person is designated by the Board of Directors, the most senior officer of the Company present at the meeting. The Corporate Secretary of the Company, if present, shall act as secretary of each meeting of stockholders; if he is not present at a meeting, then such person as may be designated by the presiding officer shall act as secretary of the meeting. Meetings of stockholders shall follow reasonable and fair procedure. Subject to the foregoing, the conduct of any meeting of stockholders and the determination of procedure and rules shall be within the absolute discretion

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of the officer presiding at such meeting (the “Chairman of the Meeting”), and there shall be no appeal from any ruling of the Chairman of the Meeting with respect to procedure or rules. Accordingly, in any meeting of stockholders or part thereof, the Chairman of the Meeting shall have the sole power to determine appropriate rules or to dispense with theretofore prevailing rules. Without limiting the foregoing, the following rules shall apply:

     (a) If disorder should arise which prevents continuation of the legitimate business of meeting, the Chairman of the Meeting may announce the adjournment of the meeting; and upon so doing, the meeting shall be immediately adjourned.

     (b) The Chairman of the Meeting may ask or require that anyone not a bona fide stockholder or proxy leave the meeting.

     (c) A resolution or motion proposed by a stockholder shall only be considered for vote of the stockholders if it meets the criteria of Article II, Section 9 (Proper Business—Annual Meeting of Stockholders) or Article II, Section 10 (Proper Business—Special Meeting of Stockholders), as the case may be. The Chairman of the Meeting may propose any resolution or motion for vote of the stockholders.

     (d) The order of business at all meetings of stockholders shall be determined by the Chairman of the Meeting.

     (e) The Chairman of the Meeting may impose any reasonable limits with respect to participation in the meeting by stockholders, including, but not limited to, limits on the amount of time taken up by the remarks or questions of any stockholder, limits on the number of questions per stockholder and limits as to the subject matter and timing of questions and remarks by stockholders.

     (f) Before any meeting of stockholders, the Board of Directors (i) shall appoint three persons other than nominees for office to act as inspectors of election at the meeting or its adjournment and (ii) may designate one or more alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the Chairman of the Meeting shall appoint one or more, up to a maximum of three, inspectors of election to act at the meeting of the stockholders.

     The duties of the inspectors shall be to:

     (i) determine the number of shares outstanding and the voting power of each such share, the shares represented at the meeting, the existence of a quorum, and the authenticity, validity and effect of proxies and ballots;

     (ii) receive votes or ballots;

     (iii) hear and determine all challenges and questions in any way arising in connection with the vote and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors;

     (iv) count and tabulate all votes and ballots;

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     (v) report and certify to the Board of Directors the results based on the information assembled by the inspectors; and

     (vi) do any other acts that may be proper to conduct the election or vote with fairness to all stockholders.

     (g) Each inspector of election, before entering upon the discharge of the duties of inspector, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability.

     (h) In determining the validity and counting of proxies and ballots, the inspectors of election shall be limited to an examination of the items specifically allowed by Section 231(d) of the DGCL.

     All determinations of the Chairman of the Meeting shall be conclusive unless a matter is determined otherwise upon motion duly adopted by the affirmative vote of the holders of at least 80% of the voting power of the shares of capital stock of the Company entitled to vote in the election of directors held by stockholders present in person or represented by proxy at such meeting.

     Section 9. Proper Business—Annual Meeting of Stockholders. At any annual meeting of stockholders, only such business shall be conducted as shall be a proper subject for the meeting and shall have been properly brought before the meeting. To be properly brought before an annual meeting of stockholders, business (other than business relating to any nomination of directors, which is governed by Article III, Section 4 of these Bylaws) must (a) be specified in the notice of such meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (b) otherwise be properly brought before the meeting by or at the direction of the Chairman of the Meeting or the Board of Directors (or any duly authorized committee thereof) or (c) otherwise (i) be properly requested to be brought before the meeting by a stockholder of record entitled to vote in the election of directors generally, in compliance with the provisions of this Section 9 and (ii) constitute a proper subject to be brought before such meeting. For business to be properly brought before an annual meeting of stockholders, any stockholder who intends to bring any matter (other than a matter relating to any nomination of directors, which is governed by Article III, Section 4 of these Bylaws) before an annual meeting of stockholders and is entitled to vote on such matter must deliver written notice of such stockholder’s intent to bring such matter before the annual meeting of stockholders, either by personal delivery or by United States mail, postage prepaid, to the Corporate Secretary of the Company. Such notice must be received by the Corporate Secretary not less than ninety days nor more than 180 days prior to the date on which the immediately preceding year’s annual meeting of stockholders was held. In no event shall the public disclosure of an adjournment of an annual meeting of stockholders commence a new time period for the giving of a stockholder’s notice as described above.

     To be in proper written form, a stockholder’s notice to the Corporate Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting of stockholders (a) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting, (b) the name and address, as they appear

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on the Company’s books and records, of the stockholder proposing such business, (c) evidence, reasonably satisfactory to the Corporate Secretary of the Company, of such stockholder’s status as such and of the number of shares of each class of capital stock of the Company of which such stockholder is the beneficial owner, (d) a description of all arrangements or understandings between such stockholder and any other person or persons (including their names and the number of shares beneficially owned by them) in connection with the proposal of such business by such stockholder and any material interest of such stockholder in such business and (e) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting. No business shall be conducted at an annual meeting of stockholders except in accordance with the procedures set forth in this Section 9. Beneficial ownership shall be determined in accordance with Rule 13d-3 under the Exchange Act. When used in these Bylaws, “person” has the meaning ascribed to such term in Section 2(a)(2) of the Securities Act of 1933, as amended, as the context may require.

     Within thirty days after such stockholder shall have submitted the aforesaid items, the Corporate Secretary or the Board of Directors of the Company shall determine whether the proposed business has been properly requested to be brought before the annual meeting of stockholders and shall notify such stockholder in writing of its determination. If such stockholder fails to submit a required item in the form or within the time indicated, or if the Corporate Secretary or the Board of Directors of the Company determines that the proposed business otherwise has not been properly requested, then such proposal by such stockholder shall not be voted upon by the stockholders of the Company at such annual meeting of stockholders. The Chairman of the Meeting shall, if the facts warrant, determine and declare to the meeting that a proposal made by a stockholder of the Company pursuant to this Section 9 was not made in accordance with the procedures prescribed by these Bylaws, and if he should so determine, he shall so declare to the meeting and the defective proposal shall be disregarded.

     Nothing in this Section 9 shall be interpreted or construed to require the inclusion of information about any such proposal in any proxy statement distributed by, at the direction of, or on behalf of the Board of Directors of the Company.

     Section 10. Proper Business—Special Meeting of Stockholders. At any special meeting of stockholders, only such business shall be conducted as shall have been stated in the notice of such meeting or shall otherwise have been properly brought before the meeting by or at the direction of the Chairman of the Meeting or the Board of Directors (or any duly authorized committee thereof).

     Section 11. Action by Written Consent. Effective upon and commencing as of the Trigger Date, no action required to be taken or that may be taken at any annual or special meeting of the stockholders of the Company may be taken without a meeting, and the power of the stockholders of the Company to consent in writing to the taking of any action by written consent without a meeting is specifically denied.

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ARTICLE III

DIRECTORS

     Section 1. General. The business and affairs of the Company shall be managed by or under the direction of the Board of Directors. In addition to the authority and powers conferred on the Board of Directors by the DGCL or by the Restated Certificate of Incorporation of the Company, the Board of Directors is authorized and empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Company, subject to the provisions of the DGCL, the Restated Certificate of Incorporation of the Company and these Bylaws; provided, however, that no Bylaws hereafter adopted, or any amendments thereto, shall invalidate any prior act of the Board of Directors that would have been valid if such Bylaws or amendment had not been adopted.

     Section 2. Classification of Board of Directors; Qualifications. Each director elected by the holders of Preferred Stock pursuant to Division A of Article FOURTH of the Restated Certificate of Incorporation of the Company (or elected by such directors to fill a vacancy) shall serve for a term ending upon the earlier of the election of his successor or the termination at any time of a right of the holders of Preferred Stock to elect members of the Board of Directors.

     The number of directors which shall constitute the whole Board of Directors shall be fixed in the manner provided in the Restated Certificate of Incorporation of the Company. As provided in Article FIFTH of the Restated Certificate of Incorporation of the Company, effective upon and commencing as of the Trigger Date, the directors, other than those who may be elected by the holders of any series of Preferred Stock, shall be divided into three classes: Class I, Class II and Class III.

     At each annual election on or after the Trigger Date, the directors chosen to succeed those whose terms then expire shall be of the same class as the directors they succeed, unless, by reason of any intervening changes in the authorized number of directors, the Board of Directors shall designate one or more directorships whose term then expires as directorships of another class in order more nearly to achieve equality of number of directors among the classes.

     Notwithstanding the provision in Article FIFTH of the Restated Certificate of Incorporation of the Company that, commencing as of the Trigger Date, the three classes of directors shall be as nearly equal in number of directors as possible, in the event of any change in the authorized number of directors, each director then continuing to serve as such shall nevertheless continue as a director of the class of which he or she is a member until the expiration of his or her current term, or his or her prior death, resignation, disqualification or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

     No person shall be eligible to serve as a director of the Company subsequent to the annual meeting of stockholders occurring on or after the first day of the month immediately following the month of such person’s seventieth birthday. Any vacancy on the Board of Directors resulting from any director being rendered ineligible to serve as a director of the Company by the immediately preceding sentence shall be filled by a majority of the remaining

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directors then in office, even though less than a quorum of the Board of Directors. Any director chosen to succeed a director who is so rendered ineligible to serve as a director of the Company shall be of the same class as the director he or she succeeds.

     No person shall continue to serve as a member of the Board of Directors if the director ceases for any reason to hold the principal employment or position he or she held at the time first elected to the Board of Directors and does not secure a comparable employment or position, as determined in the sole judgment of the Board of Directors, within one year thereof.

     No person who is also an employee of the Company or one of its corporate affiliates shall continue to serve as a member of the Board of Directors after his or her retirement, termination or downward change in status in the Company, as determined in the sole judgment of the Board of Directors.

     The Board of Directors may waive any qualification set forth above in this Section 2 if it determines that the director has special skill, experience or distinction having value to the Company that is not readily available or transferable. Any such waiver shall be made by a majority of the Board of Directors, excluding the director whose disqualification is being waived.

     Any vacancies on the Board of Directors resulting from the disqualification of a director by virtue of the above qualifications may be filled as provided in Section 3 of this Article III.

     The above qualifications and limitations notwithstanding, each director shall serve until his successor shall have been duly elected and qualified, unless he or she shall resign, become disqualified, disabled or shall otherwise be removed.

     Section 3. Newly Created Directorships and Vacancies. Newly created directorships resulting from any increase in the number of directors and any vacancies on the Board of Directors resulting from death, resignation, removal, disqualification or other cause shall be filled by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the class of directors in which the new directorship was created or the vacancy occurred and until that director’s successor shall have been elected and qualified or until his earlier death, resignation or removal.

     Notwithstanding the foregoing paragraph of this Section 3, whenever holders of outstanding shares of Preferred Stock are entitled to elect members of the Board of Directors pursuant to the provisions of Division A of Article FOURTH of the Restated Certificate of Incorporation of the Company, any vacancy or vacancies resulting by reason of the death, resignation, disqualification or removal of any director or directors or any increase in the number of directors shall be filled in accordance with the provisions of such division.

     Section 4. Nomination of Directors. Nominations for the election of directors may be made by the Board of Directors or by any stockholder (each, a “Nominator”) entitled to vote in the election of directors. Such nominations, other than those made by the Board of Directors, shall be made in writing pursuant to timely notice delivered to or mailed and received by the Corporate Secretary of the Company as set forth in this Section 4. To be timely in connection

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with an annual meeting of stockholders, a Nominator’s notice, setting forth the name and address of the person to be nominated, shall be delivered to or mailed and received at the principal executive offices of the Company not less than ninety days nor more than 180 days prior to the date on which the immediately preceding year’s annual meeting of stockholders was held. To be timely in connection with any election of a director at a special meeting of the stockholders, a Nominator’s notice, setting forth the name of the person to be nominated, shall be delivered to or mailed and received at the principal executive offices of the Company not less than forty days nor more than sixty days prior to the date of such meeting; provided, however, that in the event that less than forty-seven days’ notice or prior public disclosure of the date of the special meeting of the stockholders is given or made to the stockholders, the Nominator’s notice to be timely must be so received not later than the close of business on the seventh day following the day on which such notice of date of the meeting was mailed or such public disclosure was made. At such time, the Nominator shall also submit written evidence, reasonably satisfactory to the Corporate Secretary of the Company, that the Nominator is a stockholder of the Company and shall identify in writing (a) the name and address of the Nominator, (b) the number of shares of each class of capital stock of the Company owned beneficially by the Nominator, (c) the name and address of each of the persons with whom the Nominator is acting in concert, (d) the number of shares of capital stock beneficially owned by each such person with whom the Nominator is acting in concert and (e) a description of all arrangements or understandings between the Nominator and each nominee and any other persons with whom the Nominator is acting in concert pursuant to which the nomination or nominations are to be made. At such time, the Nominator shall also submit in writing (i) the information with respect to each such proposed nominee that would be required to be provided in a proxy statement prepared in accordance with Regulation 14A under the Exchange Act and (ii) a notarized affidavit executed by each such proposed nominee to the effect that, if elected as a member of the Board of Directors, he will serve and that he is eligible for election as a member of the Board of Directors. Within thirty days (or such shorter time period that may exist prior to the date of the meeting) after the Nominator has submitted the aforesaid items to the Corporate Secretary of the Company, the Corporate Secretary of the Company shall determine whether the evidence of the Nominator’s status as a stockholder submitted by the Nominator is reasonably satisfactory and shall notify the Nominator in writing of his determination. The failure of the Corporate Secretary of the Company to find such evidence reasonably satisfactory, or the failure of the Nominator to submit the requisite information in the form or within the time indicated, shall make the person to be nominated ineligible for nomination at the meeting at which such person is proposed to be nominated. The Chairman of the Meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by these Bylaws, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. Beneficial ownership shall be determined in accordance with Rule 13d-3 under the Exchange Act.

     Section 5. Place of Meetings and Meetings by Telephone. Meetings of the Board of Directors may be held either within or without the State of Delaware, at whatever place is specified by the officer calling the meeting. Meetings of the Board of Directors may also be held by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Participation in such a meeting by means of conference telephone or other communications equipment shall constitute presence in person at such meeting, except where a director participates in a meeting for the express purpose

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of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. In the absence of specific designation by the officer calling the meeting, the meetings shall be held at the principal office of the Company.

     Section 6. Regular Meetings. The Board of Directors shall meet each year immediately following the annual meeting of the stockholders for the transaction of such business as may properly be brought before the meeting. The Board of Directors shall also meet regularly at such other times as shall be designated by the Board of Directors. No notice of any kind to either existing or newly elected members of the Board of Directors for such annual or regular meetings shall be necessary.

     Section 7. Special Meetings. Special meetings of the Board of Directors may be held at any time upon the call of the Chairman of the Board, if there is one, the Chief Executive Officer, if there is one, the President or the Corporate Secretary of the Company or a majority of the directors then in office. Notice shall be sent by mail, facsimile or telegram to the last known address of the director at least two days before the meeting, or oral notice may be substituted for such written notice if received not later than the day preceding such meeting. Notice of the time, place and purpose of such meeting may be waived in writing before or after such meeting, and shall be equivalent to the giving of notice. Attendance of a director at such meeting shall also constitute a waiver of notice thereof, except where he attends for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. Except as otherwise provided by these Bylaws, neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.

     Section 8. Quorum and Voting. Except as otherwise provided by law, a majority of the number of directors fixed in the manner provided in the Restated Certificate of Incorporation of the Company shall constitute a quorum for the transaction of business. Except as otherwise provided by law, the Restated Certificate of Incorporation of the Company or these Bylaws, the affirmative vote of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. Any regular or special directors’ meeting may be adjourned from time to time by those present, whether a quorum is present or not.

     Section 9. Compensation. Directors shall receive such compensation for their services as shall be determined by the Board of Directors.

     Section 10. Removal. Effective upon and commencing as of the Trigger Date, no director of the Company may be removed from office as a director by vote or other action of the stockholders or otherwise except for cause, and then only by the affirmative vote of the holders of at least a majority of the voting power of all outstanding shares of capital stock of the Company generally entitled to vote in the election of directors, voting together as a single class.

     Except as applicable law otherwise provides, cause for the removal of a director shall be deemed to exist only if the director whose removal is proposed: (i) has been convicted, or has been granted immunity to testify in any proceeding in which another has been convicted, of a felony by a court of competent jurisdiction and that conviction is no longer subject to direct appeal; (ii) has been found to have been negligent or guilty of misconduct in the performance of

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his duties to the Company in any matter of substantial importance to the Company by (A) the affirmative vote of at least 80% of the directors then in office at any meeting of the Board of Directors called for that purpose or (B) a court of competent jurisdiction; or (iii) has been adjudicated by a court of competent jurisdiction to be mentally incompetent, which mental incompetency directly affects his ability to serve as a director of the Company.

     Notwithstanding the foregoing, whenever holders of outstanding shares of one or more series of Preferred Stock are entitled to elect members of the Board of Directors pursuant to the provisions applicable in the case of arrearages in the payment of dividends or other defaults contained in the Restated Certificate of Incorporation of the Company or the Board of Directors’ resolution providing for the establishment of any series of Preferred Stock, any such director of the Company so elected may be removed in accordance with the provisions of the Restated Certificate of Incorporation of the Company or that Board of Directors’ resolution.

     No proposal by a stockholder to remove a director of the Company, regardless of whether such director was elected by holders of outstanding shares of any series of Preferred Stock (or elected by such directors to fill a vacancy), shall be voted upon at an annual meeting of the stockholders unless such stockholder shall have delivered or mailed in a timely manner (as set forth in this Section 10) and in writing to the Corporate Secretary of the Company (a) notice of such proposal, (b) a statement of the grounds, if any, on which such director is proposed to be removed, (c) evidence, reasonably satisfactory to the Corporate Secretary of the Company, of such stockholder’s status as such and of the number of shares of each class of the capital stock of the Company beneficially owned by such stockholder, (d) a list of the names and addresses of other beneficial owners of shares of the capital stock of the Company, if any, with whom such stockholder is acting in concert, and of the number of shares of each class of the capital stock of the Company beneficially owned by each such beneficial owner and (e) an opinion of counsel, which counsel and the form and substance of which opinion shall be reasonably satisfactory to the Board of Directors of the Company (excluding the director proposed to be removed), to the effect that, if adopted at a duly called special or annual meeting of the stockholders of the Company by the required vote as set forth in the first paragraph of this Section 10, such removal would not be in conflict with the laws of the State of Delaware, the Restated Certificate of Incorporation of the Company or these Bylaws. To be timely in connection with an annual meeting of stockholders, a stockholder’s notice and other aforesaid items shall be delivered to or mailed and received at the principal executive offices of the Company not less than ninety nor more than 180 days prior to the date on which the immediately preceding year’s annual meeting of stockholders was held. Within thirty days (or such shorter period that may exist prior to the date of the meeting) after such stockholder shall have delivered the aforesaid items to the Corporate Secretary of the Company, the Corporate Secretary and the Board of Directors of the Company shall respectively determine whether the items to be ruled upon by them are reasonably satisfactory and shall notify such stockholder in writing of their respective determinations. If such stockholder fails to submit a required item in the form or within the time indicated, or if the Corporate Secretary or the Board of Directors of the Company determines that the items to be ruled upon by them are not reasonably satisfactory, then such proposal by such stockholder may not be voted upon by the stockholders of the Company at such annual meeting of the stockholders. The Chairman of the Meeting shall, if the facts warrant, determine and declare to the meeting that a proposal to remove a director of the Company was not made in accordance with the procedures prescribed by these Bylaws, and if he should so determine, he

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shall so declare to the meeting and the defective proposal shall be disregarded. Beneficial ownership shall be determined as specified in accordance with Rule 13d-3 under the Exchange Act.

     No proposal by a stockholder to remove a director of the Company, regardless of whether such director was elected by holders of outstanding shares of any series of Preferred Stock (or elected by such directors to fill a vacancy), shall be voted upon at a special meeting of the stockholders.

     Section 11. Executive and Other Committees. The Board of Directors, by resolution or resolutions adopted by a majority of the full Board of Directors, may designate one or more members of the Board of Directors to constitute an Executive Committee, and one or more other committees, which shall in each case be comprised of such number of directors as the Board of Directors may determine from time to time. Subject to such restrictions as may be contained in the Company’s Restated Certificate of Incorporation or that may be imposed by the DGCL, any such committee shall have and may exercise such powers and authority of the Board of Directors in the management of the business and affairs of the Company as the Board of Directors may determine by resolution and specify in the respective resolutions appointing them, and may authorize the seal of the Company to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to the following matters: (a) approving or adopting, or recommending to the stockholders of the Company, any action or matter expressly required by the DGCL to be submitted to the stockholders for approval or (b) adopting, amending or repealing any Bylaw of the Company. Each duly authorized action taken with respect to a given matter by any such duly appointed committee of the Board of Directors shall have the same force and effect as the action of the full Board of Directors and shall constitute for all purposes the action of the full Board of Directors with respect to such matter.

     The Board of Directors shall have the power at any time to change the membership of any such committee and to fill vacancies in it. A majority of the members of any such committee shall constitute a quorum. The Board of Directors shall name a chairman at the time it designates members to a committee. Each such committee shall appoint such subcommittees and assistants as it may deem necessary. Except as otherwise provided by the Board of Directors, meetings of any committee shall be conducted in accordance with the provisions of Sections 5 and 7 of this Article III as the same shall from time to time be amended. Any member of any such committee elected or appointed by the Board of Directors may be removed by the Board of Directors whenever in its judgment the best interests of the Company will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of a member of a committee shall not of itself create contract rights.

ARTICLE IV

OFFICERS

     Section 1. Officers. The officers of the Company shall consist of a President and a Corporate Secretary and such other officers and agents as the Board of Directors may from time to time elect or appoint. The Board of Directors may delegate to the Chairman of the Board, if

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there is one, and/or the Chief Executive Officer, if there is one, the authority to appoint additional officers and agents of the Company. Each officer shall hold office until his successor shall have been duly elected or appointed and shall qualify or until his death or until he shall resign or shall have been removed in the manner hereinafter provided. Any two or more offices may be held by the same person. Except for the Chairman of the Board, if any, no officer need be a director.

     Section 2. Vacancies; Removal. Whenever any vacancies shall occur in any office by death, resignation, increase in the number of offices of the Company, or otherwise, the officer so elected shall hold office until his successor is chosen and qualified. The Board of Directors may at any time remove any officer of the Company, whenever in its judgment the best interests of the Company will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights.

     Section 3. Powers and Duties of Officers. The officers of the Company shall have such powers and duties as generally pertain to their offices as well as such powers and duties as from time to time shall be conferred by the Board of Directors. The Corporate Secretary shall have the duty to record the proceedings of the meetings of the stockholders and directors in a book to be kept for that purpose.

ARTICLE V

INDEMNIFICATION

     Section 1. General. The Company shall, to the fullest extent permitted by applicable law in effect on the date of effectiveness of these Bylaws, and to such greater extent as applicable law may thereafter permit, indemnify and hold Indemnitee harmless from and against any and all losses, liabilities, claims, damages and, subject to Article V, Section 2 (Expenses), Expenses (as this and all other capitalized words used in this Article V not previously defined in these Bylaws are defined in Article V, Section 16 (Definitions)), whatsoever arising out of any event or occurrence related to the fact that Indemnitee is or was a director or officer of the Company or is or was serving in another Corporate Status.

     Section 2. Expenses. If Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to any Matter in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf relating to such Matter. The termination of any Matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such Matter. To the extent that the Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.

     Section 3. Advances. In the event of any threatened or pending action, suit or proceeding in which Indemnitee is a party or is involved and that may give rise to a right of

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indemnification under this Article V, following written request to the Company by Indemnitee, the Company shall promptly pay to Indemnitee amounts to cover expenses reasonably incurred by Indemnitee in such proceeding in advance of its final disposition upon the receipt by the Company of (i) a written undertaking executed by or on behalf of Indemnitee providing that Indemnitee will repay the advance if it shall ultimately be determined that Indemnitee is not entitled to be indemnified by the Company as provided in these Bylaws and (ii) satisfactory evidence as to the amount of such expenses.

     Section 4. Repayment of Advances or Other Expenses. Indemnitee agrees that Indemnitee shall reimburse the Company all expenses paid by the Company in defending any civil, criminal, administrative or investigative action, suit or proceeding against Indemnitee in the event and only to the extent that it shall be determined pursuant to the provisions of this Article V or by final judgment or other final adjudication under the provisions of any applicable law that Indemnitee is not entitled to be indemnified by the Company for such expenses.

     Section 5. Request for Indemnification. To obtain indemnification, Indemnitee shall submit to the Corporate Secretary of the Company a written claim or request. Such written claim or request shall contain sufficient information to reasonably inform the Company about the nature and extent of the indemnification or advance sought by Indemnitee. The Corporate Secretary of the Company shall promptly advise the Board of Directors of such request.

     Section 6. Determination of Entitlement; No Change of Control. If there has been no Change of Control at the time the request for indemnification is submitted, Indemnitee’s entitlement to indemnification shall be determined in accordance with Section 145(d) of the DGCL. If entitlement to indemnification is to be determined by Independent Counsel, the Company shall furnish notice to Indemnitee within ten days after receipt of the request for indemnification, specifying the identity and address of Independent Counsel. The Indemnitee may, within fourteen days after receipt of such written notice of selection, deliver to the Company a written objection to such selection. Such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of Independent Counsel and the objection shall set forth with particularity the factual basis for such assertion. If there is an objection to the selection of Independent Counsel, either the Company or Indemnitee may petition the Court for a determination that the objection is without a reasonable basis and/or for the appointment of Independent Counsel selected by the Court.

     Section 7. Determination of Entitlement; Change of Control. If there has been a Change of Control at the time the request for indemnification is submitted, Indemnitee’s entitlement to indemnification shall be determined in a written opinion by Independent Counsel selected by Indemnitee. Indemnitee shall give the Company written notice advising of the identity and address of the Independent Counsel so selected. The Company may, within seven days after receipt of such written notice of selection, deliver to the Indemnitee a written objection to such selection. Indemnitee may, within five days after the receipt of such objection from the Company, submit the name of another Independent Counsel and the Company may, within seven days after receipt of such written notice of selection, deliver to the Indemnitee a written objection to such selection. Any objections referred to in this Section 7 may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of Independent Counsel and such objection shall set forth with particularity the factual basis for such assertion.

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Indemnitee may petition the Court for a determination that the Company’s objection to the first and/or second selection of Independent Counsel is without a reasonable basis and/or for the appointment as Independent Counsel of a person selected by the Court.

     Section 8. Procedures of Independent Counsel. If a Change of Control shall have occurred before the request for indemnification is sent by Indemnitee, Indemnitee shall be presumed (except as otherwise expressly provided in this Article V) to be entitled to indemnification upon submission of a request for indemnification in accordance with Article V, Section 5 (Request for Indemnification), and thereafter the Company shall have the burden of proof to overcome the presumption in reaching a determination contrary to the presumption. The presumption shall be used by Independent Counsel as a basis for a determination of entitlement to indemnification unless the Company provides information sufficient to overcome such presumption by clear and convincing evidence or the investigation, review and analysis of Independent Counsel convinces him by clear and convincing evidence that the presumption should not apply.

     Except in the event that the determination of entitlement to indemnification is to be made by Independent Counsel, if the person or persons empowered under Article V, Section 6 (Determination of Entitlement; No Change of Control) or Section 7 (Determination of Entitlement; Change of Control) to determine entitlement to indemnification shall not have made and furnished to Indemnitee in writing a determination within sixty days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification unless Indemnitee knowingly misrepresented a material fact in connection with the request for indemnification or such indemnification is prohibited by applicable law. The termination of any Proceeding or of any Matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Article V) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner that he reasonably believed to be in or not opposed to the best interests of the Company, or with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful. A person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan of the Company shall be deemed to have acted in a manner not opposed to the best interests of the Company.

     For purposes of any determination hereunder, a person shall be deemed to have acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company, or, with respect to any criminal action or Proceeding, to have had no reasonable cause to believe his conduct was unlawful, if his action is based on the records or books of account of the Company or another enterprise or on information supplied to him by the officers of the Company or another enterprise in the course of their duties or on the advice of legal counsel for the Company or another enterprise or on information or records given or reports made to the Company or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Company or another enterprise. The term “another enterprise” as used in this Section shall mean any other company or any partnership, limited liability company, association, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the Company as a

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director, officer, employee or agent. The provisions of this paragraph shall not be deemed to be exclusive or to limit in any way the circumstances in which an Indemnitee may be deemed to have met the applicable standards of conduct for determining entitlement to rights under this Article V

     Section 9. Independent Counsel Expenses. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred acting pursuant to this Article V and in any proceeding to which it is a party or witness in respect of its investigation and written report and shall pay all reasonable fees and expenses incident to the procedures in which such Independent Counsel was selected or appointed. No Independent Counsel may serve if a timely objection has been made to his selection until a court has determined that such objection is without a reasonable basis.

     Section 10. Adjudication. In the event that (i) a determination is made pursuant to Article V, Section 6 (Determination of Entitlement; No Change of Control) or Section 7 (Determination of Entitlement; Change of Control) that Indemnitee is not entitled to indemnification under this Article V; (ii) advancement of Expenses is not timely made pursuant to Article V, Section 3 (Advances); (iii) Independent Counsel has not made and delivered a written opinion determining the request for indemnification (a) within ninety days after being appointed by the Court, (b) within ninety days after objections to his selection have been overruled by the Court or (c) within ninety days after the time for the Company or Indemnitee to object to his selection; or (iv) payment of indemnification is not made within five days after a determination of entitlement to indemnification has been made or deemed to have been made pursuant to Article V, Section 6 (Determination of Entitlement; No Change of Control), Section 7 (Determination of Entitlement; Change of Control) or Section 8 (Procedures of Independent Counsel), Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advancement of Expenses. In the event that a determination shall have been made that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 10 shall be conducted in all respects as a de novo trial on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. If a Change of Control shall have occurred, in any judicial proceeding commenced pursuant to this Section 10, the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be. If a determination shall have been made or deemed to have been made that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 10, or otherwise, unless Indemnitee knowingly misrepresented a material fact in connection with the request for indemnification, or such indemnification is prohibited by law.

     The Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 10 that the procedures and presumptions of this Article V are not valid, binding and enforceable and shall stipulate in any such proceeding that the Company is bound by all provisions of this Article V. In the event that Indemnitee, pursuant to this Section 10, seeks a judicial adjudication to enforce his rights under, or to recover damages for breach of, this Article V, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company against, any and all Expenses actually and reasonably incurred by him in such judicial adjudication, but only if he prevails therein. If it shall be determined in such judicial

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adjudication that Indemnitee is entitled to receive part but not all of the indemnification or advancement of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.

     Section 11. Participation by the Company. With respect to any such claim, action, suit, proceeding or investigation as to which Indemnitee notifies the Company of the commencement thereof: (a) the Company will be entitled to participate therein at its own expense; (b) except as otherwise provided below, to the extent that it may wish, the Company (jointly with any other indemnifying party similarly notified) will be entitled to assume the defense thereof, with counsel reasonably satisfactory to Indemnitee. After receipt of notice from the Company to Indemnitee of the Company’s election so to assume the defense thereof, the Company will not be liable to Indemnitee under this Article V for any legal or other expenses subsequently incurred by Indemnitee in connection with the defense thereof other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ his own counsel in such action, suit, proceeding or investigation but the fees and expenses of such counsel incurred after notice from the Company of its assumption of the defense thereof shall be at the expense of Indemnitee unless (i) the employment of counsel by Indemnitee has been authorized by the Company, (ii) Indemnitee shall have reasonably concluded that there is a conflict of interest between the Company and Indemnitee in the conduct of the defense of such action or (iii) the Company shall not in fact have employed counsel to assume the defense of such action, in each of which cases the fees and expenses of counsel employed by Indemnitee shall be subject to indemnification pursuant to the terms of this Article V. The Company shall not be entitled to assume the defense of any action, suit, proceeding or investigation brought in the name of or on behalf of the Company or as to which Indemnitee shall have made the conclusion provided for in (ii) above; and (c) the Company shall not be liable to indemnify Indemnitee under this Article V for any amounts paid in settlement of any action or claim effected without its written consent, which consent shall not be unreasonably withheld. The Company shall not settle any action or claim in any manner that would impose any limitation or unindemnified penalty on Indemnitee without Indemnitee’s written consent, which consent shall not be unreasonably withheld.

     Section 12. Nonexclusivity of Rights. The rights of indemnification and advancement of Expenses as provided by this Article V shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled to under applicable law, the Restated Certificate of Incorporation of the Company, these Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Article V or any provision hereof shall be effective as to any Indemnitee for acts, events and circumstances that occurred, in whole or in part, before such amendment, alteration or repeal. The provisions of this Article V shall continue as to an Indemnitee whose Corporate Status has ceased for any reason and shall inure to the benefit of his heirs, executors and administrators. Neither the provisions of this Article V nor those of any agreement to which the Company is a party shall be deemed to preclude the indemnification of any person who is not specified in this Article V as having the right to receive indemnification or is not a party to any such agreement, but whom the Company has the power or obligation to indemnify under the provisions of the DGCL.

     Section 13. Insurance and Subrogation. The Company may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Company or another corporation, partnership, joint venture, trust or other enterprise against any such expense, liability

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or loss, whether or not the Company would have the power to indemnity such person against such expense, liability or loss under applicable law.

     The Company shall not be liable under this Article V to make any payment of amounts otherwise indemnifiable hereunder if, but only to the extent that, Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

     In the event of any payment hereunder, the Company shall be subrogated to the extent of such payment to all the rights of recovery of Indemnitee, who shall execute all papers required and take all action reasonably requested by the Company to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

     Section 14. Severability. If any provision or provisions of this Article V shall be held to be invalid, illegal or unenforceable for any reason whatsoever, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby; and, to the fullest extent possible, the provisions of this Article V shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

     Section 15. Certain Actions for Which Indemnification Is Not Provided. Notwithstanding any other provision of this Article V, no person shall be entitled to indemnification or advancement of Expenses under this Article V with respect to any Proceeding, or any Matter therein, brought or made by such person against the Company.

     Section 16. Definitions. For purposes of this Article V:

     “Change of Control” means a change in control of the Company after both the Trigger Date and the date Indemnitee acquired his Corporate Status, which shall be deemed to have occurred in any one of the following circumstances occurring after such date: (i) there shall have occurred an event required to be reported with respect to the Company in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Exchange Act, whether or not the Company is then subject to such reporting requirement; (ii) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) shall have become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 40% or more of the combined voting power of the Company’s then outstanding voting securities without prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person attaining such percentage interest; (iii) the Company is a party to a merger, consolidation, sale of assets or other reorganization, or a proxy contest, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iv) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors (including, for this purpose, any new director whose election or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that

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notwithstanding the foregoing, the distribution of the shares of the Company’s common stock by REI to its shareholders shall not be a Change of Control.

     “Corporate Status” describes the status of Indemnitee as a director, officer, employee, agent or fiduciary of the Company or of any other corporation, partnership, limited liability company, association, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the request of the Company.

     “Court” means the Court of Chancery of the State of Delaware or any other court of competent jurisdiction.

     “Designated Professional Capacity” shall include, but not be limited to, a physician, nurse, psychologist or therapist, registered surveyor, registered engineer, registered architect, attorney, certified public accountant or other person who renders such professional services within the course and scope of his employment, who is licensed by appropriate regulatory authorities to practice such profession and who, while acting in the course of such employment, committed or is alleged to have committed any negligent acts, errors or omissions in rendering such professional services at the request of the Company or pursuant to his employment (including, without limitation, rendering written or oral opinions to third parties).

     “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.

     “Indemnitee” includes any officer or director of the Company who is, or is threatened to be made, a witness in or a party to any Proceeding as described in Article V, Section 1 (General) or Section 2 (Expenses) by reason of his Corporate Status.

     “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the five years previous to his selection or appointment has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.

     “Matter” is a claim, a material issue or a substantial request for relief.

     “Proceeding” includes any action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative, except one initiated by an Indemnitee pursuant to Article V, Section 10 (Adjudication) to enforce his rights under this Article V.

     Section 17. Notices. Promptly after receipt by Indemnitee of notice of the commencement of any action, suit or proceeding, Indemnitee shall, if he anticipates or contemplates making a claim for expenses or an advance pursuant to the terms of this Article V, notify the Company of the commencement of such action, suit or proceeding; provided, however, that any delay in so notifying the Company shall not constitute a waiver or release by Indemnitee

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of rights hereunder and that any omission by Indemnitee to so notify the Company shall not relieve the Company from any liability that it may have to Indemnitee otherwise than under this Article V. Any communication required or permitted to the Company shall be addressed to the Corporate Secretary of the Company and any such communication to Indemnitee shall be addressed to Indemnitee’s address as shown on the Company’s records unless he specifies otherwise and shall be personally delivered or delivered by overnight mail delivery. Any such notice shall be effective upon receipt.

     Section 18. Contractual Rights. The right to be indemnified or to the advancement or reimbursement of Expenses (i) is a contract right based upon good and valuable consideration, pursuant to which Indemnitee may sue as if these provisions were set forth in a separate written contract between Indemnitee and the Company, (ii) is and is intended to be retroactive and shall be available as to events occurring prior to the adoption of these provisions and (iii) shall continue after any rescission or restrictive modification of such provisions as to events occurring prior thereto.

     Section 19. Indemnification of Employees, Agents and Fiduciaries. The Company, by adoption of a resolution of the Board of Directors, may indemnify and advance expenses to a person who is an employee (including an employee acting in his Designated Professional Capacity), agent or fiduciary of the Company including any such person who is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of any other corporation, partnership, joint venture, limited liability company, trust, employee benefit plan or other enterprise to the same extent and subject to the same conditions (or to such lesser extent and/or with such other conditions as the Board of Directors may determine) under which it may indemnify and advance expenses to an Indemnitee under this Article V.

ARTICLE VI

MISCELLANEOUS PROVISIONS

     Section 1. Offices. The address of the registered office of the Company in the State of Delaware is Corporation Trust Center, 1209 Orange Street, City of Wilmington, County of New Castle, 19801, and the name of the registered agent of the Company at such address is The Corporation Trust Company. The principal office of the Company shall be located in Houston, Texas, unless and until changed by resolution of the Board of Directors. The Company may also have offices at such other places as the Board of Directors may designate from time to time, or as the business of the Company may require. The principal office and registered office may be, but need not be, the same.

     Section 2. Resignations. Any director or officer may resign at any time. Such resignations shall be made in writing and shall take effect at the time specified therein, or, if no time is specified, at the time of its receipt by the Chairman of the Board, if there is one, the Chief Executive Officer, if there is one, the President or the Corporate Secretary. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

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     Section 3. Seal. The Corporate Seal shall be circular in form, shall have inscribed thereon the name of the Company and may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced.

     Section 4. Separability. If one or more of the provisions of these Bylaws shall be held to be invalid, illegal or unenforceable, such invalidity, illegality or unenforceability shall not affect any other provision hereof and these Bylaws shall be construed as if such invalid, illegal or unenforceable provision or provisions had never been contained herein.

ARTICLE VII

AMENDMENT OF BYLAWS

     Section 1. Vote Requirements. The Board of Directors is expressly empowered to adopt, amend or repeal these Bylaws. Any adoption, amendment or repeal of these Bylaws by the Board of Directors shall require the affirmative vote of at least 80% of all directors then in office at any regular or special meeting of the Board of Directors called for that purpose.

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EX-10.2.B

Exhibit 10.2B

Tax Allocation Agreement
Examples of Calculations Pursuant to Sections 5.6 (c), (d), (f), and (g).
(all amounts in $000)

Example 1

Facts:

1.

As a result of a Redetermination (“First Redetermination”) for the REI Consolidated Group Consolidated Return for the year 1999 (a Pre-Distribution Period), a Temporary Tax Adjustment (“First Temporary Tax Adjustment”) with a negative value arises from an increase of $22,857 to items of expense from the amount reported on the REI Consolidated Group Consolidated Return for the year 1999. The First Temporary Tax Adjustment is not an RES Temporary Tax Adjustment. The First Redetermination is the first Redetermination that has occurred since the effective date of the Tax Allocation Agreement, and the only Temporary Tax Adjustment resulting from the First Redetermination is the First Temporary Tax Adjustment.

2.

As a result of a Redetermination (“Second Redetermination”) for the REI Consolidated Group Consolidated Return for the year 2000 (a Pre-Distribution Period), a Temporary Tax Adjustment (“Second Temporary Tax Adjustment”) with a positive value arises from a decrease of $142,857 to items of expense from the amount reported on the REI Consolidated Group Consolidated Return for the year 2000. The Second Temporary Tax Adjustment is not an RES Temporary Tax Adjustment. No Redetermination with respect to an REI Consolidated Group Consolidated Return occurred after the First Redetermination and before the Second Redetermination. The only Temporary Tax Adjustment resulting from the Second Redetermination is the Second Temporary Tax Adjustment.

Calculations for First Redetermination:

Step 1: calculate value of First Temporary Tax Adjustment pursuant to Section 5.6(c):

First Redetermination increase to items of expense from the amount reported on the REI Consolidated Group Consolidated Return for the year 1999	($22,857	)
Highest Federal Income Tax Rate applicable to corporations in effect during the Pre-Distribution Period to which the Redetermination that produced such First Temporary Tax Adjustment relates.	35	%
Value of First Temporary Tax Adjustment	($8,000	)

1

Step 2: determine Temporary Tax Adjustment Balance pursuant to Section 5.6(d):

The cumulative value of the Temporary Tax Adjustments that have occurred prior to the First Redetermination pursuant to Section 5.6(c)	$	0
Value of First Temporary Tax Adjustment pursuant to Section 5.6(c) (First Redetermination, Step 1)		($8,000	)
Temporary Tax Adjustment Balance pursuant to Section 5.6(d)		($8,000	)

Step 3: calculate Temporary Tax Adjustment Payment Balance pursuant to Section 5.6(f):

The cumulative value of the Temporary Tax Adjustment Payments that have occurred prior to the First Redetermination pursuant to 5.6(f)(i)	$	0
First Redetermination — Temporary Tax Adjustment Payment from REI to Unregco (First Redetermination, Step 4)		($7,000	)
Temporary Tax Adjustment Payment Balance (post First Redetermination)		($7,000	)

Step 4: calculate Temporary Tax Adjustment Payment pursuant to Section 5.6(g):

Temporary Tax Adjustment Payment Balance immediately before First Redetermination	$	0
Temporary Tax Adjustment Balance (First Redetermination, Step 2)		($8,000	)
Amount by which Temporary Tax Adjustment Balance is less than (-$1,000), represented as a negative amount		($7,000	)
Temporary Tax Adjustment Payment from REI to Unregco		($7,000	)

2

Calculations for Second Redetermination:

Step 1: calculate value of Second Temporary Tax Adjustment pursuant to Section 5.6(c):

Second Redetermination decrease to items of expense from the amount reported on the REI Consolidated Group Consolidated Return for the year 2000	$	142,857
Highest Federal Income Tax Rate applicable to corporations in effect during the Pre-Distribution Period to which the Redetermination that produced such Temporary Tax Adjustment relates.		35	%
Value of Second Temporary Tax Adjustment	$	50,000

Step 2: determine Temporary Tax Adjustment Balance pursuant to Section 5.6(d):

The cumulative value of the Temporary Tax Adjustments that have occurred prior to the Second Redetermination pursuant to Section 5.6(c) (First Redetermination, Step 2)		($8,000	)
Value of Second Temporary Tax Adjustment pursuant to Section 5.6(c) (Second Redetermination, Step 1)	$	50,000
Temporary Tax Adjustment Balance pursuant to Section 5.6(d)	$	42,000

Step 3: calculate Temporary Tax Adjustment Payment Balance pursuant to Section 5.6(f):

Temporary Tax Adjustment Payment Balance (First Redetermination, Step 3)		($7,000	)
Temporary Tax Adjustment Payment (Second Redetermination, Step 4)	$	34,000
Temporary Tax Adjustment Payment Balance (post Second Redetermination)	$	27,000

3

Step 4: calculate Temporary Tax Adjustment Payment pursuant to Section 5.6(g):

Temporary Tax Adjustment Balance (Second Redetermination, Step 2)	$	42,000
Temporary Tax Adjustment Payment Balance (First Redetermination, Step 3)		($7,000	)
Amount by which Temporary Tax Adjustment Balance is greater than
$15,000	$	27,000
Temporary Tax Adjustment Payment from Unregco to REI	$	34,000

4

Tax Allocation Agreement
Examples of Calculations Pursuant to Sections 5.6 (c), (d), (f), and (g).
(all amounts in $000)

Example 2

Facts:

1.

As a result of a Redetermination (“First Redetermination”) for the REI Consolidated Group Consolidated Return for the year 1999 (a Pre-Distribution Period), a Temporary Tax Adjustment (“First Temporary Tax Adjustment”) with a negative value arises from an increase of $22,857 to items of expense from the amount reported on the REI Consolidated Group Consolidated Return for the year 1999. The First Temporary Tax Adjustment is not an RES Temporary Tax Adjustment. The First Redetermination is the first Redetermination that has occurred since the effective date of the Tax Allocation Agreement, and the only Temporary Tax Adjustment resulting from the First Redetermination is the First Temporary Tax Adjustment.

2.

As a result of a Redetermination (“Second Redetermination”) for the REI Consolidated Group Consolidated Return for the year 2000 (a Pre-Distribution Period), a Temporary Tax Adjustment (“Second Temporary Tax Adjustment”) with a positive value arises from a decrease of $14,286 to items of expense from the amount reported on the REI Consolidated Group Consolidated Return for the year 2000. The Second Temporary Tax Adjustment is not an RES Temporary Tax Adjustment. No Redetermination with respect to an REI Consolidated Group Consolidated Return occurred after the First Redetermination and before the Second Redetermination. The only Temporary Tax Adjustment resulting from the Second Redetermination is the Second Temporary Tax Adjustment.

Calculations for First Redetermination:

Step 1: calculate value of First Temporary Tax Adjustment pursuant to Section 5.6(c):

First Redetermination increase to items of expense from the amount reported on the REI Consolidated Group Consolidated Return for the year 1999	($22,857	)
Highest Federal Income Tax Rate applicable to corporations in effect during the Pre-Distribution Period to which the Redetermination that produced such First Temporary Tax Adjustment relates.	35	%
Value of First Temporary Tax Adjustment	($8,000	)

1

Step 2: determine Temporary Tax Adjustment Balance pursuant to Section 5.6(d):

The cumulative value of the Temporary Tax Adjustments that have occurred prior to the First Redetermination pursuant to Section 5.6(c)	$	0
Value of First Temporary Tax Adjustment pursuant to Section 5.6(c) (First Redetermination, Step 1)		($8,000	)
Temporary Tax Adjustment Balance pursuant to Section 5.6(d)		($8,000	)

Step 3: calculate Temporary Tax Adjustment Payment Balance pursuant to Section 5.6(f):

The cumulative value of the Temporary Tax Adjustment Payments that have occurred prior to the First Redetermination pursuant to 5.6(f)(i)	$	0
First Redetermination — Temporary Tax Adjustment Payment from REI to Unregco (First Redetermination, Step 4)		($7,000	)
Temporary Tax Adjustment Payment Balance (post First Redetermination)		($7,000	)

Step 4: calculate Temporary Tax Adjustment Payment pursuant to Section 5.6(g):

Temporary Tax Adjustment Payment Balance immediately before First Redetermination	$	0
Temporary Tax Adjustment Balance (First Redetermination, Step 2)		($8,000	)
Amount by which Temporary Tax Adjustment Balance is less than (-$1,000), represented as a negative amount		($7,000	)
Temporary Tax Adjustment Payment from REI to Unregco		($7,000	)

2

Calculations for Second Redetermination:

Step 1: calculate value of Second Temporary Tax Adjustment pursuant to Section 5.6(c):

Second Redetermination decrease to items of expense from the amount reported on the REI Consolidated Group Consolidated Return for the year 2000	$	14,286
Highest Federal Income Tax Rate applicable to corporations in effect during the Pre-Distribution Period to which the Redetermination that produced such Second Temporary Tax Adjustment relates.		35	%
Value of Second Temporary Tax Adjustment	$	5,000

Step 2: determine Temporary Tax Adjustment Balance pursuant to Section 5.6(d):

The cumulative value of the Temporary Tax Adjustments that have occurred prior to the Second Redetermination pursuant to Section 5.6(c) (First Redetermination, Step 2)		($8,000	)
Value of Second Temporary Tax Adjustment pursuant to Section 5.6(c) (Second Redetermination, Step 1)	$	5,000
Temporary Tax Adjustment Balance pursuant to Section 5.6(d)		($3,000	)

Step 3: calculate Temporary Tax Adjustment Payment Balance pursuant to Section 5.6(f):

Temporary Tax Adjustment Payment Balance (First Redetermination, Step 3)		($7,000	)
Temporary Tax Adjustment Payment (Second Redetermination, Step 4)	$	5,000
Temporary Tax Adjustment Payment Balance (post Second Redetermination)		($2,000	)

3

Step 4: calculate Temporary Tax Adjustment Payment pursuant to Section 5.6(g):

Temporary Tax Adjustment Balance (Second Redetermination, Step 2)		($3,000	)
Temporary Tax Adjustment Payment Balance (First Redetermination, Step 3)		($7,000	)
Amount by which Temporary Tax Adjustment Balance is less than ($1,000), represented as a negative amount		($2,000	)
Temporary Tax Adjustment Payment from Unregco to REI	$	5,000

4

Tax Allocation Agreement
Examples of Calculations Pursuant to Sections 5.6 (c), (d), (f), and (g).
(all amounts in $000)

Example 3

Facts:

1.

As a result of a Redetermination (“First Redetermination”) for the REI Consolidated Group Consolidated Return for the year 1999 (a Pre-Distribution Period), a Temporary Tax Adjustment (“First Temporary Tax Adjustment”) with a positive value arises from a decrease of $142,857 to items of expense from the amount reported on the REI Consolidated Group Consolidated Returns for the year 1999. The First Temporary Tax Adjustment is not an RES Temporary Tax Adjustment. The First Redetermination is the first Redetermination that has occurred since the effective date of the Tax Allocation Agreement, and the only Temporary Tax Adjustment resulting from the First Redetermination is the First Temporary Tax Adjustment.

2.

As a result of a Redetermination (“Second Redetermination”) for the REI Consolidated Group Consolidated Returns for the year 2000 (a Pre-Distribution Period), a Temporary Tax Adjustment (“Second Temporary Tax Adjustment”) with a negative value arises from an increase of $22,857 to items of expense from the amount reported on the REI Consolidated Group Consolidated Return for the year 2000. The Second Temporary Tax Adjustment is not an RES Temporary Tax Adjustment. No Redetermination with respect to an REI Consolidated Group Consolidated Return occurred after the First Redetermination and before the Second Redetermination. The only Temporary Tax Adjustment resulting from the Second Redetermination is the Second Temporary Tax Adjustment.

Calculations for First Redetermination:

Step 1: calculate value of First Temporary Tax Adjustment pursuant to Section 5.6(c):

First Redetermination decrease to items of expense from the amount reported on the REI Consolidated Group Consolidated Return for the year 1999	$	142,857
Highest Federal Income Tax Rate applicable to corporations in effect during the Pre-Distribution Period to which the Redetermination that produced such First Temporary Tax Adjustment relates.		35	%
Value of First Temporary Tax Adjustment	$	50,000

1

Step 2: determine Temporary Tax Adjustment Balance pursuant to Section 5.6(d):

The cumulative value of the Temporary Tax Adjustments that have occurred prior to the First Redetermination pursuant to Section 5.6(c)	$	0
Value of First Temporary Tax Adjustment pursuant to Section 5.6(c) (First Redetermination, Step 1)	$	50,000
Temporary Tax Adjustment Balance pursuant to Section 5.6(d)	$	50,000

Step 3: calculate Temporary Tax Adjustment Payment Balance pursuant to Section 5.6(f):

The cumulative value of the Temporary Tax Adjustment Payments that have occurred prior to the First Redetermination pursuant to 5.6(f)(i)	$	0
First Redetermination — Temporary Tax Adjustment Payment from Unregco to REI (First Redetermination, Step 4)	$	35,000
Temporary Tax Adjustment Payment Balance (post First Redetermination)	$	35,000

Step 4: calculate Temporary Tax Adjustment Payment pursuant to Section 5.6(g):

Temporary Tax Adjustment Balance immediately before First Redetermination	$	0
Temporary Tax Adjustment Balance (First Redetermination, Step 2)	$	50,000
Amount by which Temporary Tax Adjustment Balance is greater than $15,000	$	35,000
Temporary Tax Adjustment Payment from Unregco to REI	$	35,000

2

Calculations for Second Redetermination:

Step 1: calculate value of Second Temporary Tax Adjustment pursuant to Section 5.6(c):

Second Redetermination increase to items of expense from the amount reported on the REI Consolidated Group Consolidated Return for the year 2000	($22,857	)
Highest Federal Income Tax Rate applicable to corporations in effect during the Pre-Distribution Period to which the Redetermination that produced such Second Temporary Tax Adjustment relates.	35	%
Value of SecondTemporary Tax Adjustment	($8,000	)

Step 2: determine Temporary Tax Adjustment Balance pursuant to Section 5.6(d):

The cumulative value of the Temporary Tax Adjustments that have occurred prior to the Second Redetermination pursuant to Section 5.6(c) (First Redetermination, Step 2)	$	50,000
Value of Second Temporary Tax Adjustment pursuant to Section 5.6(c) (Second Redetermination, Step 1)		($8,000	)
Temporary Tax Adjustment Balance pursuant to Section 5.6(d)	$	42,000

Step 3: calculate Temporary Tax Adjustment Payment Balance pursuant to Section 5.6(f):

Temporary Tax Adjustment Payment Balance (First Redetermination, Step 3)	$	35,000
Temporary Tax Adjustment Payment (Second Redetermination, Step 4)		($8,000	)
Temporary Tax Adjustment Payment Balance (post Second Redetermination)	$	27,000

3

Step 4: calculate Temporary Tax Adjustment Payment pursuant to Section 5.6(g)(i), (ii), or (iii):

Temporary Tax Adjustment Balance (Second Redetermination, Step 2)	$	42,000
Temporary Tax Adjustment Payment Balance (First Redetermination, Step 3)	$	35,000
Amount by which Temporary Tax Adjustment Balance is greater than $15,000	$	27,000
Temporary Tax Adjustment Payment from REI to Unregco		($8,000	)

4

Tax Allocation Agreement
Examples of Calculations Pursuant to Sections 5.6 (c), (d), (f), and (g).
(all amounts in $000)

Example 4

Facts:

1.

As a result of a Redetermination (“First Redetermination”) for the REI Consolidated Group Consolidated Return for the year 1999 (a Pre-Distribution Period), a Temporary Tax Adjustment (“First Temporary Tax Adjustment”) with a negative value arises from an increase of $22,857 to items of expense from the amount reported on the REI Consolidated Group Consolidated Return for the year 1999. The First Temporary Tax Adjustment is not an RES Temporary Tax Adjustment. The First Redetermination is the first Redetermination that has occurred since the effective date of the Tax Allocation Agreement, and the only Temporary Tax Adjustment resulting from the First Redetermination is the First Temporary Tax Adjustment.

2.

As a result of a Redetermination (“Second Redetermination”) for the REI Consolidated Group Consolidated Return for the year 2000 (a Pre-Distribution Period), a Temporary Tax Adjustment (“Second Temporary Tax Adjustment”) with a positive value arises from a decrease of $28,571 to items of expense from the amount reported on the REI Consolidated Group Consolidated Return for the year 2000. The Second Temporary Tax Adjustment is not an RES Temporary Tax Adjustment. No Redetermination with respect to an REI Consolidated Group Consolidated Return occurred after the First Redetermination and before the Second Redetermination. The only Temporary Tax Adjustment resulting from the Second Redetermination is the Second Temporary Tax Adjustment.

Calculations for First Redetermination:

Step 1: calculate value of First Temporary Tax Adjustment pursuant to Section 5.6(c):

First Redetermination increase to items of expense from the amount reported on the REI Consolidated Group Consolidated Return for the year 1999	($22,857	)
Highest Federal Income Tax Rate applicable to corporations in effect during the Pre-Distribution Period to which the Redetermination that produced such First Temporary Tax Adjustment relates.	35	%
Value of First Temporary Tax Adjustment	($8,000	)

1

Step 2: determine Temporary Tax Adjustment Balance pursuant to Section 5.6(d):

The cumulative value of the Temporary Tax Adjustments that have occurred prior to the First Redetermination pursuant to Section 5.6(c)	$	0
Value of First Temporary Tax Adjustment pursuant to Section 5.6(c) (First Redetermination, Step 1)		($8,000	)
Temporary Tax Adjustment Balance pursuant to Section 5.6(d)		($8,000	)

Step 3: calculate Temporary Tax Adjustment Payment Balance pursuant to Section 5.6(f):

The cumulative value of the Temporary Tax Adjustment Payments that have occurred prior to the First Redetermination pursuant to 5.6(f)(i)	$	0
First Redetermination — Temporary Tax Adjustment Payment from REI to Unregco (First Redetermination, Step 4)		($7,000	)
Temporary Tax Adjustment Payment Balance (post First Redetermination		($7,000	)

Step 4: calculate Temporary Tax Adjustment Payment pursuant to Section 5.6(g):

Temporary Tax Adjustment Payment Balance immediately before First Redetermination	$	0
Temporary Tax Adjustment Balance (First Redetermination, Step 2)		($8,000	)
Amount by which Temporary Tax Adjustment Balance is less than (-$1,000), represented as a negative amount		($7,000	)
Temporary Tax Adjustment Payment from REI to Unregco		($7,000	)

2

Calculations for Second Redetermination:

Step 1: calculate value of Second Temporary Tax Adjustment pursuant to Section 5.6(c):

Second Redetermination decrease to items of expense from the amount reported on the REI Consolidated Group Consolidated Return for the year 2000	$	28,571
Highest Federal Income Tax Rate applicable to corporations in effect during the Pre-Distribution Period to which the Redetermination that produced such Temporary Tax Adjustment relates.		35	%
Value of Second Temporary Tax Adjustment	$	10,000

Step 2: determine Temporary Tax Adjustment Balance pursuant to Section 5.6(d):

The cumulative value of the Temporary Tax Adjustments that have occurred prior to the Second Redetermination pursuant to Section 5.6(c) (First Redetermination, Step 2)		($8,000	)
Value of Second Temporary Tax Adjustment pursuant to Section 5.6(c) (Second Redetermination, Step 1)	$	10,000
Temporary Tax Adjustment Balance pursuant to Section 5.6(d)	$	2,000

Step 3: calculate Temporary Tax Adjustment Payment Balance pursuant to Section 5.6(f):

Temporary Tax Adjustment Payment Balance (First Redetermination, Step 3)		($7,000	)
Temporary Tax Adjustment Payment (Second Redetermination, Step 4)	$	7,000
Temporary Tax Adjustment Payment Balance (post Second Redetermination)	$	0

3

Step 4: calculate Temporary Tax Adjustment Payment pursuant to Section 5.6(g):

Temporary Tax Adjustment Balance (Second Redetermination, Step 2)	$	2,000
Temporary Tax Adjustment Payment Balance (First Redetermination, Step 3)		($7,000	)
Needed value for Temporary Tax Adjustment Balance pursuant to Section 5.6(g)(ii)	$	0
Temporary Tax Adjustment Payment from Unregco to REI	$	7,000

4

EX-10.5.B

Exhibit 10.5B

EXHIBIT C

FORM OF SUPPLEMENT

WHEN RECORDED MAIL TO:
	SPACE ABOVE THIS LINE FOR RECORDER’S USE

[FIRST] [SECOND] [ETC.] SUPPLEMENT TO
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FINANCING STATEMENT

THIS INSTRUMENT SUPPLEMENTS THAT CERTAIN AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FINANCING STATEMENT DATED ____________ ___, 20___ AND RECORDED ON _______________ ___, 20____ IN THE OFFICE OF THE RECORDER OF DEEDS IN AND FOR INDIANA COUNTY, PENNSYLVANIA IN RECORD BOOK ______,

PAGE ___.

      THIS [FIRST] [SECOND] [ETC.] SUPPLEMENT TO MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FINANCING STATEMENT (“Supplement”) is made as of this ______ day of ______, 2___ but is to be effective as of the ___ day of ___, 20___ (“Effective Date”), between RELIANT ENERGY SEWARD, LLC, a Delaware limited liability company (the “Mortgagor”), having an address at 1000 Main Street, Houston, Texas 77002, and J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association] (the “Mortgagee”), having an address at One Liberty Place, 1650 Market Street, Suite 4700 Philadelphia, Pennsylvania 19103, Attention: Institutional Trust Services, not in its individual capacity, but solely as Collateral Trustee under the Collateral Trust Agreement, and for the ratable benefit of the Secured Parties from time to time entitled to the benefits of the Collateral Trust Agreement (collectively, the “Secured Parties”).

     All capitalized terms used in this Instrument without definition shall have the respective meanings ascribed to such terms in that certain Mortgage, Assignment of Leases and Rents, Security Agreement and Financing Statement dated ______________ ___, 20___ and recorded on ______________ ______, 20___ in the officer of the Recorder of Deeds in and for Indiana County, Pennsylvania in Record Book ___, Page ___ (as the same may be amended, amended and restated, supplemented or otherwise modified, renewed or replaced from time to time, the “Existing Mortgage”).

     WHEREAS, as contemplated by the Collateral Trust Agreement, the Mortgagor has designated the [  ] Bonds that are supported by Permitted PEDFA Bond Indebtedness in the principal amount of [$_______________], and any related Obligations, as constituting Secured Obligations to be secured by this Instrument (the “Additional Series of Secured Debt”) and, in connection therewith, the Mortgagor has agreed to execute and deliver this Supplement to the Mortgagee.

     NOW, THEREFORE, in consideration of the premises, each of the Mortgagor and the Mortgagee hereby agrees to, and they do hereby, supplement, modify and amend the Existing Mortgage as follows:

     1. ADDITIONAL SECURED DEBT. The Additional Series of Secured Debt is Secured Debt and, together with all other Series of Secured Debt described in the Existing Mortgage, constitute Secured Obligations under the Existing Mortgage. The due and punctual payment and performance of the Additional Series of Secured Debt, together with all other Series of Secured Debt described in the Existing Mortgage, are secured Equally and Ratably by the Existing Mortgage and all other liens, security interests and assignments held by the Mortgagee pursuant to the Collateral Trust Agreement as security for the Secured Obligations. In order to further evidence the foregoing and confirm that the liens, security interests and assignments granted in the Existing Mortgage secure the Additional Series of Secured Debt, the term Secured Obligations in the Existing Mortgage is hereby amended to expressly state that all of the Additional Series of Secured Debt are included in the Secured Obligations secured by the Existing Mortgage. All liens, security interests and assignments granted to the Mortgagee in the Existing Mortgage are hereby ratified and confirmed as securing the Additional Series of Secured Debt. Accordingly, the holders of the Additional Series of Secured Debt are entitled to the benefits of the Collateral Trust Agreement and are Secured Parties under the Existing Mortgage, together with all other Secured Parties under all other Series of Secured Debt. Pursuant to the Existing Mortgage, the Mortgagor has, and does hereby, grant, bargain, sell, mortgage, warrant, convey, alien, demise, release, assign, transfer, set over, deliver, confirm and convey to the Mortgagee, its successors, assigns and transferees upon the terms and conditions of the Existing Mortgage, and subject to the Permitted Encumbrances, all of the Mortgaged Property to secure the Additional Series of Secured Debt as part of the Secured Obligations.

     2. EFFECT OF SUPPLEMENT. The Mortgagor and the Mortgagee agree that the provisions of this Supplement shall not adversely affect or impair the Existing Mortgage and that the liens, security interests, assignments and rights evidenced thereby shall remain in full force and effect and shall be increased and carried forward to secure all Secured Obligations, the purpose of this instrument being simply to supplement, modify and amend the Existing Mortgage to further evidence that it also secures the Additional Series of Secured Debt. All of the terms and provisions of the Existing Mortgage shall be and remain in full force and effect as therein written and as herein supplemented, modified and amended.

     3. DUPLICATE ORIGINALS. This Supplement may be executed in any number of duplicate originals and each duplicate original shall be deemed to be an original.

     IN WITNESS WHEREOF, intending to be legally bound hereby, the Mortgagor and the Mortgagee have executed this instrument as of the day and year set forth above but effective as of the Effective Date.

(SEAL)	MORTGAGOR: RELIANT ENERGY SEWARD, LLC, a Delaware limited liability company
	By:
		Name:
		Title:

(SEAL)	MORTGAGEE: J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION a national banking association, as Collateral Trustee
	By:
		Name:
		Title:

     Certification of Address. I do hereby certify that the address of the above-named Mortgagee is:

By:
	Name:
	Title:

STATE OF	Section
		Section
COUNTY OF		Section

The foregoing instrument was acknowledged before me this ___ day of _________, 20___ by _________, as _________ of Reliant Energy Seward, LLC, a Delaware limited liability company. He is personally known to me or has produced ____________ as identification.

Print Name:	Notary Public
Serial No.:
Expiration:

My Commission expires:
STATE OF	Section
		Section
COUNTY OF		Section

The foregoing instrument was acknowledged before me this ______ day of ____________, 20___ by _________, as ___ of __________, a ____________. He is personally known to me or who has produced _____________________ as identification.

Print Name:	Notary Public
Serial No.:
Expiration:

My Commission expires:

EX-10.6.B

Exhibit 10.6B

EXHIBIT C

FORM OF SUPPLEMENT

WHEN RECORDED MAIL TO:

                     SPACE ABOVE THIS LINE FOR RECORDER’S USE

[FIRST] [SECOND] [ETC.] SUPPLEMENT TO
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FINANCING STATEMENT

THIS INSTRUMENT SUPPLEMENTS THAT CERTAIN AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FINANCING STATEMENT DATED                         ___, 20___ AND RECORDED ON                         ___, 20___ IN THE OFFICE OF THE RECORDER OF DEEDS IN AND FOR INDIANA COUNTY, PENNSYLVANIA IN RECORD BOOK ___, PAGE ___.

     THIS [FIRST] [SECOND] [ETC.] SUPPLEMENT TO MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FINANCING STATEMENT (“Supplement”) is made as of this ___ day of _______, 2___ but is to be effective as of the ___ day of ___, 20___ (“Effective Date”), between RELIANT ENERGY SEWARD, LLC, a Delaware limited liability company (the “Mortgagor”), having an address at 1000 Main Street, Houston, Texas 77002, and J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association] (the “Mortgagee”), having an address at One Liberty Place, 1650 Market Street, Suite 4700 Philadelphia, Pennsylvania 19103, Attention: Institutional Trust Services, not in its individual capacity, but solely as Collateral Trustee under the Collateral Trust Agreement, and for the ratable benefit of the Secured Parties from time to time entitled to the benefits of the Collateral Trust Agreement (collectively, the “Secured Parties”).

     All capitalized terms used in this Instrument without definition shall have the respective meanings ascribed to such terms in that certain Mortgage, Assignment of Leases and Rents, Security Agreement and Financing Statement dated                      ___, 20___ and recorded on                      ___, 20___ in the officer of the Recorder of Deeds in and for Indiana County, Pennsylvania in Record Book ___, Page ___ (as the same may be amended, amended and restated, supplemented or otherwise modified, renewed or replaced from time to time, the “Existing Mortgage”).

     WHEREAS, as contemplated by the Collateral Trust Agreement, the Mortgagor has designated the [                    ] Bonds that are supported by Permitted PEDFA Bond Indebtedness in the principal amount of [$                                        ], and any related Obligations, as constituting Secured Obligations to be secured by this Instrument (the “Additional Series of Secured Debt”) and, in connection therewith, the Mortgagor has agreed to execute and deliver this Supplement to the Mortgagee.

     NOW, THEREFORE, in consideration of the premises, each of the Mortgagor and the Mortgagee hereby agrees to, and they do hereby, supplement, modify and amend the Existing Mortgage as follows:

     1. ADDITIONAL SECURED DEBT. The Additional Series of Secured Debt is Secured Debt and, together with all other Series of Secured Debt described in the Existing Mortgage, constitute Secured Obligations under the Existing Mortgage. The due and punctual payment and performance of the Additional Series of Secured Debt, together with all other Series of Secured Debt described in the Existing Mortgage, are secured Equally and Ratably by the Existing Mortgage and all other liens, security interests and assignments held by the Mortgagee pursuant to the Collateral Trust Agreement as security for the Secured Obligations. In order to further evidence the foregoing and confirm that the liens, security interests and assignments granted in the Existing Mortgage secure the Additional Series of Secured Debt, the term Secured Obligations in the Existing Mortgage is hereby amended to expressly state that all of the Additional Series of Secured Debt are included in the Secured Obligations secured by the Existing Mortgage. All liens, security interests and assignments granted to the Mortgagee in the Existing Mortgage are hereby ratified and confirmed as securing the Additional Series of Secured Debt. Accordingly, the holders of the Additional Series of Secured Debt are entitled to the benefits of the Collateral Trust Agreement and are Secured Parties under the Existing Mortgage, together with all other Secured Parties under all other Series of Secured Debt. Pursuant to the Existing Mortgage, the Mortgagor has, and does hereby, grant, bargain, sell, mortgage, warrant, convey, alien, demise, release, assign, transfer, set over, deliver, confirm and convey to the Mortgagee, its successors, assigns and transferees upon the terms and conditions of the Existing Mortgage, and subject to the Permitted Encumbrances, all of the Mortgaged Property to secure the Additional Series of Secured Debt as part of the Secured Obligations.

     2. EFFECT OF SUPPLEMENT. The Mortgagor and the Mortgagee agree that the provisions of this Supplement shall not adversely affect or impair the Existing Mortgage and that the liens, security interests, assignments and rights evidenced thereby shall remain in full force and effect and shall be increased and carried forward to secure all Secured Obligations, the purpose of this instrument being simply to supplement, modify and amend the Existing Mortgage to further evidence that it also secures the Additional Series of Secured Debt. All of the terms and provisions of the Existing Mortgage shall be and remain in full force and effect as therein written and as herein supplemented, modified and amended.

     3. DUPLICATE ORIGINALS. This Supplement may be executed in any number of duplicate originals and each duplicate original shall be deemed to be an original.

     IN WITNESS WHEREOF, intending to be legally bound hereby, the Mortgagor and the Mortgagee have executed this instrument as of the day and year set forth above but effective as of the Effective Date.

(SEAL)	MORTGAGOR: RELIANT ENERGY SEWARD, LLC, a Delaware limited liability company
	By:
		Name:
		Title:

(SEAL)	MORTGAGEE: J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION a national banking association, as Collateral Trustee
	By:
		Name:
		Title:

     Certification of Address. I do hereby certify that the address of the above-named Mortgagee is:

By:
	Name:
	Title:

STATE OF	Section
	Section
COUNTY OF	Section

The foregoing instrument was acknowledged before me this ___ day of                     , 20___ by                                           , as                                          of Reliant Energy Seward, LLC, a Delaware limited liability company. He is personally known to me or has produced                                            as identification.

Print Name:	Notary Public
Serial No.:
Expiration:

My Commission expires:

STATE OF	Section
	Section
COUNTY OF	Section

The foregoing instrument was acknowledged before me this ___ day of                      , 20___ by                                           , as                                            of                                           , a                                           . He is personally known to me or who has produced                                             as identification.

Print Name:	Notary Public
Serial No.:
Expiration:

My Commission expires:

EX-10.7.B

Exhibit 10.7B

EXHIBIT C

FORM OF SUPPLEMENT

WHEN RECORDED MAIL TO:

SPACE ABOVE THIS LINE FOR RECORDER’S USE

[FIRST] [SECOND] [ETC.] SUPPLEMENT TO
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FINANCING STATEMENT

THIS INSTRUMENT SUPPLEMENTS THAT CERTAIN AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FINANCING STATEMENT DATED                      ___, 20___ AND RECORDED ON                      ___, 20___ IN THE OFFICE OF THE RECORDER OF DEEDS IN AND FOR INDIANA COUNTY, PENNSYLVANIA IN RECORD BOOK ___, PAGE ___.

     THIS [FIRST] [SECOND] [ETC.] SUPPLEMENT TO MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FINANCING STATEMENT (“Supplement”) is made as of this ___ day of ___, 2___ but is to be effective as of the ___ day of ___, 20___ (“Effective Date”), between RELIANT ENERGY SEWARD, LLC, a Delaware limited liability company (the “Mortgagor”), having an address at 1000 Main Street, Houston, Texas 77002, and J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association] (the “Mortgagee”), having an address at One Liberty Place, 1650 Market Street, Suite 4700 Philadelphia, Pennsylvania 19103, Attention: Institutional Trust Services, not in its individual capacity, but solely as Collateral Trustee under the Collateral Trust Agreement, and for the ratable benefit of the Secured Parties from time to time entitled to the benefits of the Collateral Trust Agreement (collectively, the “Secured Parties”).

     All capitalized terms used in this Instrument without definition shall have the respective meanings ascribed to such terms in that certain Mortgage, Assignment of Leases and Rents, Security Agreement and Financing Statement dated ___________, 20___ and recorded on                      ___, 20___ in the officer of the Recorder of Deeds in and for Indiana County, Pennsylvania in Record Book ___, Page ___ (as the same may be amended, amended and restated, supplemented or otherwise modified, renewed or replaced from time to time, the “Existing Mortgage”).

     WHEREAS, as contemplated by the Collateral Trust Agreement, the Mortgagor has designated the [   ] Bonds that are supported by Permitted PEDFA Bond Indebtedness in the principal amount of [$                    ], and any related Obligations, as constituting Secured Obligations to be secured by this Instrument (the “Additional Series of Secured Debt”) and, in connection therewith, the Mortgagor has agreed to execute and deliver this Supplement to the Mortgagee.

     NOW, THEREFORE, in consideration of the premises, each of the Mortgagor and the Mortgagee hereby agrees to, and they do hereby, supplement, modify and amend the Existing Mortgage as follows:

     1. ADDITIONAL SECURED DEBT. The Additional Series of Secured Debt is Secured Debt and, together with all other Series of Secured Debt described in the Existing Mortgage, constitute Secured Obligations under the Existing Mortgage. The due and punctual payment and performance of the Additional Series of Secured Debt, together with all other Series of Secured Debt described in the Existing Mortgage, are secured Equally and Ratably by the Existing Mortgage and all other liens, security interests and assignments held by the Mortgagee pursuant to the Collateral Trust Agreement as security for the Secured Obligations. In order to further evidence the foregoing and confirm that the liens, security interests and assignments granted in the Existing Mortgage secure the Additional Series of Secured Debt, the term Secured Obligations in the Existing Mortgage is hereby amended to expressly state that all of the Additional Series of Secured Debt are included in the Secured Obligations secured by the Existing Mortgage. All liens, security interests and assignments granted to the Mortgagee in the Existing Mortgage are hereby ratified and confirmed as securing the Additional Series of Secured Debt. Accordingly, the holders of the Additional Series of Secured Debt are entitled to the benefits of the Collateral Trust Agreement and are Secured Parties under the Existing Mortgage, together with all other Secured Parties under all other Series of Secured Debt. Pursuant to the Existing Mortgage, the Mortgagor has, and does hereby, grant, bargain, sell, mortgage, warrant, convey, alien, demise, release, assign, transfer, set over, deliver, confirm and convey to the Mortgagee, its successors, assigns and transferees upon the terms and conditions of the Existing Mortgage, and subject to the Permitted Encumbrances, all of the Mortgaged Property to secure the Additional Series of Secured Debt as part of the Secured Obligations.

     2. EFFECT OF SUPPLEMENT. The Mortgagor and the Mortgagee agree that the provisions of this Supplement shall not adversely affect or impair the Existing Mortgage and that the liens, security interests, assignments and rights evidenced thereby shall remain in full force and effect and shall be increased and carried forward to secure all Secured Obligations, the purpose of this instrument being simply to supplement, modify and amend the Existing Mortgage to further evidence that it also secures the Additional Series of Secured Debt. All of the terms and provisions of the Existing Mortgage shall be and remain in full force and effect as therein written and as herein supplemented, modified and amended.

     3. DUPLICATE ORIGINALS. This Supplement may be executed in any number of duplicate originals and each duplicate original shall be deemed to be an original.

     IN WITNESS WHEREOF, intending to be legally bound hereby, the Mortgagor and the Mortgagee have executed this instrument as of the day and year set forth above but effective as of the Effective Date.

(SEAL)	MORTGAGOR: RELIANT ENERGY SEWARD, LLC, a Delaware limited liability company
	By:
		Name:
		Title:

(SEAL)	MORTGAGEE: J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION a national banking association, as Collateral Trustee
	By:
		Name:
		Title:

     Certification of Address. I do hereby certify that the address of the above-named Mortgagee is:

By:
	Name :
	Title :

STATE OF	Section
		Section
COUNTY OF		Section

The foregoing instrument was acknowledged before me this ___ day of                     , 20___ by                                         , as                                          of Reliant Energy Seward, LLC, a Delaware limited liability company. He is personally known to me or has produced                                          as identification.

Print Name:	Notary Public
Serial No.:
Expiration:

My Commission expires:

STATE OF	Section
		Section
COUNTY OF		Section

The foregoing instrument was acknowledged before me this ___ day of                     , 20___ by                     , as                                          of                                         , a                                         . He is personally known to me or who has produced                                          as identification.

Print Name:	Notary Public
Serial No.:
Expiration:

My Commission expires:

EX-10.8.B

Exhibit 10.8B

EXHIBIT C

FORM OF SUPPLEMENT

WHEN RECORDED MAIL TO:

SPACE ABOVE THIS LINE FOR RECORDER’S USE

[FIRST] [SECOND] [ETC.] SUPPLEMENT TO
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FINANCING STATEMENT

THIS INSTRUMENT SUPPLEMENTS THAT CERTAIN AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FINANCING STATEMENT DATED _________ ___, 20___ AND RECORDED ON _________ ___, 20___ IN THE OFFICE OF THE RECORDER OF DEEDS IN AND FOR INDIANA COUNTY, PENNSYLVANIA IN RECORD BOOK ___, PAGE ___.

     THIS [FIRST] [SECOND] [ETC.] SUPPLEMENT TO MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FINANCING STATEMENT (“Supplement”) is made as of this ___ day of ___, 2___ but is to be effective as of the ___ day of ___, 20___ (“Effective Date”), between RELIANT ENERGY SEWARD, LLC, a Delaware limited liability company (the “Mortgagor”), having an address at 1000 Main Street, Houston, Texas 77002, and J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association] (the “Mortgagee”), having an address at One Liberty Place, 1650 Market Street, Suite 4700 Philadelphia, Pennsylvania 19103, Attention: Institutional Trust Services, not in its individual capacity, but solely as Collateral Trustee under the Collateral Trust Agreement, and for the ratable benefit of the Secured Parties from time to time entitled to the benefits of the Collateral Trust Agreement (collectively, the “Secured Parties”).

     All capitalized terms used in this Instrument without definition shall have the respective meanings ascribed to such terms in that certain Mortgage, Assignment of Leases and Rents, Security Agreement and Financing Statement dated _________ ___, 20___ and recorded on _________ ___, 20___ in the officer of the Recorder of Deeds in and for Indiana County, Pennsylvania in Record Book ___, Page ___ (as the same may be amended, amended and restated, supplemented or otherwise modified, renewed or replaced from time to time, the “Existing Mortgage”).

     WHEREAS, as contemplated by the Collateral Trust Agreement, the Mortgagor has designated the [  ] Bonds that are supported by Permitted PEDFA Bond Indebtedness in the principal amount of [$__________________], and any related Obligations, as constituting Secured Obligations to be secured by this Instrument (the “Additional Series of Secured Debt”) and, in connection therewith, the Mortgagor has agreed to execute and deliver this Supplement to the Mortgagee.

     NOW, THEREFORE, in consideration of the premises, each of the Mortgagor and the Mortgagee hereby agrees to, and they do hereby, supplement, modify and amend the Existing Mortgage as follows:

     1. ADDITIONAL SECURED DEBT. The Additional Series of Secured Debt is Secured Debt and, together with all other Series of Secured Debt described in the Existing Mortgage, constitute Secured Obligations under the Existing Mortgage. The due and punctual payment and performance of the Additional Series of Secured Debt, together with all other Series of Secured Debt described in the Existing Mortgage, are secured Equally and Ratably by the Existing Mortgage and all other liens, security interests and assignments held by the Mortgagee pursuant to the Collateral Trust Agreement as security for the Secured Obligations. In order to further evidence the foregoing and confirm that the liens, security interests and assignments granted in the Existing Mortgage secure the Additional Series of Secured Debt, the term Secured Obligations in the Existing Mortgage is hereby amended to expressly state that all of the Additional Series of Secured Debt are included in the Secured Obligations secured by the Existing Mortgage. All liens, security interests and assignments granted to the Mortgagee in the Existing Mortgage are hereby ratified and confirmed as securing the Additional Series of Secured Debt. Accordingly, the holders of the Additional Series of Secured Debt are entitled to the benefits of the Collateral Trust Agreement and are Secured Parties under the Existing Mortgage, together with all other Secured Parties under all other Series of Secured Debt. Pursuant to the Existing Mortgage, the Mortgagor has, and does hereby, grant, bargain, sell, mortgage, warrant, convey, alien, demise, release, assign, transfer, set over, deliver, confirm and convey to the Mortgagee, its successors, assigns and transferees upon the terms and conditions of the Existing Mortgage, and subject to the Permitted Encumbrances, all of the Mortgaged Property to secure the Additional Series of Secured Debt as part of the Secured Obligations.

     2. EFFECT OF SUPPLEMENT. The Mortgagor and the Mortgagee agree that the provisions of this Supplement shall not adversely affect or impair the Existing Mortgage and that the liens, security interests, assignments and rights evidenced thereby shall remain in full force and effect and shall be increased and carried forward to secure all Secured Obligations, the purpose of this instrument being simply to supplement, modify and amend the Existing Mortgage to further evidence that it also secures the Additional Series of Secured Debt. All of the terms and provisions of the Existing Mortgage shall be and remain in full force and effect as therein written and as herein supplemented, modified and amended.

     3. DUPLICATE ORIGINALS. This Supplement may be executed in any number of duplicate originals and each duplicate original shall be deemed to be an original.

     IN WITNESS WHEREOF, intending to be legally bound hereby, the Mortgagor and the Mortgagee have executed this instrument as of the day and year set forth above but effective as of the Effective Date.

(SEAL)	MORTGAGOR: RELIANT ENERGY SEWARD, LLC, a Delaware limited liability company
	By:
		Name:
		Title:

(SEAL)	MORTGAGEE: J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION a national banking association, as Collateral Trustee
	By:
		Name:
		Title:

     Certification of Address. I do hereby certify that the address of the above-named Mortgagee is:

By:
	Name :
	Title :

STATE OF	Section
		Section
COUNTY OF		Section

The foregoing instrument was acknowledged before me this ___ day of __________________, 20 ___ by __________________, as __________________ of Reliant Energy Seward, LLC, a Delaware limited liability company. He is personally known to me or has produced __________________ as identification.

Print Name:	Notary Public
Serial No.:
Expiration:

My Commission expires:

STATE OF	Section
		Section
COUNTY OF		Section

The foregoing instrument was acknowledged before me this ___ day of __________________, 20 ___ by __________________, as __________________ of __________________, a __________________. He is personally known to me or who has produced __________________ as identification.

Print Name:	Notary Public
Serial No.:
Expiration:

My Commission expires:

EX-10.29

Exhibit 10.29

EXECUTION COPY

FIFTH SUPPLEMENTAL GUARANTEE AGREEMENT

     FIFTH SUPPLEMENTAL GUARANTEE AGREEMENT (this “Supplemental Guarantee Agreement”), dated as of December 1, 2009, among RRI Energy Channelview LP(the “Guaranteeing Subsidiary”), a Delaware limited partnership and a subsidiary of RRI Energy, Inc. (formerly known as Reliant Energy, Inc.) (or its permitted successor), a Delaware corporation (the “Company”), the Company, the other Subsidiary Guarantors (as defined in the Guarantee Agreement referred to herein) and The Bank of New York Mellon Trust Company, N.A., as trustee under the Indenture (as defined in the Guarantee Agreement referred to below) (the “Trustee”).

WITNESSETH

     WHEREAS, the Company and the Subsidiary Guarantors have heretofore executed and delivered to the Trustee a Guarantee Agreement, dated as of December 22, 2004, as supplemented by a Supplemental Guarantee Agreement dated as of September 21, 2006, a Second Supplemental Guarantee Agreement dated as of December 1, 2006, a Third Supplemental Guarantee Agreement dated as of June 1, 2009 and a Fourth Supplemental Guarantee Agreement dated as of August 20, 2009 (as so supplemented, the “Guarantee Agreement”), providing for the Company’s guarantee (the “RRI Guarantee”) of the Pennsylvania Economic Development Financing Authority’s (“PEDFA”) Exempt Facilities Revenue Bonds (RRI Energy Seward, LLC Project), Series 2001A (the “Series 2001A Bonds”), and the Subsidiary Guarantors’ guarantees of the RRI Guarantee;

     WHEREAS, the Guarantee Agreement provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental guarantee agreement pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the RRI Guarantee and the Guarantee Agreement (the “Subsidiary Guarantee”); and

     WHEREAS, pursuant to Section 9.01 of the Guarantee Agreement, the Trustee, the Company and the other Subsidiary Guarantors are authorized to execute and deliver this Supplemental Guarantee Agreement.

     NOW THEREFORE, in consideration of the foregoing and for good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary, the Trustee, the Company and the other Subsidiary Guarantors mutually covenant and agree for the equal and ratable benefit of the Holders of the Series 2001A Bonds as follows:

     1. Capitalized Terms. Unless otherwise defined in this Supplemental Guarantee Agreement, capitalized terms used herein without definition shall have the meanings assigned to them in the Guarantee Agreement.

     2. Agreement to be Bound; Guarantee. The Guaranteeing Subsidiary hereby becomes a party to the Guarantee Agreement as a Subsidiary Guarantor and as such will have all of the rights and be subject to all of the Obligations and agreements of a Subsidiary Guarantor under the Guarantee Agreement. The Guaranteeing Subsidiary hereby agrees to be bound by all of the provisions of the Guarantee Agreement applicable to a Subsidiary Guarantor and to

1

perform all of the Obligations and agreements of a Subsidiary Guarantor under the Guarantee Agreement. In furtherance of the foregoing, the Guaranteeing Subsidiary shall be deemed a Subsidiary Guarantor for purposes of Article 12 of the Guarantee Agreement, including, without limitation, Section 12.02 thereof.

     3. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL GUARANTEE AGREEMENT BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

     4. Counterparts. The parties may sign any number of copies of this Supplemental Guarantee Agreement. Each signed copy shall be an original, but all of them together represent the same agreement.

     5. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

     6. The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Guarantee Agreement or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.

     7. Ratification of Guarantee Agreement; Supplemental Guarantee Agreement Part of Guarantee Agreement. Except as expressly amended hereby, the Guarantee Agreement is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Guarantee Agreement shall form a part of the Guarantee Agreement for all purposes, and every Holder of Series 2001A Bonds heretofore or hereafter authenticated and delivered shall by bound hereby.

Remainder of page intentionally left blank

2

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Guarantee Agreement to be duly executed, all as of the date first above written.

RRI ENERGY CHANNELVIEW LP
By:	RRI Energy Channelview (Texas), LLC, its General Partner
By:	/s/ Andrew C. Johannesen
	Name:	Andrew C. Johannesen
	Title:	Vice President and Treasurer
RRI ENERGY, INC.
By:	/s/ Andrew C. Johannesen
	Name:	Andrew C. Johannesen
	Title:	Vice President and Treasurer

3

RRI ENERGY ASSET MANAGEMENT, LLC
By:	/s/ Matthew E. Greek
	Name:	Matthew E. Greek
	Title:	Vice President
RRI ENERGY BROADBAND, INC. RRI ENERGY CALIFORNIA HOLDINGS, LLC RRI ENERGY COMMUNICATIONS, INC. RRI ENERGY COOLWATER, INC. RRI ENERGY CORPORATE SERVICES, LLC RRI ENERGY ELECTRIC SOLUTIONS, LLC RRI ENERGY ELLWOOD, INC. RRI ENERGY ETIWANDA, INC. RRI ENERGY FLORIDA, LLC RRI ENERGY KEY/CON FUELS, LLC RRI ENERGY MANDALAY, INC. RRI ENERGY NORTHEAST GENERATION, INC. RRI ENERGY NORTHEAST HOLDINGS, INC. RRI ENERGY ORMOND BEACH, INC. RRI ENERGY POWER GENERATION, INC. RRI ENERGY SABINE (DELAWARE), INC. RRI ENERGY SABINE (TEXAS), INC. RRI ENERGY SERVICES, INC. RRI ENERGY SERVICES DESERT BASIN, LLC RRI ENERGY SOLUTIONS EAST, LLC RRI ENERGY TRADING EXCHANGE, INC. RRI ENERGY VENTURES, INC. RRI ENERGY WHOLESALE GENERATION, LLC
By:	/s/ Andrew C. Johannesen
	Name:	Andrew C. Johannesen
	Title:	Vice President and Treasurer of the corporations and limited liability companies listed above

4

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:	/s/ Michael Judge
	Authorized Signatory

5

EX-10.30

Exhibit 10.30

EXECUTION COPY

FIFTH SUPPLEMENTAL GUARANTEE AGREEMENT

     FIFTHSUPPLEMENTAL GUARANTEE AGREEMENT (this “Supplemental Guarantee Agreement”), dated as of December 1, 2009, among RRI Energy Channelview LP (the “Guaranteeing Subsidiary”), a Delaware limited partnership and a subsidiary of RRI Energy, Inc. (formerly Reliant Energy, Inc.) (or its permitted successor), a Delaware corporation (the “Company”), the Company, the other Subsidiary Guarantors (as defined in the Guarantee Agreement referred to herein) and The Bank of New York Mellon Trust Company, N.A., as trustee under the Indenture (as defined in the Guarantee Agreement referred to below) (the “Trustee”).

WITNESSETH

     WHEREAS, the Company and the Subsidiary Guarantors have heretofore executed and delivered to the Trustee a Guarantee Agreement, dated as of December 22, 2004, as supplemented by a Supplemental Guarantee Agreement dated as of September 21, 2006, a Second Supplemental Guarantee Agreement dated as of December 1, 2006, a Third Supplemental Guarantee Agreement dated as of June 1, 2009 and a Fourth Supplemental Guarantee Agreement dated as of August 20, 2009 (as so supplemented, the “Guarantee Agreement”), providing for the Company’s guarantee (the “RRI Guarantee”) of the Pennsylvania Economic Development Financing Authority’s (“PEDFA”) Exempt Facilities Revenue Bonds (RRIEnergy Seward, LLC Project), Series 2002A (the “Series 2002A Bonds”), and the Subsidiary Guarantors’ guarantees of the RRI Guarantee;

     WHEREAS, the Guarantee Agreement provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental guarantee agreement pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the RRI Guarantee and the Guarantee Agreement (the “Subsidiary Guarantee”); and

     WHEREAS, pursuant to Section 9.01 of the Guarantee Agreement, the Trustee, the Company and the other Subsidiary Guarantors are authorized to execute and deliver this Supplemental Guarantee Agreement.

     NOW THEREFORE, in consideration of the foregoing and for good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary, the Trustee, the Company and the other Subsidiary Guarantors mutually covenant and agree for the equal and ratable benefit of the Holders of the Series 2002A Bonds as follows:

     1. Capitalized Terms. Unless otherwise defined in this Supplemental Guarantee Agreement, capitalized terms used herein without definition shall have the meanings assigned to them in the Guarantee Agreement.

     2. Agreement to be Bound; Guarantee. The Guaranteeing Subsidiary hereby becomes a party to the Guarantee Agreement as a Subsidiary Guarantor and as such will have all of the rights and be subject to all of the Obligations and agreements of a Subsidiary Guarantor under the Guarantee Agreement. The Guaranteeing Subsidiary hereby agrees to be bound by all of the provisions of the Guarantee Agreement applicable to a Subsidiary Guarantor and to

1

perform all of the Obligations and agreements of a Subsidiary Guarantor under the Guarantee Agreement. In furtherance of the foregoing, the Guaranteeing Subsidiary shall be deemed a Subsidiary Guarantor for purposes of Article 12 of the Guarantee Agreement, including, without limitation, Section 12.02 thereof.

     3. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL GUARANTEE AGREEMENT BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

     4. Counterparts. The parties may sign any number of copies of this Supplemental Guarantee Agreement. Each signed copy shall be an original, but all of them together represent the same agreement.

     5. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

     6. The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Guarantee Agreement or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.

     7. Ratification of Guarantee Agreement; Supplemental Guarantee Agreement Part of Guarantee Agreement. Except as expressly amended hereby, the Guarantee Agreement is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Guarantee Agreement shall form a part of the Guarantee Agreement for all purposes, and every Holder of Series 2002A Bonds heretofore or hereafter authenticated and delivered shall by bound hereby.

Remainder of page intentionally left blank

2

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Guarantee Agreement to be duly executed, all as of the date first above written.

RRI ENERGY CHANNELVIEW LP By: RRI ENERGY CHANNELVIEW (TEXAS), LLC, its General Partner
By:	/s/ Andrew C. Johannesen
	Name:	Andrew C. Johannesen
	Title:	Vice President and Treasurer
RRI ENERGY, INC.
By:	/s/ Andrew C. Johannesen
	Name:	Andrew C. Johannesen
	Title:	Vice President and Treasurer

3

RRI ENERGY ASSET MANAGEMENT, LLC
By:	Matthew E. Greek
	Name:	Matthew E. Greek
	Title:	Vice President
RRI ENERGY BROADBAND, INC. RRI ENERGY CALIFORNIA HOLDINGS, LLC RRI ENERGY COMMUNICATIONS, INC. RRI ENERGY COOLWATER, INC. RRI ENERGY CORPORATE SERVICES, LLC RRI ENERGY ELECTRIC SOLUTIONS, LLC RRI ENERGY ELLWOOD, INC. RRI ENERGY ETIWANDA, INC. RRI ENERGY FLORIDA, LLC RRI ENERGY KEY/CON FUELS, LLC RRI ENERGY MANDALAY, INC. RRI ENERGY NORTHEAST GENERATION, INC. RRI ENERGY NORTHEAST HOLDINGS, INC. RRI ENERGY ORMOND BEACH, INC. RRI ENERGY POWER GENERATION, INC. RRI ENERGY SABINE (DELAWARE), INC. RRI ENERGY SABINE (TEXAS), INC. RRI ENERGY SERVICES, INC. RRI ENERGY SERVICES DESERT BASIN, LLC RRI ENERGY SOLUTIONS EAST, LLC RRI ENERGY TRADING EXCHANGE, INC. RRI ENERGY VENTURES, INC. RRI ENERGY WHOLESALE GENERATION, LLC
By:	/s/ Andrew C. Johannesen
	Name:	Andrew C. Johannesen
	Title:	Vice President and Treasurer of the corporations and limited liability companies listed above

4

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:	/s/ Michael Judge
	Authorized Signatory

5

EX-10.31

Exhibit 10.31

EXECUTION COPY

FIFTH SUPPLEMENTAL GUARANTEE AGREEMENT

     FIFTH SUPPLEMENTAL GUARANTEE AGREEMENT (this “Supplemental Guarantee Agreement”), dated as of December 1, 2009, among RRI Energy Channelview LP (the “Guaranteeing Subsidiary”), a Delaware limited partnership and a subsidiary of RRI Energy, Inc. (formerly known as Reliant Energy, Inc.) (or its permitted successor), a Delaware corporation (the “Company”), the Company, the other Subsidiary Guarantors (as defined in the Guarantee Agreement referred to herein) and The Bank of New York Mellon Trust Company, N.A., as trustee under the Indenture (as defined in the Guarantee Agreement referred to below) (the “Trustee”).

WITNESSETH

     WHEREAS, the Company and the Subsidiary Guarantors have heretofore executed and delivered to the Trustee a Guarantee Agreement, dated as of December 22, 2004, as supplemented by a Supplemental Guarantee Agreement related thereto dated as of September 21, 2006, a Second Supplemental Guarantee Agreement related thereto dated as of December 1, 2006, a Third Supplemental Guarantee Agreement dated as of June 1, 2009 and a Fourth Supplemental Guarantee Agreement dated as of August 20, 2009 (as supplemented to date, the “Guarantee Agreement”), providing for the Company’s guarantee (the “RRI Guarantee”) of the Pennsylvania Economic Development Financing Authority’s (“PEDFA”) Exempt Facilities Revenue Bonds (RRI Energy Seward, LLC Project), Series 2002B (the “Series 2002B Bonds”), and the Subsidiary Guarantors’ guarantees of the RRI Guarantee;

     WHEREAS, the Guarantee Agreement provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental guarantee agreement pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the RRI Guarantee and the Guarantee Agreement (the “Subsidiary Guarantee”); and

     WHEREAS, pursuant to Section 9.01 of the Guarantee Agreement, the Trustee, the Company and the other Subsidiary Guarantors are authorized to execute and deliver this Supplemental Guarantee Agreement.

     NOW THEREFORE, in consideration of the foregoing and for good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary, the Trustee, the Company and the other Subsidiary Guarantors mutually covenant and agree for the equal and ratable benefit of the Holders of the Series 2002B Bonds as follows:

     1. Capitalized Terms. Unless otherwise defined in this Supplemental Guarantee Agreement, capitalized terms used herein without definition shall have the meanings assigned to them in the Guarantee Agreement.

     2. Agreement to be Bound; Guarantee. The Guaranteeing Subsidiary hereby becomes a party to the Guarantee Agreement as a Subsidiary Guarantor and as such will have all of the rights and be subject to all of the Obligations and agreements of a Subsidiary Guarantor under the Guarantee Agreement. The Guaranteeing Subsidiary hereby agrees to be bound by all of the provisions of the Guarantee Agreement applicable to a Subsidiary Guarantor and to

1

perform all of the Obligations and agreements of a Subsidiary Guarantor under the Guarantee Agreement. In furtherance of the foregoing, the Guaranteeing Subsidiary shall be deemed a Subsidiary Guarantor for purposes of Article 12 of the Guarantee Agreement, including, without limitation, Section 12.02 thereof.

     3. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL GUARANTEE AGREEMENT BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

     4. Counterparts. The parties may sign any number of copies of this Supplemental Guarantee Agreement. Each signed copy shall be an original, but all of them together represent the same agreement.

     5. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

     6. The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Guarantee Agreement or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.

     7. Ratification of Guarantee Agreement; Supplemental Guarantee Agreement Part of Guarantee Agreement. Except as expressly amended hereby, the Guarantee Agreement is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Guarantee Agreement shall form a part of the Guarantee Agreement for all purposes, and every Holder of Series 2002B Bonds heretofore or hereafter authenticated and delivered shall by bound hereby.

Remainder of page intentionally left blank

2

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Guarantee Agreement to be duly executed, all as of the date first above written.

RRI ENERGY CHANNELVIEW LP
By:	RRI Energy Channelview (Texas), LLC, its General Partner
By:	/s/ Andrew C. Johannesen
	Name:	Andrew C. Johannesen
	Title:	Vice President and Treasurer
RRI ENERGY, INC.
By:	/s/ Andrew C. Johannesen
	Name:	Andrew C. Johannesen
	Title:	Vice President and Treasurer

3

RRI ENERGY ASSET MANAGEMENT, LLC
By:	Matthew E. Greek
	Name:	Matthew E. Greek
	Title:	Vice President

RRI ENERGY BROADBAND, INC. RRI ENERGY CALIFORNIA HOLDINGS, LLC RRI ENERGY COMMUNICATIONS, INC. RRI ENERGY COOLWATER, INC. RRI ENERGY CORPORATE SERVICES, LLC RRI ENERGY ELECTRIC SOLUTIONS, LLC RRI ENERGY ELLWOOD, INC. RRI ENERGY ETIWANDA, INC. RRI ENERGY FLORIDA, LLC RRI ENERGY KEY/CON FUELS, LLC RRI ENERGY MANDALAY, INC. RRI ENERGY NORTHEAST GENERATION, INC. RRI ENERGY NORTHEAST HOLDINGS, INC. RRI ENERGY ORMOND BEACH, INC. RRI ENERGY POWER GENERATION, INC. RRI ENERGY SABINE (DELAWARE), INC. RRI ENERGY SABINE (TEXAS), INC. RRI ENERGY SERVICES, INC. RRI ENERGY SERVICES DESERT BASIN, LLC RRI ENERGY SOLUTIONS EAST, LLC RRI ENERGY TRADING EXCHANGE, INC. RRI ENERGY VENTURES, INC. RRI ENERGY WHOLESALE GENERATION, LLC
By:	/s/ Andrew C. Johannesen
	Name:	Andrew C. Johannesen
	Title:	Vice President and Treasurer of the corporations and limited liability companies listed above

4

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:	/s/ Michael Judge
	Authorized Signatory

5

EX-10.32

Exhibit 10.32

EXECUTION COPY

FIFTH SUPPLEMENTAL GUARANTEE AGREEMENT

     FIFTH SUPPLEMENTAL GUARANTEE AGREEMENT (this “Supplemental Guarantee Agreement”), dated as of December 1, 2009, among RRI Energy Channelview LP (the “Guaranteeing Subsidiary”), a Delaware limited partnership and a subsidiary of RRI Energy, Inc. (formerly Reliant Energy, Inc.) (or its permitted successor), a Delaware corporation (the “Company”), the Company, the other Subsidiary Guarantors (as defined in the Guarantee Agreement referred to herein) and The Bank of New York Mellon Trust Company, N.A., as trustee under the Indenture (as defined in the Guarantee Agreement referred to below) (the “Trustee”).

WITNESSETH

     WHEREAS, the Company and the Subsidiary Guarantors have heretofore executed and delivered to the Trustee a Guarantee Agreement, dated as of December 22, 2004, as supplemented by a Supplemental Guarantee Agreement dated as of September 21, 2006, a Second Supplemental Guarantee Agreement dated as of December 1, 2006, a Third Supplemental Guarantee Agreement dated as of June 1, 2009 and a Fourth Supplemental Guarantee Agreement dated as of August 20, 2009 (as supplemented to date, the “Guarantee Agreement”), providing for the Company’s guarantee (the “RRI Guarantee”) of the Pennsylvania Economic Development Financing Authority’s (“PEDFA”) Exempt Facilities Revenue Bonds (RRI Energy Seward, LLC Project), Series 2003A (the “Series 2003A Bonds”), and the Subsidiary Guarantors’ guarantees of the RRI Guarantee;

     WHEREAS, the Guarantee Agreement provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental guarantee agreement pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the RRI Guarantee and the Guarantee Agreement (the “Subsidiary Guarantee”); and

     WHEREAS, pursuant to Section 9.01 of the Guarantee Agreement, the Trustee, the Company and the other Subsidiary Guarantors are authorized to execute and deliver this Supplemental Guarantee Agreement.

     NOW THEREFORE, in consideration of the foregoing and for good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary, the Trustee, the Company and the other Subsidiary Guarantors mutually covenant and agree for the equal and ratable benefit of the Holders of the Series 2003A Bonds as follows:

     1. Capitalized Terms. Unless otherwise defined in this Supplemental Guarantee Agreement, capitalized terms used herein without definition shall have the meanings assigned to them in the Guarantee Agreement.

     2. Agreement to be Bound; Guarantee. The Guaranteeing Subsidiary hereby becomes a party to the Guarantee Agreement as a Subsidiary Guarantor and as such will have all of the rights and be subject to all of the Obligations and agreements of a Subsidiary Guarantor under the Guarantee Agreement. The Guaranteeing Subsidiary hereby agrees to be bound by all of the provisions of the Guarantee Agreement applicable to a Subsidiary Guarantor and to

1

perform all of the Obligations and agreements of a Subsidiary Guarantor under the Guarantee Agreement. In furtherance of the foregoing, the Guaranteeing Subsidiary shall be deemed a Subsidiary Guarantor for purposes of Article 12 of the Guarantee Agreement, including, without limitation, Section 12.02 thereof.

     3. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL GUARANTEE AGREEMENT BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

     4. Counterparts. The parties may sign any number of copies of this Supplemental Guarantee Agreement. Each signed copy shall be an original, but all of them together represent the same agreement.

     5. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

     6. The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Guarantee Agreement or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.

     7. Ratification of Guarantee Agreement; Supplemental Guarantee Agreement Part of Guarantee Agreement. Except as expressly amended hereby, the Guarantee Agreement is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Guarantee Agreement shall form a part of the Guarantee Agreement for all purposes, and every Holder of Series 2003A Bonds heretofore or hereafter authenticated and delivered shall by bound hereby.

Remainder of page intentionally left blank

2

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Guarantee Agreement to be duly executed, all as of the date first above written.

RRI ENERGY CHANNELVIEW LP
By:	RRI Energy Channelview (Texas), LLC, its General Partner
By:	/s/ Andrew C. Johannesen
	Name:	Andrew C. Johannesen
	Title:	Vice President and Treasurer
RRI ENERGY, INC.
By:	/s/ Andrew C. Johannesen
	Name:	Andrew C. Johannesen
	Title:	Vice President and Treasurer

3

RRI ENERGY ASSET MANAGEMENT, LLC
By:	/s/ Matthew E. Greek
	Name:	Matthew E. Greek
	Title:	Vice President

RRI ENERGY BROADBAND, INC.
RRI ENERGY CALIFORNIA HOLDINGS, LLC
RRI ENERGY COMMUNICATIONS, INC.
RRI ENERGY COOLWATER, INC.
RRI ENERGY CORPORATE SERVICES, LLC
RRI ENERGY ELECTRIC SOLUTIONS, LLC
RRI ENERGY ELLWOOD, INC.
RRI ENERGY ETIWANDA, INC.
RRI ENERGY FLORIDA, LLC
RRI ENERGY KEY/CON FUELS, LLC
RRI ENERGY MANDALAY, INC.
RRI ENERGY NORTHEAST GENERATION, INC.
RRI ENERGY NORTHEAST HOLDINGS, INC.
RRI ENERGY ORMOND BEACH, INC.
RRI ENERGY POWER GENERATION, INC.
RRI ENERGY SABINE (DELAWARE), INC.
RRI ENERGY SABINE (TEXAS), INC.
RRI ENERGY SERVICES, INC.
RRI ENERGY SERVICES DESERT BASIN, LLC
RRI ENERGY SOLUTIONS EAST, LLC
RRI ENERGY TRADING EXCHANGE, INC.
RRI ENERGY VENTURES, INC.
RRI ENERGY WHOLESALE GENERATION, LLC

By:	/s/ Andrew C. Johannesen
	Name:	Andrew C. Johannesen
	Title:	Vice President and Treasurer of the corporations and limited liability companies listed above

4

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:	/s/ Michael Judge
	Authorized Signatory

5

EX-10.33

Exhibit 10.33

EXECUTION COPY

SIXTH SUPPLEMENTAL GUARANTEE AGREEMENT

     SIXTH SUPPLEMENTAL GUARANTEE AGREEMENT (this “Supplemental Guarantee Agreement”), dated as of December 1, 2009, among RRI Energy Channelview LP (the “Guaranteeing Subsidiary”), a Delaware limited partnership and a subsidiary of RRI Energy, Inc. (formerly known as Reliant Energy, Inc.) (or its permitted successor), a Delaware corporation (the “Company”), the Company, the other Subsidiary Guarantors (as defined in the Guarantee Agreement referred to herein) and The Bank of New York Mellon Trust Company, N.A., as trustee under the Indenture (as defined in the Guarantee Agreement referred to below) (the “Trustee”).

WITNESSETH

     WHEREAS, the Company and the Subsidiary Guarantors have heretofore executed and delivered to the Trustee a Guarantee Agreement, dated as of December 22, 2004, as supplemented by a Supplemental Guarantee Agreement dated as of September 21, 2006, a Third Supplemental Guarantee Agreement dated as of December 1, 2006, a Fourth Supplemental Guarantee Agreement dated as of June 1, 2009 and a Fifth Supplemental Guarantee Agreement dated as of August 20, 2009 (as supplemented to date, the “Guarantee Agreement”), providing for the Company’s guarantee (the “REI Guarantee”) of the Pennsylvania Economic Development Financing Authority’s (“PEDFA”) Exempt Facilities Revenue Bonds (RRI Energy Seward, LLC Project), Series 2004A (the “Series 2004A Bonds”), and the Subsidiary Guarantors’ guarantees of the REI Guarantee;

     WHEREAS, the Guarantee Agreement provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental guarantee agreement pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the REI Guarantee and the Guarantee Agreement (the “Subsidiary Guarantee”); and

     WHEREAS, pursuant to Section 9.01 of the Guarantee Agreement, the Trustee, the Company and the other Subsidiary Guarantors are authorized to execute and deliver this Supplemental Guarantee Agreement.

     NOW THEREFORE, in consideration of the foregoing and for good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary, the Trustee, the Company and the other Subsidiary Guarantors mutually covenant and agree for the equal and ratable benefit of the Holders of the Series 2004A Bonds as follows:

     1. Capitalized Terms. Unless otherwise defined in this Supplemental Guarantee Agreement, capitalized terms used herein without definition shall have the meanings assigned to them in the Guarantee Agreement.

     2. Agreement to be Bound; Guarantee. The Guaranteeing Subsidiary hereby becomes a party to the Guarantee Agreement as a Subsidiary Guarantor and as such will have all of the rights and be subject to all of the Obligations and agreements of a Subsidiary Guarantor under the Guarantee Agreement. The Guaranteeing Subsidiary hereby agrees to be bound by all of the provisions of the Guarantee Agreement applicable to a Subsidiary Guarantor and to

1

perform all of the Obligations and agreements of a Subsidiary Guarantor under the Guarantee Agreement. In furtherance of the foregoing, the Guaranteeing Subsidiary shall be deemed a Subsidiary Guarantor for purposes of Article 12 of the Guarantee Agreement, including, without limitation, Section 12.02 thereof.

     3. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL GUARANTEE AGREEMENT BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

     4. Counterparts. The parties may sign any number of copies of this Supplemental Guarantee Agreement. Each signed copy shall be an original, but all of them together represent the same agreement.

     5. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

     6. The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Guarantee Agreement or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.

     7. Ratification of Guarantee Agreement; Supplemental Guarantee Agreement Part of Guarantee Agreement. Except as expressly amended hereby, the Guarantee Agreement is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Guarantee Agreement shall form a part of the Guarantee Agreement for all purposes, and every Holder of Series 2004A Bonds heretofore or hereafter authenticated and delivered shall by bound hereby.

Remainder of page intentionally left blank

2

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Guarantee Agreement to be duly executed, all as of the date first above written.

RRI ENERGY CHANNELVIEW LP
By:	RRI Energy Channelview (Texas), LLC, its General Partner
By:	/s/ Andrew C. Johannesen
	Name:	Andrew C. Johannesen
	Title:	Vice President and Treasurer
RRI ENERGY, INC.
By:	/s/ Andrew C. Johannesen
	Name:	Andrew C. Johannesen
	Title:	Vice President and Treasurer

3

RRI ENERGY ASSET MANAGEMENT, LLC
By:	/s/ Matthew E. Greek
	Name:	Matthew E. Greek
	Title:	Vice President

RRI ENERGY BROADBAND, INC.
RRI ENERGY CALIFORNIA HOLDINGS, LLC
RRI ENERGY COMMUNICATIONS, INC.
RRI ENERGY COOLWATER, INC.
RRI ENERGY CORPORATE SERVICES, LLC
RRI ENERGY ELECTRIC SOLUTIONS, LLC
RRI ENERGY ELLWOOD, INC.
RRI ENERGY ETIWANDA, INC.
RRI ENERGY FLORIDA, LLC
RRI ENERGY KEY/CON FUELS, LLC
RRI ENERGY MANDALAY, INC.
RRI ENERGY NORTHEAST GENERATION, INC.
RRI ENERGY NORTHEAST HOLDINGS, INC.
RRI ENERGY ORMOND BEACH, INC.
RRI ENERGY POWER GENERATION, INC.
RRI ENERGY SABINE (DELAWARE), INC.
RRI ENERGY SABINE (TEXAS), INC.
RRI ENERGY SERVICES, INC.
RRI ENERGY SERVICES DESERT BASIN, LLC
RRI ENERGY SOLUTIONS EAST, LLC
RRI ENERGY TRADING EXCHANGE, INC.
RRI ENERGY VENTURES, INC.
RRI ENERGY WHOLESALE GENERATION, LLC

By:	/s/ Andrew C. Johannesen
	Name:	Andrew C. Johannesen
	Title:	Vice President and Treasurer of the corporations and limited liability companies listed above

4

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:	/s/ Michael Judge
	Authorized Signatory

5

EX-10.34.B

Exhibit 10.34B

EXHIBITS AND SCHEDULES TO THE
CREDIT AND GUARANTY AGREEMENT
DATED AS OF JUNE 12, 2007

(Portions of this Exhibit have been omitted
pursuant to a request for confidential treatment)

SCHEDULES

	1.1(a)	Existing Letters of Credit
	1.1(b)	Guarantors
	1.1(d)	Subordination Terms
	1.1(e)	Mortgages and Title Policies
	1.1(f)	Secured Hedge Agreements
	1.1(g)	Existing Indebtedness
	2.1	Commitments and Pro Rata Shares
	5.8(c)	Closing Date Mortgaged Properties
	5.9(c)	Environmental Matters
	5.13	Subsidiaries and Other Equity Investments
	5.17	Intellectual Property Matters
	7.3(k)	List of Agreements Prohibiting Subordination of Intercompany Indebtedness
	10.10(e)	Certain Closing Actions
	11.2	Administrative Agent’s Office; Certain Addresses for Notices
EXHIBITS
		Form of
	A	Borrowing Notice
	B	L/C Certificate
	C	Continuation/Conversion Notice
	D	Revolving Credit Note
	E	Compliance Certificate
	F	Assignment and Assumption
	G	Assumption and Joinder
	H	Incremental Term Loan Commitment Agreement
	I	Incremental RL Commitment Agreement

SCHEDULE 1.1(a)
EXISTING LETTERS OF CREDIT

Date of Issue	Letter of Credit #	Issuing Bank	Bank Cr. Rating	Amount	Beneficiary	Expiry Date	On Behalf Of
[***] REVOLVING LETTERS OF CREDIT
12/5/2006	[***]	[***]		[***]	[***]	12/31/2007	RES
12/5/2006	[***]	[***]		[***]	[***]	12/4/2007	RES
2/20/2007	[***]	[***]		[***]	[***]	12/31/2007	RES
2/23/2007	[***]	[***]		[***]	[***]	12/31/2007	REWG
2/23/2007	[***]	[***]		[***]	[***]	3/31/2008	OPMW
2/26/2007	[***]	[***]		[***]	[***]	12/31/2007	OPMW
3/1/2007	[***]	[***]		[***]	[***]	2/28/2008	REWG
3/12/2007	[***]	[***]		[***]	[***]	12/31/2007	RES
3/19/2007	[***]	[***]		[***]	[***]	12/30/2007	RES
3/21/2007	[***]	[***]		[***]	[***]	2/28/2008	RESE
3/23/2007	[***]	[***]		[***]	[***]	2/28/2008	RESE
5/11/2007	[***]	[***]		[***]	[***]	5/10/2008	RES
5/31/2007	[***]	[***]		[***]	[***]	7/15/2007	RES
6/1/2007	[***]	[***]		[***]	[***]	9/30/2007	RES
6/4/2007	[***]	[***]		[***]	[***]	12/31/2007	RES
6/5/2007	[***]	[***]		[***]	[***]	6/22/2007	RES
5/9/2003	[***]	[***]		[***]	[***]	9/30/2007	RES
11/1/2006	[***]	[***]		[***]	[***]	11/1/2007	RRI
11/17/2006	[***]	[***]		[***]	[***]	11/17/2007	RRI
	16	[***] sub total		$[***]
[***] REVOLVING LETTERS OF CREDIT
9/14/2005	[***]	[***]		[***]	[***]	1/16/2008	REES
11/8/2006	[***]	[***]		[***]	[***]	12/31/2007	RES
2/14/2007	[***]	[***]		[***]	[***]	1/2/2008	RE Solutions East
3/5/2007	[***]	[***]		[***]	[***]	2/28/2008	RE Solutions East
3/5/2007	[***]	[***]		[***]	[***]	3/1/2008	RE Solutions East
3/9/2007	[***]	[***]		[***]	[***]	3/6/2008	RRI
3/20/2007	[***]	[***]		[***]	[***]	6/30/2007	RES
5/30/2007	[***]	[***]		[***]	[***]	4/30/2008	RE Solutions East
5/31/2007	[***]	[***]		[***]	[***]	12/31/2007	RES
5/31/2007	[***]	[***]		[***]	[***]	6/30/2008	RES
6/8/2007	[***]	[***]		[***]	[***]	1/15/2008	RES
	11	[***] sub total		$[***]

*** The confidential content of this Schedule 1.1(a) has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Date of Issue	Letter of Credit #	Issuing Bank	Bank Cr. Rating	Amount	Beneficiary	Expiry Date	On Behalf Of
[***] REVOLVING LETTERS OF CREDIT
2/18/2005	[***]	[***]		[***]	[***]	9/28/2007	RES
5/30/2006	[***]	[***]		[***]	[***]	2/28/2008	REF
9/8/2006	[***]	[***]		[***]	[***]	8/31/2007	RE Solutions East
9/8/2006	[***]	[***]		[***]	[***]	8/31/2007	RE Solutions East
9/8/2006	[***]	[***]		[***]	[***]	8/31/2007	RE Solutions East
9/8/2006	[***]	[***]		[***]	[***]	8/31/2007	RE Solutions East
9/8/2006	[***]	[***]		[***]	[***]	8/31/2007	RE Solutions East
9/8/2006	[***]	[***]		[***]	[***]	8/31/2007	RE Solutions East
10/19/2006	[***]	[***]		[***]	[***]	10/15/2007	RES
3/13/2007	[***]	[***]		[***]	[***]	3/1/2008	RES
	10	[***] sub total		$[***]
	Total Revolving Letters of Credit			$[***]
PRE-FUNDED LETTERS OF CREDIT
4/11/2003	[***]	[***]		[***]	[***]	6/30/2007	RES
5/15/2003	[***]	[***]		[***]	[***]	6/15/2007	RES
8/13/2003	[***]	[***]		[***]	[***]	8/31/2007	RES
1/13/2004	[***]	[***]		[***]	[***]	1/12/2008	REMA
1/13/2004	[***]	[***]		[***]	[***]	1/12/2008	REMA
3/10/2004	[***]	[***]		[***]	[***]	12/31/2007	RES
4/1/2004	[***]	[***]		[***]	[***]	12/23/2007	RES
7/13/2004	[***]	[***]		[***]	[***]	7/12/2007	REMA
11/12/2004	[***]	[***]		[***]	[***]	12/31/2007	RES
10/25/2006	[***]	[***]		[***]	[***]	6/30/2007	RE Ell, Mand, Orm
11/8/2006	[***]	[***]		[***]	[***]	10/30/2007	REWG
11/17/2006	[***]	[***]		[***]	[***]	11/17/2007	RRI
11/22/2006	[***]	[***]		[***]	[***]	11/22/2007	REI
11/29/2006	[***]	[***]		[***]	[***]	11/29/2007	REWG
11/29/2006	[***]	[***]		[***]	[***]	11/29/2007	RRI
11/29/2006	[***]	[***]		[***]	[***]	10/31/2007	RES
1/16/2007	[***]	[***]		[***]	[***]	1/16/2008	REMA
1/18/2007	[***]	[***]		[***]	[***]	1/17/2008	RES
1/25/2007	[***]	[***]		[***]	[***]	12/31/2007	REWG
1/25/2007	[***]	[***]		[***]	[***]	12/31/2007	RE Eti
1/26/2007	[***]	[***]		[***]	[***]	12/31/2007	RES
2/16/2007	[***]	[***]		[***]	[***]	12/31/2007	RES
	47
	Total Pre-Funded Letters of Credit			$[***]

*** The confidential content of this Schedule 1.1(a) has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

SCHEDULE 1.1(b)

GUARANTORS

Reliant Energy Asset Management, LLC
Reliant Energy Broadband, Inc.
Reliant Energy California Holdings, LLC
Reliant Energy CapTrades Holding Corp.
Reliant Energy Communications, Inc.
Reliant Energy Coolwater, Inc.
Reliant Energy Corporate Services, LLC
Reliant Energy Electric Solutions, LLC
Reliant Energy Ellwood, Inc.
Reliant Energy Etiwanda, Inc.
Reliant Energy Florida, LLC
Reliant Energy Key/Con Fuels, LLC
Reliant Energy Mandalay, Inc.
Reliant Energy Northeast Generation, Inc.
Reliant Energy Northeast Holdings, Inc.
Reliant Energy Ormond Beach, Inc.
Reliant Energy Power Generation, Inc.
Reliant Energy Sabine (Delaware), Inc.
Reliant Energy Sabine (Texas), Inc.
Reliant Energy Services, Inc.
Reliant Energy Services Desert Basin, LLC
Reliant Energy Services Mid-Stream, LLC
Reliant Energy Seward, LLC
Reliant Energy Solutions East, LLC
Reliant Energy Trading Exchange, Inc.
Reliant Energy Ventures, Inc.
Reliant Energy Wholesale Generation, LLC

SCHEDULE 1.1(d)

SUBORDINATION TERMS

ARTICLE [___]

DEFINITIONS

     “Credit Agreement” means the Credit and Guaranty Agreement dated as of June 12, 2007 by and among Reliant Energy, Inc, as Borrower, the other Loan Parties referred to therein, as Guarantors, the other Lenders party thereto, and Deutsche Bank AG New York Branch as Administrative Agent and all collateral documents, guaranties, agreements and instruments executed in connection therewith, in each case, as amended, amended and restated, modified, renewed, refunded, replaced or refinanced from time to time, including, without limitation, increases in principal amount and extensions of term loans and other financings.

     “Designated Senior Indebtedness” means any and all Indebtedness outstanding under the Credit Agreement.

     “Hedging Obligations” means, with respect to any specified Person, the obligations of such Person under:

(1)	interest rate swap agreements, interest rate cap agreements and interest rate collar agreements; and
(2)	other agreements or arrangements designed to protect such Person against fluctuations in interest rates, currency rates or commodity prices.

     “Holder” means a Person in whose name a Security is registered in the Security Register.

     “Indebtedness” means, with respect to any specified Person, any indebtedness of such Person, whether or not contingent:

(1)	in respect of borrowed money;
(2)	evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);
(3)	in respect of banker’s acceptances;
(4)	representing capital lease obligations;
(5)	representing the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense, trade payable or representing secured floor plan financing; or
(6)	representing any Hedging Obligations,

if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person but not to exceed an aggregate principal amount of such Indebtedness equal to the fair market value of all such assets of such Person encumbered to secure such indebtedness) and, to the extent not otherwise included, the guarantee by the specified Person of any Indebtedness of any other Person.

     “Indenture” or “this Indenture” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of particular series of Securities established as contemplated by Section [___].

     “Obligations” means the principal, interest, penalties, fees, taxes, costs, indemnifications, reimbursements, damages and other liabilities payable under any documentation governing, securing or relating to any Indebtedness, whether or not a claim in respect thereof has been asserted and including, without limitation, Post-Petition Interest accruing or payable at the then applicable rate provided for in the applicable documentation.

     “Post-Petition Interest” shall mean interest accruing after the filing of any petition in bankruptcy, or the commencement of any case, proceeding or action relating to the bankruptcy, reorganization or insolvency of the Company or any of its Subsidiaries (or interest that would accrue but for the operation of applicable bankruptcy, reorganization or insolvency laws), whether or not a claim for post-filing or post-petition interest is allowed or allowable as a claim in any such case, proceeding or action.

     “Representative” means any trustee, agent or representative (if any) for an issue of Senior Indebtedness.

     “Security” or “Securities” means any note or notes, bond or bonds, debenture or debentures, or any other evidences of Indebtedness, of any series, authenticated and delivered from time to time under this Indenture.

     “Senior Indebtedness” means the principal of, premium, if any, and interest on, and all other Obligations payable in connection with (i) all the Company’s Indebtedness for money borrowed, for reimbursement of drawings under letters of credit and for Hedging Obligations, in each case, other than the Securities, whether outstanding on the date of execution of this Indenture or thereafter created, assumed or incurred, except such Indebtedness that is by its terms expressly stated to be not superior in right of payment to the Securities or to rank pari passu with the Securities and shall include, all Obligations under, or relating to, the Designated Senior Indebtedness, and (ii) any deferrals, renewals, refinancings, replacements, or extensions of any such Senior Indebtedness; provided, however, that Senior Indebtedness shall not include (1) any obligation of the Company to any Subsidiary, (2) any liability for Federal, state, local or other taxes owed or owing by the Company, (3) any trade accounts payable or other liability to trade creditors, in each case, arising from the provision to the Company of goods or services in the ordinary course of business (including guarantees thereof or instruments evidencing such

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liabilities), (4) any obligations with respect to any capital stock of the Company, except in respect of any mandatory redemptions thereof, or (5) any Indebtedness to the extent incurred in violation of this Indenture. The term “Indebtedness for money borrowed” as used herein shall include, without limitation, any obligation of, or any obligation guaranteed by, the Company for the repayment of borrowed money, whether or not evidenced by bonds, debentures, notes or other written instruments, and any obligation deferred for more than 180 days for the payment of the purchase price of property or assets (other than any obligation described in clause (3) of this definition).

     “Stated Maturity” means as to any Senior Indebtedness at any time, the final maturity date expressed as of such time in the documents governing such Senior Indebtedness.

ARTICLE [___]

SUBORDINATION

     Section [A]. Agreement To Subordinate. The Company agrees, and each Holder by accepting a Security agrees, that the Indebtedness evidenced by the Securities is subordinated in right of payment, to the extent and in the manner provided in this Article [___], to the prior indefeasible payment in full in cash of all Obligations in respect of Senior Indebtedness, and that such subordination is for the benefit of and enforceable by the holders of Senior Indebtedness. Only Indebtedness of the Company which is Senior Indebtedness shall rank senior to the Securities in accordance with the provisions set forth herein. All provisions of this Article [___] shall be subject to Section [L] of this Article [___].

     Section [B]. Liquidation, Dissolution, Bankruptcy. Upon any payment or distribution of the assets of the Company to creditors upon a total or partial liquidation or a total or partial dissolution of the Company or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Company or its respective properties: (1) holders of Senior Indebtedness shall be entitled to receive payment in full in cash of all Obligations in respect of Senior Indebtedness before the Holders of Securities shall be entitled to receive any payment of principal of or interest on or other amounts with respect to the Securities; and (2) until all Obligations (as provided in clause (1)) in respect of the Senior Indebtedness is paid indefeasibly in full in cash, any distribution to which the Holders of Securities would be entitled but for this Article [___] shall be made to holders of Senior Indebtedness as their interests may appear, except that Holders of Securities may receive shares of stock and any debt securities that (i) are subordinated to Senior Indebtedness to at least the same extent as the Securities are subordinated to the Senior Indebtedness and (ii) do not provide for mandatory redemptions (in the case of shares of stock) or the payment of principal (in the case of debt securities) prior to the Stated Maturity of any Senior Indebtedness.

     Section [C]. Default on Senior Indebtedness. The Company may not pay the principal of or interest on or other amounts with respect to the Securities, make any deposit pursuant to Section [___] [REF. TO SECTION REQUIRING ADVANCE DEPOSITS FOR PAYMENTS ON SECURITIES BEFORE DUE DATES AND DEFEASANCE PAYMENTS] or repurchase, redeem or otherwise acquire or retire any Securities (collectively, “pay the Securities”) if (i) any

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default in payment of Obligations in respect of any Designated Senior Indebtedness shall occur or (ii) any other default on Designated Senior Indebtedness occurs and the maturity of such Designated Senior Indebtedness is accelerated in accordance with its terms unless, in either case, (x) the default has been cured or waived and any such acceleration has been rescinded or (y) all Obligations in respect of such Designated Senior Indebtedness has been indefeasibly paid in full in cash; provided, however, that the Company may pay the Securities without regard to the foregoing if the Company and the Trustee receive written notice approving such payment from the Representatives of the Designated Senior Indebtedness with respect to which either of the events set forth in clause (i) or (ii) above has occurred or is continuing. During the continuance of any default (other than a default described in clause (i) or (ii) of the preceding sentence) with respect to any Designated Senior Indebtedness, pursuant to which the maturity thereof may be accelerated immediately without further notice (except such notice as may be required to effect such acceleration) or the expiration of any applicable grace periods, the Company may not pay the Securities for a period (a “Payment Blockage Period”) commencing upon the receipt by the Trustee (with a copy to the Company) of written notice (a “Blockage Notice”) of such default from the Representative of such Designated Senior Indebtedness specifying an election to effect a Payment Blockage Period, and ending 179 days thereafter (or earlier if such Payment Blockage Period is terminated (i) by written notice to the Trustee and the Company from the Person or Persons who gave such Blockage Notice, (ii) by payment in full in cash of all Obligations in respect of such Designated Senior Indebtedness, or (iii) unless the Designated Senior Indebtedness has been accelerated, because the default giving rise to such Blockage Notice is no longer continuing). Notwithstanding the provisions described in the immediately preceding sentence (but subject to the provisions contained in the first sentence of this Section), unless the holders of such Senior Indebtedness or the Representative of such holders shall have accelerated the maturity of such Senior Indebtedness, the Company may resume payments on the Securities after such Payment Blockage Period if this Article [     ] otherwise permits such payments at that time. No more than one Blockage Notice may be given in any consecutive 360-day period, irrespective of the number of defaults with respect to Senior Indebtedness during such period.

     Section [D]. Acceleration of Payment of Securities. If payment of the Securities is accelerated because of an Event of Default, the Company or the Trustee shall promptly notify the holders of the Senior Indebtedness (or their Representatives) of the acceleration. If any Senior Indebtedness is outstanding, the Company may not pay the Securities until five Business Days after holders of the Senior Indebtedness (or their Representatives) receive notice of such acceleration and, thereafter, may pay the Securities only if this Article [___] otherwise permits payments at that time.

     Section [E]. When Distributions Must Be Paid Over. In the event that the Trustee or any Holder receives any payment of any Obligations with respect to the Securities at a time when such payment is prohibited by this Article [     ], such payment shall be held by the Trustee or such Holder, in trust for the benefit of, and shall be paid forthwith over and delivered, upon proper written request, to, the holders of Senior Indebtedness (or their Representatives), as their respective interests may appear, for application to the payment of all Obligations with respect to Senior Indebtedness remaining unpaid to the extent necessary to pay such Obligations in full in cash in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness.

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     Section [F]. Subrogation. After all Senior Indebtedness is paid in full in cash and all commitments under the Designated Senior Indebtedness are terminated, and until the Securities are paid in full, Holders of Securities shall be subrogated to the rights of holders of Senior Indebtedness to receive distributions applicable to Senior Indebtedness to the extent that distributions otherwise payable to the Holders of Notes have been applied to payment of Obligations in respect of Senior Indebtedness. A distribution made under this Article [___] to holders of Senior Indebtedness which otherwise would have been made to Holders of Securities is not, as between the Company and Holders of Securities, a payment by the Company on Senior Indebtedness.

     Section [G]. Relative Rights. This Article [___] defines the relative rights of Holders of Securities and holders of Senior Indebtedness. Nothing in this Indenture shall: (1) impair, as between the Company and Holders of Securities, the obligation of the Company, which is absolute and unconditional, to pay principal of and interest on the Securities in accordance with their terms; or (2) prevent the Trustee or any Holder of Securities from exercising its available remedies upon an Event of Default, subject to the rights of holders of Senior Indebtedness to receive distributions otherwise payable to Holders of Securities.

     Section [H]. Subordination May Not Be Impaired by Company. No right of any holder of Senior Indebtedness to enforce the subordination of the Indebtedness evidenced by the Securities shall be impaired by any act or failure to act by the Company or by the failure of the Company to comply with this Indenture.

     Section [I]. Rights of Trustee and Paying Agent. Notwithstanding Section [C] of this Article [___], the Trustee or Paying Agent may continue to make payments on the Securities and shall not be charged with knowledge of the existence of facts that would prohibit the making of any such payments unless, not less than two Business Days prior to the date of such payment, a trust officer of the Trustee receives notice satisfactory to it that payments may not be made under this Article [___]. The Company, the Registrar or co-registrar, the Paying Agent, a Representative or a holder of Designated Senior Indebtedness may give the notice; provided, however, that, if an issue of Designated Senior Indebtedness has a Representative, only the Representative may give the notice. The Trustee in its individual or any other capacity may hold Senior Indebtedness with the same rights it would have if it were not Trustee. The Registrar and co-registrar and the Paying Agent may do the same with like rights. The Trustee shall be entitled to all the rights set forth in this Article [___] with respect to any Senior Indebtedness, which may at any time be held by it, to the same extent as any other holder of Senior Indebtedness; and nothing in Article [___] [REF. TO ARTICLE RE DUTIES OF TRUSTEE] shall deprive the Trustee of any of its rights as such holder. Nothing in this Article [___] shall apply to claims of, or payments to, the Trustee under or pursuant to Article [___] [REF. TO ARTICLE RE DUTIES OF TRUSTEE].

     Section [J]. Distribution or Notice to Representative. Whenever a distribution is to be made or a notice given to holders of Senior Indebtedness, the distribution may be made and the notice given to their Representatives (if any).

     Section [K]. Article [___] Not To Prevent Events of Default or Limit Right To Accelerate. The failure to make a payment pursuant to the Securities by reason of any provision

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in this Article [___] shall not be construed as preventing the occurrence of an Event of Default. Nothing in this Article [___] shall have any effect on the right of the Holders of Securities or the Trustee to accelerate the maturity of the Securities.

     Section [L]. Trust Moneys Not Subordinated. Notwithstanding anything contained herein to the contrary, payments from money or the proceeds of U.S. government obligations held in trust under Section [___] [SECTION REQUIRING ADVANCE DEPOSITS WITH TRUSTEE FOR PAYMENTS ON SECURITIES BEFORE DUE DATES, WITH SUCH MONEYS THEN HELD IN TRUST] by the Trustee for the payment of principal of and interest on the Securities shall, to the extent that deposit or payment into trust of such monies or obligations was made in accordance with this Article [     ], not be subordinated to the prior payment of any Senior Indebtedness, or subject to the restrictions set forth in this Article [___], and none of the Holders of Securities shall be obligated to pay over any such amount to the Company, or any holder of Senior Indebtedness of the Company or any other creditor of the Company.

     Section [M]. Trustee Entitled to Rely. Upon any payment or distribution pursuant to this Article [___], the Trustee and the Holders of Securities shall be entitled to rely (i) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section [B] of this Article [___] are pending that is consistent with this Article[ ], (ii) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders of Securities that is consistent with this Article [     ] or (iii) upon the Representatives for the holders of Senior Indebtedness for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Indebtedness, and other Indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article [___]. In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article [___], the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article [___], and, if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.

     Section [N]. Trustee To Effectuate Subordination. Each Holder of Securities by accepting a Security authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination between the Holders of Securities and the holders of Senior Indebtedness as provided in this Article [___] and appoints the Trustee as attorney-in-fact for any and all such purposes.

     Section [O]. Trustee Not Fiduciary for Holders of Senior Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall not be liable to any such holders if it shall mistakenly pay over or distribute to Holders of Securities, the Company, or any other Person, money or assets to which any holders of Senior Indebtedness

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shall be entitled by virtue of this Article [___] or otherwise, except if such payment was made as a result of the willful misconduct or gross negligence of the Trustee.

Section [P]. Reliance by Holders of Senior Indebtedness on Subordination Provisions. Each Holder of Securities by accepting a Security acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Senior Indebtedness whether such Senior Indebtedness was created or acquired before or after the issuance of the Securities, to acquire and continue to hold, or to continue to hold, such Senior Indebtedness and such holder of Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Senior Indebtedness.

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SCHEDULE 1.1(e)

MORTGAGES AND TITLE POLICIES

Item 1

     (a) the Amended and Restated Second Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing between Reliant Energy Indian River, LLC (now known as Reliant Energy Florida, LLC), as mortgagor, and Wachovia Bank, National Association, as Collateral Trustee, as mortgagee, dated July 1, 2003, recorded on July 10, 2003 in the Public Records of Brevard County, Florida under File Number 2003207630 in Official Records Book 4974, Page 1831, as supplemented by that certain Supplement to Amended and Restated Second Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of December 22, 2004 between Reliant Energy Florida, LLC, as mortgagor, and Wachovia Bank, National Association, as Collateral Trustee, as mortgagee (unrecorded), as further supplemented by that certain Second Supplement to Amended and Restated Second Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated October 7, 2005 between Reliant Energy Florida, LLC, as mortgagor, and Wachovia Bank, National Association, as Collateral Trustee, as mortgagee (unrecorded), as further supplemented by that certain Third Supplement to Amended and Restated Second Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated December 1, 2006 between Reliant Energy Florida, LLC, as mortgagor, and U.S. Bank National Association (as successor-in-interest to Wachovia Bank, National Association), as Collateral Trustee, as mortgagee (unrecorded); and

     (b) the Amended and Restated Second Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing between Reliant Energy Osceola, LLC, as mortgagor, and Wachovia Bank, National Association, as Collateral Trustee, as mortgagee, dated July 1, 2003, recorded on July 10, 2003 in the Public Records of Osceola County, Florida under File Number 2003121721 in Official Records Book 2289, Page 1919, as supplemented by that certain Supplement to Amended and Restated Second Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated December 22, 2004 between Reliant Energy Florida, LLC (into which Reliant Energy Osceola, LLC, among other companies, was merged), as mortgagor, and Wachovia Bank, National Association, as Collateral Trustee, as mortgagee (unrecorded), as further supplemented by that certain Second Supplement to Amended and Restated Second Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated October 7, 2005 between Reliant Energy Florida, LLC, as mortgagor, and Wachovia Bank, National Association, as Collateral Trustee, as mortgagee (unrecorded), as further supplemented by that certain Third Supplement to Amended and Restated Second Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated December 1, 2006 between Reliant Energy Florida, LLC, as mortgagor, and U.S. Bank National Association (as successor-in-interest to Wachovia Bank, National Association), as Collateral Trustee, as mortgagee (unrecorded).

Item 2

     (a) the Amended and Restated Second Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing between Reliant Energy Aurora, LP, as mortgagor, and Wachovia Bank, National Association, as Collateral Trustee, as mortgagee, dated July 1, 2003, recorded on July 11, 2003 under Document Number R2003-264365 in the Recorder’s Office of DuPage County, Illinois, as supplemented by that certain First Supplement to Amended and Restated Second Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated December 22, 2004 between Reliant Energy Aurora, LP, as mortgagor, and Wachovia Bank, National Association, as Collateral Trustee, as mortgagee, recorded on December 22, 2004 under Document Number R2004-319528 in the Recorder’s Office of DuPage County, Illinois, as further supplemented by that certain Second Supplement to Amended and Restated Second Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated October 7, 2005 between Reliant Energy Wholesale Generation, LLC (into which Reliant Energy Aurora, LP, among other companies, was merged), as mortgagor, and Wachovia Bank, National Association, as Collateral Trustee, as mortgagee, recorded on October 25, 2005 under Document Number R2005-238850 in the Recorder’s Office of DuPage County, Illinois, as further supplemented by that certain Third Supplement to Amended and Restated Second Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated December 1, 200 between Reliant Energy Wholesale Generation, LLC (into which Reliant Energy Aurora, LP, among other companies, was merged), as mortgagor, and U.S. Bank National Association (as successor-in-interest to Wachovia Bank, National Association), as Collateral Trustee, as mortgagee, recorded on December 7, 2005 under Document Number R2006-235455 in the Recorder’s Office of DuPage County, Illinois;

     (b) the Amended and Restated Second Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing by Reliant Energy Bighorn, LLC, as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of Wachovia Bank, National Association, as Collateral Trustee, as beneficiary, dated July 1, 2003, recorded on July 8, 2003 as Instrument Number 00630 in Book 20030708 of the Official Records of Clark County, Nevada, as supplemented by that certain First Supplement to Amended and Restated Second Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated December 22, 2004 by Reliant Energy Wholesale Generation, LLC (into which Reliant Energy Bighorn, LLC, among other companies, was merged), as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of Wachovia Bank, National Association, as Collateral Trustee, as beneficiary, recorded as Instrument Number 3580 in Book 20041222 of the Official Records of Clark County, Nevada on December 22, 2004, as further supplemented by that certain Second Supplement to Amended and Restated Second Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated October 7, 2005 by Reliant Energy Wholesale Generation, LLC, as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of Wachovia Bank, National Association, as Collateral Trustee, as beneficiary, recorded as Instrument Number 02253 in Book 20051102 of the Official Records of Clark County, Nevada on November 2, 2005, as further supplemented by that certain Third Supplement to Amended and Restated Second Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated December 1, 2006 by Reliant Energy Wholesale Generation, LLC, as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of U.S. Bank National Association (as successor-in-interest to Wachovia Bank, National Association), as

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Collateral Trustee, as beneficiary, recorded as Instrument Number 0005432 in Book 20061207 of the Official Records of Clark County, Nevada on December 7, 2006;

     (c) the Amended and Restated Second Fee and Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing by Reliant Energy Choctaw County, LLC, as trustor, in favor of W. Rodney Clement Jr., as trustee, for the benefit of Wachovia Bank, National Association, as Collateral Trustee, as beneficiary, dated July 1, 2003, recorded on July 7, 2003 in Land Mortgage Book 158 at Page 685 in the Office of the Chancery Clerk of Choctaw County, Mississippi, as supplemented by that certain First Supplement to Amended and Restated Second Fee and Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated December 22, 2004 by Reliant Energy Wholesale Generation, LLC (into which Reliant Energy Choctaw County, LLC, among other companies, was merged), as trustor, in favor of W. Rodney Clement Jr., as trustee, for the benefit of Wachovia Bank, National Association, as Collateral Trustee, as beneficiary, recorded in Land Mortgage Book 166 at Page 275 in the Office of the Chancery Clerk of Choctaw County, Mississippi, on December 22, 2004, as further supplemented by that certain Second Supplement to Amended and Restated Second Fee and Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated October 7, 2005 by Reliant Energy Wholesale Generation, LLC, as trustor, in favor of W. Rodney Clement Jr., as trustee, for the benefit of Wachovia Bank, National Association, as Collateral Trustee, as beneficiary, recorded in Land Mortgage Book 169 at Page 736 in the Office of the Chancery Clerk of Choctaw County, Mississippi, on October 25, 2005, as further supplemented by that certain Third Supplement to Amended and Restated Second Fee and Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated December 1, 2006 by Reliant Energy Wholesale Generation, LLC, as trustor, in favor of W. Rodney Clement Jr., as trustee, for the benefit of U.S. Bank National Association (as successor-in-interest to Wachovia Bank, National Association), as Collateral Trustee, as beneficiary, recorded in Land Mortgage Book 174 at Page 491 in the Office of the Chancery Clerk of Choctaw County, Mississippi, on December 7, 2006;

     (d) the Amended and Restated Second Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing by Reliant Energy Coolwater, Inc., as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of Wachovia Bank, National Association, as Collateral Trustee, as beneficiary, dated July 1, 2003, recorded on July 8, 2003 as Instrument Number 2003-0496401 in the Official Records of San Bernardino County, California, as supplemented by that certain First Supplement to Amended and Restated Second Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated December 22, 2004 by Reliant Energy Coolwater, Inc., as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of Wachovia Bank, National Association, as Collateral Trustee, as beneficiary, recorded as Document Number 2004-0961244 in the Official Records of San Bernardino County, California on December 30, 2004, as further supplemented by that certain Second Supplement to Amended and Restated Second Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated October 7, 2005 by Reliant Energy Coolwater, Inc., as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of Wachovia Bank, National Association, as Collateral Trustee, as beneficiary, recorded as Document Number 2005-0831126 in the Official Records of San Bernardino County, California on November 3, 2005, as further supplemented by that certain Third Supplement to Amended and Restated Second Deed of Trust, Assignment of

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Leases and Rents, Security Agreement and Fixture Filing dated December 1, 2006 by Reliant Energy Coolwater, Inc., as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of U.S. Bank National Association (as successor-in-interest to Wachovia Bank, National Association), as Collateral Trustee, as beneficiary, recorded as Document Number 2006-0851275 in the Official Records of San Bernardino County, California on December 11, 2006;

     (e) the Amended and Restated Second Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing by Reliant Energy Ellwood, Inc., as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of Wachovia Bank, National Association, as Collateral Trustee, as beneficiary, dated July 1, 2003, recorded on July 8, 2003 as Instrument Number 2003-0090272 in the Official Records of Santa Barbara County, California, as supplemented by that certain First Supplement to Amended and Restated Second Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated December 22, 2004 by Reliant Energy Ellwood, Inc., as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of Wachovia Bank, National Association, as Collateral Trustee, as beneficiary, recorded as Instrument Number 2004-0136228 in the Official Records of Santa Barbara County, California on December 27, 2004, as further supplemented by that certain Second Supplement to Amended and Restated Second Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated October 7, 2005 by Reliant Energy Ellwood, Inc., as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of Wachovia Bank, National Association, as Collateral Trustee, as beneficiary, recorded as Instrument Number 2005-0109303 in the Official Records of Santa Barbara County, California on November 14, 2005, as further supplemented by that certain Third Supplement to Amended and Restated Second Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated December 1, 2006 by Reliant Energy Ellwood, Inc., as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of U.S. Bank National Association (as successor-in-interest to Wachovia Bank, National Association), as Collateral Trustee, as beneficiary, recorded as Instrument Number 2006-0095532 in the Official Records of Santa Barbara County, California on December 8, 2006;

     (f) the Amended and Restated Second Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing by Reliant Energy Etiwanda, Inc., as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of Wachovia Bank, National Association, as Collateral Trustee, as beneficiary, dated July 1, 2003, recorded on July 8, 2003 as Document Number 2003-0496391 in the Official Records of San Bernardino County, California and recorded on July 8, 2003 as Document Number 2003-507416 in the Official Records of Riverside County, California, as supplemented by that certain First Supplement to Amended and Restated Second Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated December 22, 2004 by Reliant Energy Etiwanda, Inc., as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of Wachovia Bank, National Association, as Collateral Trustee, as beneficiary, recorded as Document Number 2004-0961247 in the Official Records of San Bernardino County, California on December 30, 2004, and as Document Number 2005-0022917 in the Official Records of Riverside County, California on January 10, 2005, as further supplemented by that certain Second Supplement to Amended and Restated Second Deed of Trust, Assignment of Leases and

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Rents, Security Agreement and Fixture Filing dated October 7, 2005 by Reliant Energy Etiwanda, Inc., as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of Wachovia Bank, National Association, as Collateral Trustee, as beneficiary, recorded as Document Number 2005-0831105 in the Official Records of San Bernardino County, California on November 3, 2005, and as Document Number 2005-0926226 in the Official Records of Riverside County, California on November 8, 2005, as further supplemented by that certain Third Supplement to Amended and Restated Second Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated December 1, 2006 by Reliant Energy Etiwanda, Inc., as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of U.S. Bank National Association (as successor-in-interest to Wachovia Bank, National Association), as Collateral Trustee, as beneficiary, recorded as Document Number 2006-0851274 in the Official Records of San Bernardino County, California on December 11, 2006, and as Document Number 2006-0905232 in the Official Records of Riverside County, California on December 8, 2006;

     (g) the Amended and Restated Second Fee and Leasehold Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing between Reliant Energy Hunterstown, LLC, as mortgagor, and Wachovia Bank, National Association, as Collateral Trustee, as mortgagee, dated July 1, 2003, recorded on July 8, 2003 in the Office of the Recorder of Deeds in and for Adams County, Pennsylvania in Mortgage Book 3185, Page 1, as supplemented by that certain First Supplement to Amended and Restated Second Fee and Leasehold Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated December 22, 2004 between Reliant Energy Wholesale Generation, LLC (into which Reliant Energy Hunterstown, LLC, among other companies, was merged), as mortgagor, and Wachovia Bank, National Association, as Collateral Trustee, as mortgagee, recorded on December 22, 2004 in the Office of the Recorder of Deeds in and for Adams County, Pennsylvania in Mortgage Book 3814, Page 274, as further supplemented by that certain Second Supplement to Amended and Restated Second Fee and Leasehold Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing made as of October 6, 2005 but effective as of October 7, 2005 between Reliant Energy Wholesale Generation, LLC, as mortgagor, and Wachovia Bank, National Association, as Collateral Trustee, as mortgagee, recorded on October 26, 2005 in the Office of the Recorder of Deeds in and for Adams County, Pennsylvania in Mortgage Book 4180, Page 102, as further supplemented by that certain Third Supplement to Amended and Restated Second Fee and Leasehold Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing made as of November 30, 2006 but effective as of December 1, 2006 between Reliant Energy Wholesale Generation, LLC, as mortgagor, and U.S. Bank National Association (as successor-in-interest to Wachovia Bank, National Association), as Collateral Trustee, as mortgagee, recorded on December 11, 2006 in the Office of the Recorder of Deeds in and for Adams County, Pennsylvania in Mortgage Book 4673, Page 49;

     (h) the Amended and Restated Second Fee and Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing by Reliant Energy Mandalay, Inc., as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of Wachovia Bank, National Association, as Collateral Trustee, as beneficiary, dated July 1, 2003, recorded on July 15, 2003 as Instrument Number 20030715-0264709 in the Official Records of Ventura County, California, as supplemented by that certain First Supplement to Amended and Restated Second Fee and Leasehold Deed of Trust, Assignment of Leases and Rents, Security

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Agreement and Fixture Filing dated December 22, 2004 by Reliant Energy Mandalay, Inc., as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of Wachovia Bank, National Association, as Collateral Trustee, as beneficiary, recorded as Instrument Number 20041229-0344165 in the Official Records of Ventura County, California on December 29, 2004, as further supplemented by that certain Second Supplement to Amended and Restated Second Fee and Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated October 7, 2005 by Reliant Energy Mandalay, Inc., as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of Wachovia Bank, National Association, as Collateral Trustee, as beneficiary, recorded as Instrument Number 20051107-0272487 in the Official Records of Ventura County, California on November 7, 2005, as further supplemented by that certain Third Supplement to Amended and Restated Second Fee and Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated December 1, 2006 by Reliant Energy Mandalay, Inc., as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of U.S. Bank National Association (as successor-in-interest to Wachovia Bank, National Association), as Collateral Trustee, as beneficiary, recorded as Instrument Number 20061211-00258860-0 in the Official Records of Ventura County, California on December 11, 2006;

     (i) the Amended and Restated Second Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing by Reliant Energy Ormond Beach, Inc., as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of Wachovia Bank, National Association, as Collateral Trustee, as beneficiary, dated July 1, 2003, recorded on July 15, 2003 as Instrument Number 20030715-0263977 in the Official Records of Ventura County, California, as supplemented by that certain First Supplement to Amended and Restated Second Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated December 22, 2004 by Reliant Energy Ormond Beach, Inc., as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of Wachovia Bank, National Association, as Collateral Trustee, as beneficiary, recorded as Instrument Number 20041229-0344171 in the Official Records of Ventura County, California on December 29, 2004, as further supplemented by that certain Second Supplement to Amended and Restated Second Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated October 7, 2005 by Reliant Energy Ormond Beach, Inc., as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of Wachovia Bank, National Association, as Collateral Trustee, as beneficiary, recorded as Instrument Number 20051027-0265505 in the Official Records of Ventura County, California on October 27, 2005, as further supplemented by that certain Third Supplement to Amended and Restated Second Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated December 1, 2006 by Reliant Energy Ormond Beach, Inc., as trustor, in favor of Fidelity National Title Insurance Company, as trustee, for the benefit of U.S. Bank National Association (as successor-in-interest to Wachovia Bank, National Association), as Collateral Trustee, as beneficiary, recorded as Instrument Number 20061211-00258859-0 in the Official Records of Ventura County, California on December 11, 2006;

     (j) the Amended and Restated Second Fee and Leasehold Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing between Reliant Energy Seward, LLC, as mortgagor, and Wachovia Bank, National Association, as Collateral Trustee, as mortgagee, dated July 1, 2003, recorded on July 9, 2003 in the Office of the Recorder of Deeds in and for

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Indiana County, Pennsylvania in Mortgage Book Volume 1305 Page 452, as supplemented by that certain First Supplement to Amended and Restated Second Fee and Leasehold Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated effective as of December 22, 2004 between Reliant Energy Seward, LLC, as mortgagor, and Wachovia Bank, National Association, as Collateral Trustee, as mortgagee, recorded on December 23, 2004 in the Office of the Recorder of Deeds in and for Indiana County, Pennsylvania in Mortgage Book Volume 1454, Page 649, as further supplemented by that certain Second Supplement to Amended and Restated Second Fee and Leasehold Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing made as of October 6, 2005 but effective as of October 7, 2005 between Reliant Energy Seward, LLC, as mortgagor, and Wachovia Bank, National Association, as Collateral Trustee, as mortgagee, recorded on October 28, 2005 in the Office of the Recorder of Deeds in and for Indiana County, Pennsylvania in Mortgage Book Volume 1536, Page 442, as further supplemented by that certain Third Supplement to Amended and Restated Second Fee and Leasehold Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing made as of November 30, 2006 but effective as of December 1, 2006 between Reliant Energy Seward, LLC, as mortgagor, and U.S. Bank National Association (as successor-in-interest to Wachovia Bank, National Association), as Collateral Trustee, as mortgagee, recorded on December 7, 2006 in the Office of the Recorder of Deeds in and for Indiana County, Pennsylvania in Mortgage Book Volume 1640, Page 226;

     (k) the Amended and Restated Second Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing between Reliant Energy Shelby County, LP, as mortgagor, and Wachovia Bank, National Association, as Collateral Trustee, as mortgagee, dated July 1, 2003, recorded on July 7, 2003 under Document Number 03-3266 in the Recorder’s Office of Shelby County, Illinois and recorded on July 10, 2003 under Document Number 2003R01809 in Record Book 152, Page 68 of the Recorder’s Office of Cumberland County, Illinois, as supplemented by that certain First Supplement to Amended and Restated Second Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated December 22, 2004 between Reliant Energy Shelby County, LP, as mortgagor, and Wachovia Bank, National Association, as Collateral Trustee, as mortgagee, recorded on December 23, 2004 under Document Number 04-4915 in the Recorder’s Office of Shelby County, Illinois, and recorded on December 22, 2004 under Document Number 2004R02716 in the Recorder’s Office of Cumberland County, Illinois, as further supplemented by that certain Second Supplement to Amended and Restated Second Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated October 7, 2005 between Reliant Energy Wholesale Generation, LLC (into which Reliant Energy Shelby County, LP, among other companies, was merged), as mortgagor, and Wachovia Bank, National Association, as Collateral Trustee, as mortgagee, recorded on October 31, 2005 under Document Number 05-3967 in the Recorder’s Office of Shelby County, Illinois, and recorded on October 25, 2005 under Document Number 2005R02870 in the Recorder’s Office of Cumberland County, Illinois, as further supplemented by that certain Third Supplement to Amended and Restated Second Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated December 1, 2006 between Reliant Energy Wholesale Generation, LLC (into which Reliant Energy Shelby County, LP, among other companies, was merged), as mortgagor, and U.S. Bank National Association (as successor-in-interest to Wachovia Bank, National Association), as Collateral Trustee, as mortgagee, recorded on December 7, 2006 under Document Number 06-4008 in the Recorder’s

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Office of Shelby County, Illinois, and recorded on December 7, 2006 under Document Number 2006R02442 in the Recorder’s Office of Cumberland County, Illinois; and

     (l) the Existing Florida Mortgages.

Item 3

     (a) Loan Policy of Title Insurance (Policy No. 26-041-92-198619) issued by Fidelity National Title Insurance Company of New York, as co-insurer, and endorsed by First American Title Insurance Company (Co-Insurance Policy Certificate No. 32602-ILCI-003-B), as co-insurer, as modified by Modification Endorsement dated July 11, 2003, and further modified by Modification Endorsement dated December 22, 2004, as further modified by Modification Endorsement dated October 25, 2005, and as further modified by Modification Endorsement dated December 7, 2006;

     (b) Loan Policy of Title Insurance (Policy No. 27-041-92-243358) issued by Fidelity National Title Insurance Company and re-insured by Chicago Title Insurance Company, as modified by Modification Endorsement dated July 8, 2003, and further modified by Modification Endorsement dated December 22, 2004, as further modified by Modification Endorsement dated November 2, 2005, and as further modified by Modification Endorsement dated December 7, 2006;

     (c) (i) Loan Policy of Title Insurance (Policy No. G47-1007534) issued by Lawyers Title Insurance Corporation as co-insurer, and re-insured by Commonwealth Land Title Insurance Company and Transnation Title Insurance Company, (ii) Loan Policy of Title Insurance (Policy No. 26-041-92-198990) issued by Fidelity National Title Insurance Company of New York as co-insurer, and (iii) Loan Policy of Title Insurance (Policy No. M-9994-5515164) issued by Stewart Title Guaranty Company, all as modified by Modification Endorsements dated July 1, 2003, and all as further modified by Modification Endorsements dated December 22, 2004, and all as further modified by Modification Endorsement dated October 25, 2005, and all as further modified by Modification Endorsement dated December 7, 2006;

     (d) Loan Policy of Title Insurance (Policy No. 27-041-92-243362) issued by Fidelity National Title Insurance Company, as co-insurer, and endorsed by First American Title Insurance Company (Co-Insurance Policy Certificate No. 32602-CACI-004-B), as co-insurer, as modified by Modification Endorsement dated July 8, 2003, and further modified by Modification Endorsement dated December 22, 2004, and as further modified by Modification Endorsement dated November 3, 2005, and as further modified by Modification Endorsement dated December 7, 2006;

     (e) Loan Policy of Title Insurance (Policy No. 27-041-92-243351) issued by Fidelity National Title Insurance Company, as co-insurer, and endorsed by First American Title Insurance Company (Co-Insurance Policy Certificate No. 32602-CACI-005-B), as co-insurer, as modified by Modification Endorsement dated July 8, 2003, and further modified by Modification Endorsement dated December 22, 2004, and as further modified by Modification Endorsement

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dated November 14, 2005, and as further modified by Modification Endorsement dated December 7, 2006;

     (f) Loan Policy of Title Insurance (Policy No. 27-041-92-243364) issued by Fidelity National Title Insurance Company, as co-insurer, and endorsed by First American Title Insurance Company (Co-Insurance Policy Certificate No. 32602-CACI-006-B), as co-insurer, and re-insured by Fidelity National Title Insurance Company of New York, Security Union Title Insurance Company, Chicago Title Insurance Company, Ticor Title Insurance, and Alamo Title Insurance, as modified by Modification Endorsement dated July 8, 2003, and further modified by Modification Endorsement dated December 22, 2004, and as further modified by Modification Endorsement dated November 3, 2005 as to San Bernardino County and dated November 8, 2005 as to Riverside County, and as further modified by Modification Endorsement dated December 7, 2006 as to San Bernardino County and dated December 7, 2006 as to Riverside County;

     (g) (i) Loan Policy of Title Insurance (Policy No. G47-1651038) issued by Lawyers Title Insurance Corporation as co-insurer, and re-insured by Commonwealth Land Title Insurance Company and Transnation Title Insurance Company, (ii) Loan Policy of Title Insurance (Policy No. 26-041-92-198991) issued by Fidelity National Title Insurance Company of New York as co-insurer, and (iii) Loan Policy of Title Insurance (Policy No. M-9994-5515162) issued by Stewart Title Guaranty Company, all as modified by Modification Endorsements dated July 1, 2003, and all as further modified by Modification Endorsements dated December 22, 2004, and all as further modified by Modification Endorsement dated October 26, 2005, and all as further modified by Modification Endorsement dated December 7, 2006;

     (h) Loan Policy of Title Insurance (Policy No. 5482-255764) issued by Fidelity National Title Insurance Company of New York, and re-insured by Security Union Title Insurance Company, Chicago Title Insurance Company, Ticor Title Insurance, and First American Title Insurance Company, as modified by Modification Endorsement dated July 10, 2003;

     (i) Loan Policy of Title Insurance (Policy No. 27-041-92-243353) issued by Fidelity National Title Insurance Company, as co-insurer, and endorsed by First American Title Insurance Company (Co-Insurance Policy Certificate No. 32602-CACI-007-B), as co-insurer, and re-insured by Fidelity National Title Insurance Company of New York, Security Union Title Insurance Company, Chicago Title Insurance Company, Ticor Title Insurance, and Alamo Title Insurance, as modified by Modification Endorsement dated July 15, 2003, and further modified by Modification Endorsement dated December 22, 2004, and as further modified by Modification Endorsement dated November 7, 2005, and as further modified by Modification Endorsement dated December 7, 2006;

     (j) Loan Policy of Title Insurance (Policy No. 27-041-92-243360) issued by Fidelity National Title Insurance Company, as co-insurer, and endorsed by First American Title Insurance Company (Co-Insurance Policy Certificate No. 32602-CACI-008-B), as co-insurer, and re-insured by Fidelity National Title Insurance Company of New York, Security Union Title Insurance Company, Chicago Title Insurance Company, Ticor Title Insurance, and Alamo Title

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Insurance, as modified by Modification Endorsement dated July 15, 2003, and further modified by Modification Endorsement dated December 22, 2004, and as further modified by Modification Endorsement dated October 27, 2005, and as further modified by Modification Endorsement dated December 7, 2006;

     (k) Loan Policy of Title Insurance (Policy No. 5482-255762) issued by Fidelity National Title Insurance Company of New York, and re-insured by Security Union Title Insurance Company, Chicago Title Insurance Company, Ticor Title Insurance, and First American Title Insurance Company, as modified by Modification Endorsement dated July 10, 2003;

     (l) (i) Loan Policy of Title Insurance (Policy No. G47-1651037) issued by Lawyers Title Insurance Corporation as co-insurer, as re-insured by Commonwealth Land Title Insurance Company, (ii) Loan Policy of Title Insurance (Policy No. 26-041-92-198989) issued by Fidelity National Title Insurance Company of New York as co-insurer, and (iii) Loan Policy of Title Insurance (Policy No. M-9994-5515163) issued by Stewart Title Guaranty Company, all as modified by Modification Endorsements dated July 1, 2003, and all as further modified by Modification Endorsements dated December 22, 2004, and all as further modified by Modification Endorsement dated October 28, 2005, and all as further modified by Modification Endorsement dated December 7, 2006; and

     (m) Loan Policy of Title Insurance (Policy No. 26-041-92-198630) issued by Fidelity National Title Insurance Company of New York, , as co-insurer, and endorsed by First American Title Insurance Company (Co-Insurance Policy Certificate No. 32602-ILCI-010-B), as co-insurer, and re-insured by Chicago Title and Trust Company, Security Union Title Insurance Company, Chicago Title Insurance Company, and Ticor Title Insurance, as modified by Modification Endorsement dated July 10, 2003, and further modified by Modification Endorsement dated December 22, 2004, and as further modified by Modification Endorsement dated October 31, 2005 as to Shelby County and dated October 25, 2005 as to Cumberland County, and as further modified by Modification Endorsement dated December 7, 2006 as to Shelby County and dated December 7, 2006 as to Cumberland County.

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SCHEDULE 1.1(f)

SECURED HEDGE AGREEMENTS

None

SCHEDULE 1.1(g)

EXISTING INDEBTEDNESS

1. 12% Note Indenture dated as of April 27, 2000 between Orion Power Holdings, Inc. and Wilmington Trust Company, and any “Notes” as defined therein or executed pursuant thereto

2. Participation Agreement dated August 24, 2000, among Conemaugh Lessor Genco LLC, as Owner Lessor, Reliant Energy Mid-Atlantic Power Holdings, LLC, as Facility Lessee, Wilmington Trust Company, as Lessor Manager, PSEGR Conemaugh Generation, LLC, as Owner Participant, Bankers Trust Company, as Lease Indenture Trustee and Pass Through Trustee, as amended to the date hereof, and any “Operative Documents” as defined therein or executed pursuant thereto

3. Participation Agreement dated as of August 24, 2000, among Keystone Lessor Genco LLC, as Owner Lessor, Reliant Energy Mid-Atlantic Power Holdings, LLC, as Facility Lessee, Wilmington Trust Company, as Lessor Manager, PSEGR Keystone Generation, LLC, as Owner Participant, Bankers Trust Company, as Lease Indenture Trustee and as Pass Through Trustee, as amended to the date hereof, and any “Operative Documents” as defined therein or executed pursuant thereto

4. Participation Agreement dated August 24, 2000 among Shawville Lessor Genco LLC, as Owner Lessor, Reliant Energy Mid-Atlantic Power Holdings, LLC, a Facility Lessee, Wilmington Trust Company, as Lessor Manager, PSEGR Shawville Generation, LLC, as Owner Participant, Bankers Trust Company, as Lease Indenture Trustee and as Pass Through Trustee, as amended to the date hereof, and any “Operative Documents” as defined therein or executed pursuant thereto

5. Credit Agreement dated as of December 15, 1999 by and among Reliant Energy Channelview LP, the lenders named on the signature pages thereto, Bank of America, N.A., as Administrative Agent and as Collateral Agent, and Teachers Insurance and Annuity of America, as Institutional Agent, as amended to the date hereof, and any “Loan Documents” as defined therein or executed pursuant thereto

6. Reliant Energy, Inc.’s 9.25% Senior Secured Notes due 2010 issued under an Indenture dated as of July 1, 2003 between Reliant Energy, Inc. and Wilmington Trust Company, as Trustee, and any “Note Documents” as defined therein or executed pursuant thereto.

7. Reliant Energy, Inc.’s 9.50% Senior Secured Notes due 2013 issued under an Indenture dated as of July 1, 2003 between Reliant Energy, Inc. and Wilmington Trust Company, as Trustee, and any “Note Documents” as defined therein or executed pursuant thereto

8. Reliant Energy, Inc.’s 5.00% Convertible Senior Subordinated Notes due 2010 issued under an Indenture dated as of June 24, 2003 between Reliant Energy, Inc. and Wilmington Trust Company, as Trustee.

9. Reliant Energy, Inc.’s 6.75% Senior Secured Notes due 2014 issued under a First Supplemental Indenture dated as of December 22, 2004 to Senior Indenture dated as of December 22, 2004 between Reliant Energy, Inc. and Wilmington Trust Company, as Trustee, and any “Note Documents” as defined therein or executed pursuant thereto

Capital Leases

1. Facilities Agreement dated as of the 31st day of July, 2002, by and between Kern River Gas Transmission Company and Reliant Energy Bighorn L.L.C. (now Reliant Energy Wholesale Generation, L.L.C.), pertaining to the design, permitting, construction and operation of lateral pipeline facilities for the purpose of interconnecting the Bighorn plant to the Kern River gas mainline.

2. Facilities Services Agreement entered into on March 29, 2004 but effective as of October 1, 2003, by and among Atlantic City Electric Company, Conemaugh Power LLC, Constellation Power Source Generation, Inc., Exelon Generation Company, PSEG Fossil LLC, Reliant Energy Mid-Atlantic Power Holdings, LLC, UGI Development Company and Conemaugh Fuels, LLC.

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SCHEDULE 2.1

COMMITMENTS
AND PRO RATA SHARES

					Revolver L/C
					Issuer Amount
					for Revolving
	Revolving Credit		Pre-Funded L/C		Letters of
Lender	Commitment		Commitment		Credit
Deutsche Bank AG,		$***		$***		$***
New York Branch
Goldman Sachs		***		***		***
Credit Partners L.P.
JPMorgan Chase		***		***		***
Bank, N.A.
Merrill Lynch		***		***		***
Capital Corporation
Bear, Stearns & Co.		***		***		***
Inc.
ABN Amro Bank N.V.		***		***		***
Total	$	500,000,000	$	250,000,000	$	500,000,000

*** The confidential content of this Schedule 2.1 has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

SCHEDULE 5.8(c)

EFFECTIVE DATE MORTGAGED PROPERTIES

	Owned
Project	Real Property Assets*	Location	Owner
1. Aurora	Fee parcel and easement parcel as set forth in Loan Policy Number 26-041-92-198619	2909 North Eola Road, Aurora, DuPage County, Illinois 60504	Reliant Energy Wholesale Generation, LLC
2. Bighorn	Parcels I and II (leasehold), Parcels III through IX and XI through XII (easement) as set forth in Loan Policy Number 27-041-92-243358	1275 Primm Blvd., Primm, Clark County, Nevada 89019	Reliant Energy Wholesale Generation, LLC
3. Choctaw	Tracts 1 and 3 through 8 (fee) and Tract 2 (easement) as set forth in Loan Policy Number G-47-1007534	91 Hwy. 407, West French Camp, Choctaw County, Mississippi 39745	Reliant Energy Wholesale Generation, LLC
4. Coolwater	Parcel A (fee) and Parcels B through G (easement) as set forth in Loan Policy Number 27-041-92-243362	37000 East Santa Fe Street, Daggett, San Bernardino County, California 92327	Reliant Energy Coolwater, Inc.
5. Ellwood	Parcels One through Three (fee) and Parcel Four (easement) as set forth in Loan Policy Number 27-041-92-243351	30 Las Armas Road, Goleta, Santa Barbara County, California 90117	Reliant Energy Ellwood, Inc.
6. Etiwanda	Parcel One (fee) and Parcels Two and Three (easement) as set forth in Loan Policy Number 27-041-92-243364	8996 Etiwanda Ave., Rancho Cucamonga, San Bernardino County, California 91739	Reliant Energy Etiwanda, Inc.
7. Hunterstown	Parcels “First Described” and “Second Described” (fee) as set forth in Loan Policy Number G47-1651038	1731 Hunterstown Road, Gettysburg (Straban Township), Adams County, Pennsylvania 17325	Reliant Energy Wholesale Generation, LLC

	Owned
Project	Real Property Assets*	Location	Owner
8. Indian River	Parcels 1A, 2A, and 2B (fee) and Parcel 3 (easement) as set forth in Loan Policy Number 5482-255764	7800 South US Highway 1, Titusville, Brevard County, Florida 32780	Reliant Energy Florida, LLC
9. Mandalay	Parcel 1 (fee), Parcels 2 and 3 (easement), and Parcels 4 through 11 (leasehold) as set forth in Loan Policy Number 27-041-92-243353	393 North Harbor Blvd., Oxnard, Ventura County, California 93035	Reliant Energy Mandalay, Inc.
10. Ormond Beach	Parcel 1 (fee) and Parcel 2 (easement) as set forth in Loan Policy Number 27-041-92-243360	6635 South Edison Drive, Oxnard, Ventura County, California 93033	Reliant Energy Ormond Beach, Inc.
11. Osceola	Parcel 1 (fee) and Parcel 2 (easement) as set forth in Loan Policy Number 5482-255762	5200 W. Hollopaw Road, St. Cloud, Osceola County, Florida 34773-8461	Reliant Energy Florida, LLC
12. Seward	Parcels “First Described” and “Second Described” (fee) as set forth in Loan Policy Number G47-1651037	595 Plant Road, New Florence (East Wheatfield Township), Indiana County, Pennsylvania 15944	Reliant Energy Seward, LLC
13. Shelby	Parcel 1 (fee) and Parcels 2 through 15 (easement) as set forth in Loan Policy Number 26-041-92-198630	344A Rural Route 1, Centerline Road, Neoga, Shelby County, Illinois 62447	Reliant Energy Wholesale Generation, LLC

* All Loan Policies referenced in this Schedule 5.8(c) are as modified as of December, 2004, as of October, 2005 and as of December 2006.

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SCHEDULE 5.9(c)
ENVIRONMENTAL MATTERS

NONE

SCHEDULE 5.13
SUBSIDIARIES AND OTHER EQUITY INVESTMENTS

Part (a)

See attached organizational chart.

Part (b)

	Jurisdiction of	Organizational/Taxpayer
	Organization	Identification Number
Reliant Energy, Inc.	Delaware	3271860/76-0655566
Reliant Energy Asset Management, LLC	Delaware	3493739/46-0471966
Reliant Energy Broadband, Inc.	Delaware	3268583/76-0655569
Reliant Energy California Holdings, LLC	Delaware	2867853/76-0566778
Reliant Energy CapTrades Holding Corp.	Delaware	3027328/51-0389078
Reliant Energy Communications, Inc.	Delaware	3059688/76-0616444
Reliant Energy Coolwater, Inc.	Delaware	2814636/76-0555457
Reliant Energy Corporate Services, LLC	Delaware	3667453/56-2368220
Reliant Energy Electric Solutions, LLC	Delaware	3476881/69-0007344
Reliant Energy Ellwood, Inc.	Delaware	2825383/76-0555453
Reliant Energy Etiwanda, Inc.	Delaware	2824243/76-0555456
Reliant Energy Florida, LLC	Delaware	3602852/74-2931711
Reliant Energy Key/Con Fuels, LLC	Delaware	3304223/76-0664189
Reliant Energy Mandalay, Inc.	Delaware	2824247/76-0555455
Reliant Energy Northeast Generation, Inc.	Delaware	3202113/76-0639817
Reliant Energy Northeast Holdings, Inc.	Delaware	3202371/51-0399148
Reliant Energy Ormond Beach, Inc.	Delaware	2889806/76-0573510
Reliant Energy Power Generation, Inc.	Delaware	2608628/76-0530625
Reliant Energy Sabine (Delaware), Inc.	Delaware	2822610/52-2067701
Reliant Energy Sabine (Texas), Inc.	Delaware	2822615/76-0555452
Reliant Energy Services Desert Basin, LLC	Delaware	3081690/76-0625991
Reliant Energy Services Mid-Stream, LLC	Delaware	3161524/76-0637432
Reliant Energy Services, Inc.	Delaware	2222789/72-1183055
Reliant Energy Seward, LLC	Delaware	3024328/76-0656057
Reliant Energy Solutions East, LLC	Delaware	3487883/46-0471983
Reliant Energy Trading Exchange, Inc.	Delaware	3213568/76-0642320
Reliant Energy Ventures, Inc.	Delaware	2320013/76-0387091
Reliant Energy Wholesale Generation, LLC	Delaware	3811728/20-1253947

Address of principal place of business for all Loan Parties:

1000 Main Street
Houston, Texas 77002

SCHEDULE 5.17

INTELLECTUAL PROPERTY MATTERS

NONE

SCHEDULE 7.3(vii)

LIST OF AGREEMENTS PROHIBITING SUBORDINATION
OF INTERCOMPANY INDEBTEDNESS

1. Participation Agreement dated August 24, 2000, among Conemaugh Lessor Genco LLC, as Owner Lessor, Reliant Energy Mid-Atlantic Power Holdings, LLC, as Facility Lessee, Wilmington Trust Company, as Lessor Manager, PSEGR Conemaugh Generation, LLC, as Owner Participant, Bankers Trust Company, as Lease Indenture Trustee and Pass Through Trustee, as amended to the date hereof, and any “Operative Documents” as defined therein or executed pursuant thereto

2. Participation Agreement dated as of August 24, 2000, among Keystone Lessor Genco LLC, as Owner Lessor, Reliant Energy Mid-Atlantic Power Holdings, LLC, as Facility Lessee, Wilmington Trust Company, as Lessor Manager, PSEGR Keystone Generation, LLC, as Owner Participant, Bankers Trust Company, as Lease Indenture Trustee and as Pass Through Trustee, as amended to the date hereof, and any “Operative Documents” as defined therein or executed pursuant thereto

3. Participation Agreement dated August 24, 2000 among Shawville Lessor Genco LLC, as Owner Lessor, Reliant Energy Mid-Atlantic Power Holdings, LLC, a Facility Lessee, Wilmington Trust Company, as Lessor Manager, PSEGR Shawville Generation, LLC, as Owner Participant, Bankers Trust Company, as Lease Indenture Trustee and as Pass Through Trustee, as amended to the date hereof, and any “Operative Documents” as defined therein or executed pursuant thereto

4. Credit Agreement dated as of December 15, 1999 by and among Reliant Energy Channelview LP, the lenders named on the signature pages thereto, Bank of America, N.A., as Administrative Agent and as Collateral Agent, and Teachers Insurance and Annuity of America, as Institutional Agent, as amended to the date hereof, and any “Loan

5. 12% Note Indenture dated as of April 27, 2000 between Orion Power Holdings, Inc. and Wilmington Trust Company, and any “Notes” as defined therein or executed pursuant thereto

6. Amended and Restated Working Capital Facility dated as of December 1, 2006 by and among Reliant Energy Power Supply, LLC, the Guarantors party thereto, and Merrill Lynch Capital Corporation, as Lender, as amended to the date hereof, and any “Transaction Documents” as defined therein or executed pursuant thereto

7. Amended and Restated Credit Sleeve and Reimbursement Agreement dated as of December 1, 2006, by and among Reliant Energy Power Supply, the Other Reliant Retail Obligors referred to herein, as Reimbursement Guarantors, Merrill Lynch Commodities, Inc., as Sleeve Provider, and Merrill Lynch & Co., Inc., as ML Guarantee Provider, as amended to the date hereof, and any “Transaction Documents” as defined therein or executed pursuant thereto

SCHEDULE 10.10(e)

1. Collateral Trust Agreement (Separate Collateral) dated as of June 12, 2007 among the Borrower, the Guarantors and U.S. Bank National Association, as Collateral Trustee (in such capacity, the “Separate Collateral Trustee”), and acknowledged by Wilmington Trust Company, as Trustee under each of the Indentures, and Deutsche Bank AG New York Branch, as Collateral Trustee Agent (in such capacity, the “Separate Collateral Trustee Agent”)

2. Collateral Trust Agreement (Shared Collateral) dated as of June 12, 2007, among the Borrower, the Guarantors and U.S. Bank National Association, as Collateral Trustee (in such capacity, the “Shared Collateral Trustee”)

3. Assignment and Assumption Agreement dated as of June 12, 2007 between the Separate Collateral Trustee and the Shared Collateral Trustee

4. Second Amended and Restated Security Agreement (Separate Collateral) dated as of June 12, 2007 among the Borrower, the Guarantors and the Separate Collateral Trustee, and acknowledged and agreed to by the Separate Collateral Trustee Agent

5. Second Amended and Restated Security Agreement (Shared Collateral) dated as of June 12, 2007 among the Borrower, the Guarantors and the Shared Collateral Trustee.

6. Termination and Release Agreement dated as of June 12, 2007, among the Borrower, U.S. Bank National Association, as Collateral Trustee, Bank of America, N.A., as Collateral Trustee Agent, and Mellon Financial Markets, LLC (regarding the termination of the Securities Account Control Agreement dated as of March 1, 2005 among such parties

7. Securities Account Control Agreement dated as of June 12, 2007, among the Borrower, the Shared Collateral Trustee, Deutsche Bank AG New York Branch, as Collateral Trustee Agent (the “Shared Collateral Trustee Agent”), and Mellon Bank, N.A., as the Securities Intermediary

8. Termination and Release Agreement dated as of June 12, 2007, among the Borrower and the other Loan Parties named therein and parties thereto, U.S. Bank National Association, as Collateral Trustee, Bank of America, N.A., as Collateral Trustee Agent, and Mellon Bank, N.A., regarding the blocked accounts described therein

9. Blocked Account Agreement, dated as of June 12, 2007, among the Borrower and the other Loan Parties named therein and parties thereto, Mellon Bank, N.A., the Shared Collateral Trustee, and the Shared Collateral Trustee Agent

10. Acceptance of Resignation Letter from Bank of America, N.A., as collateral agent

11. Mortgage Supplements

12. Security Agreement dated as of June 12, 2007 among the Borrrower, the other Loan Parties, and Deutsche Bank, as Collateral Agent

SCHEDULE 11.2

ADMINISTRATIVE AGENT’S OFFICE;
CERTAIN ADDRESSES FOR NOTICES

NOTICE ADDRESS FOR BORROWER:

Reliant Energy, Inc.
1000 Main Street
Houston, TX 77002
Facsimile No.:	(713) 497-0881
Attention:	Andrew C. Johannesen
Copy to:	Michael L. Jines

NOTICE ADDRESS FOR ADMINISTRATIVE AGENT:

Deutsche Bank AG, New York Branch
100 Plaza One, 8th Floor
Jersey City, NJ 07311-3901

Attention:	Helaine Griffin-Williams
Telephone No.:	(201) 593-2172
Facsimile No.:	(201) 593-2309
Electronic Mail:	helaine.griffin-williams@db.com

Copy to:
Deutsche Bank AG, New York Branch
60 Wall Street, 44th Floor
New York, NY 10005-2836

Attention:	Marcus Tarkington
Telephone No.:	(212) 250-6153
Facsimile No.:	(212) 797-0070
Electronic Mail:	marcus.tarkington@db.com

NOTICE ADDRESS FOR DEUTSCHE BANK AG AS L/C ISSUER:

Deutsche Bank AG, New York Branch
Global Transaction Banking — Trade Finance
60 Wall Street, 25th Floor
New York, NY 10005-2836

Attention:	Deepak K. Menghrajani
Telephone:	(212) 250-7376
Electronic Mail:	deepak.menghrajani@db.com

EXHIBIT A

[FORM OF] BORROWING NOTICE

[Date]¹

To: DEUTSCHE BANK AG NEW YORK BRANCH, as Administrative Agent

Ladies and Gentlemen:

     Reference is made to that certain Credit and Guaranty Agreement, dated as of June 12, 2007 (as such agreement may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among (i) Reliant Energy, Inc., a Delaware corporation (the “Borrower”); (ii) the other Loan Parties referred to therein, as Guarantors; (iii) the Lenders referred to therein; and (iv) Deutsche Bank AG New York Branch, as Administrative Agent. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Credit Agreement.

     The undersigned hereby requests a Borrowing of [Revolving Credit Loans] or [Term Loans]:²

1.	On                                                             .3
2.	In the amount of $                                                             .4
3.	Comprised of                                                              [Base Rate Loans or Eurodollar Rate Loans].
4.	[If Eurodollar Rate Loans are being requested] [For an Interest Period of                      months [one, two, three, six, nine, or, if available, twelve months].]

     The foregoing request complies with the requirements of Article II of the Credit Agreement. The undersigned hereby certifies that the following statements are true and correct on the date hereof, and will be true and correct on the date of receipt of the proceeds of the applicable Borrowing requested herein (both before and after giving effect to the applicable Borrowing):

1	Notice must be received by the Administrative Agent not later than 11:00 a.m. (New York time), (i) in the case of Base Rate Loans, on the Business Day on which such Loan is to be made and (ii) in the case of Eurodollar Rate Loans, on the third Business Day preceding the date on which such Loan is to be made.
2	State whether such Term Loan is a Pre-Funded L/C Term Loan or an Incremental Term Loan.
3	Such day must be a Business Day.
4	The aggregate principal amount of Loans of a particular Type requested pursuant to this Notice shall be in a minimum amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof, unless such amount is borrowed pursuant to Section 2.3(c) of the Credit Agreement.

(a)	the representations and warranties set forth in Article V of the Credit Agreement, in the other Loan Documents, or in any certificate or other document furnished by, or on behalf of, a Loan Party pursuant to, or in connection with, the Credit Agreement or any other Loan Document, are true and correct in all material respects (except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties are true and correct in all material respects as of such earlier date); provided, that representations and warranties which have Material Adverse Effect qualifiers are true and correct in all respects to the extent that such Material Adverse Effect qualifier is applicable thereto;
(b)	no Default has occurred, and no Default will occur by reason of the making of the [Revolving Credit Loan] or [Term Loan] requested herein; and
(c)	[in the case of a Revolving Credit Loan] [in the case of a Term Loan] the proceeds of the requested Borrowing are being used as provided in Section 6.10 of the Credit Agreement.
(d)	in the case of the incurrence of Pre-Funded L/C Term Loans, the conditions set forth in Section 2.3(c)(i)(B) or Section 2.5(d), as applicable, have been satisfied.

     [For any Borrowing of Revolving Credit Loans] [The undersigned hereby further certifies that on the date hereof, and after giving effect to the Revolving Credit Borrowing hereunder, the Borrower will be in compliance with the proviso to Section 2.1(b) of the Credit Agreement.]

A-2
Form of Borrowing Notice

     IN WITNESS WHEREOF, the undersigned has caused this certificate to be executed on this ___ day of ___, 20___.

RELIANT ENERGY, INC.
By:
	Name:
	Title:

A-3
Form of Borrowing Notice

EXHIBIT B

[FORM OF] L/C CERTIFICATE

To: DEUTSCHE BANK AG NEW YORK BRANCH, as Administrative Agent
[Insert the name of the L/C Issuer from whom the Borrower or the applicable Loan Party is requesting that a Letter of Credit be issued]

[Date]¹

Ladies and Gentlemen:

     Reference is made to that certain Credit and Guaranty Agreement, dated as of June 12, 2007 (as such agreement may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among (i) Reliant Energy, Inc., a Delaware corporation (the “Borrower”); (ii) the other Loan Parties referred to therein, as Guarantors; (iii) the Lenders referred to therein; and (iv) Deutsche Bank AG New York Branch, as Administrative Agent. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Credit Agreement.

     The undersigned hereby requests the issuance, amendment, renewal or extension (as applicable) of a Letter of Credit:

1.	Proposed date of issuance, amendment, renewal or extension of such [Revolving L/C] [Pre-Funded L/C]:                                  .2
2.	For the issuance of a new Letter of Credit:

(a)	Face amount of such Letter of Credit:
(b)	Expiration date of such Letter of Credit.
(c)	Name and address of the beneficiary of such Letter of Credit:

3. For the amendment, renewal or extension of a Letter of Credit: A description of the Letter of Credit, amendment, renewal or extension (as applicable) being requested is as follows:

1	To be delivered by 3:00 p.m. (New York time) at least two (2) Business Days prior to the proposed date of issuance, amendment, renewal or extension.
2	Must be a Business Day.

B-1
Form of L/C Certificate

4.	Any other information as shall be necessary to prepare, amend, renew or extend the applicable Letter of Credit is as set forth below:
5.	The full text of any certificate to be presented by the beneficiary in case of any drawing thereunder is as follows:

     [The following language is to be included for any issuance of a Letter of Credit, or to amend an outstanding Letter of Credit to increase the face amount thereof] The undersigned hereby certifies that the following statements are true and correct on the date hereof and will be true and correct on the proposed date of issuance or amendment (as applicable) of the Letter of Credit, both before and after giving effect to such issuance or amendment (as applicable):

(a)	the representations and warranties set forth in Article V of the Credit Agreement, in the other Loan Documents, or in any certificate or other document furnished by, or on behalf of, a Loan Party pursuant to, or in connection with, the Credit Agreement or any other Loan Document, are true and correct in all material respects (except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties are true and correct in all material respects as of such earlier date); provided, that representations and warranties which have Material Adverse Effect qualifiers are true and correct in all respects to the extent that such Material Adverse Effect qualifier is applicable thereto;
(b)	no Default has occurred, and no Default will occur by reason of the making of the issuance or amendment of the Letter of Credit requested herein;
(c)	[(i) the sum of the aggregate Total Revolving Credit Outstandings (including L/C Exposure attributable to the Letter of Credit to be issued or amended (as applicable) as requested herein) does not exceed the current amount of the aggregate Revolving Credit Commitments.]
	[(i) the sum of the aggregate Pre-Funded Letter of Credit Obligations (including L/C Exposure attributable to the Letter of Credit to be issued or amended (as applicable) as requested herein) does not exceed the current amount of the aggregate Pre-Funded L/C Commitments.]

B-2
Form of L/C Certificate

     IN WITNESS WHEREOF, the undersigned has caused this certificate to be executed this ___ day of ___, 20[___].

RELIANT ENERGY, INC.
By:
	Name:
	Title:

B-3
Form of L/C Certificate

EXHIBIT C

[FORM OF] CONVERSION/CONTINUATION NOTICE

[Date]¹

To: DEUTSCHE BANK AG NEW YORK BRANCH, as Administrative Agent

Ladies and Gentlemen:

     Reference is made to that certain Credit and Guaranty Agreement, dated as of June 12, 2007 (as such agreement may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among (i) Reliant Energy, Inc., a Delaware corporation (the “Borrower”); (ii) the other Loan Parties referred to therein, as Guarantors; (iii) the Lenders referred to therein; and (iv) Deutsche Bank AG New York Branch, as Administrative Agent. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Credit Agreement.

     The undersigned hereby requests the following conversion or continuation of a Loan:

1.	Check one: Conversion                      or Continuation                     .
2.	Description of the Loan to be converted or continued:
3.	Principal amount of the Loan (or the portion thereof) to be converted or continued:                                         2
4.	Date of conversion, or last day of applicable Interest Period (as applicable):
5.	For conversion of a Base Rate Loan to a Eurodollar Rate Loan, or continuation of a Eurodollar Rate Loan for a successive Interest Period, Interest Period selected, (i.e., one, two, three, six, nine or, if available, twelve months), and the last day thereof3:

1	Must be received not later than 11:00 a.m. (New York time), at least three (3) Business Days prior to any conversion or continuation.
2	The aggregate principal amount of Loans of a particular type continued as, or converted to, Eurodollar Rate Loans or Base Rate Loans, as applicable, as part of the same continuation or conversion, shall be in a minimum amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof.
3	Subject to the provisions contained in the definition of “Interest Period” in Article I of the Credit Agreement.

C-1
Form of Continuation/Conversion Notice

     The undersigned hereby represents and warrants that the following statement is true and correct on the date hereof, and will be true and correct on the date of the conversion or continuation (as applicable) requested herein, both before and after giving effect to such conversion or continuation:

(a) no Event of Default has occurred and is then continuing at the time of any conversion to a Eurodollar Rate Loan, or any continuation of a Eurodollar Rate Loan into a subsequent Interest Period.

          IN WITNESS WHEREOF, the undersigned has caused this certificate to be executed this ___ day of ___, 20___.

RELIANT ENERGY, INC.
By:
	Name:
	Title:

C-2
Form of Continuation/Conversion Notice

EXHIBIT D

[FORM OF] REVOLVING CREDIT NOTE

REVOLVING CREDIT NOTE

$	New York, New York
	as of

     FOR VALUE RECEIVED, RELIANT ENERGY, INC., a Delaware corporation (together with its successors, the “Borrower”), DOES HEREBY PROMISE TO PAY to the order of [INSERT NAME OF LENDER] (the “Lender”) at the office of Deutsche Bank AG New York Branch, 60 Wall Street, MS NYC60-4305, New York, NY 10005-2858, in lawful money of the United States of America in immediately available funds, the principal amount of ___ Dollars ($ ___), or the aggregate unpaid principal amount of all Revolving Credit Loans (as defined in the Credit Agreement referred to below) made by the Lender to the Borrower pursuant to said Credit Agreement, whichever is less, on such date or dates as is required by said Credit Agreement, and to pay interest on the unpaid principal amount from time to time outstanding hereunder, in like money, at such office, at such rates and at such times as set forth in said Credit Agreement.

     The Borrower and any and all sureties, guarantors and endorsers of this Note and all other parties now or hereafter liable hereon severally waive demand, presentment for payment, protest, notice of any kind (including, but not limited to, notice of dishonor, notice of protest, notice of intention to accelerate or notice of acceleration, but excluding any notice expressly required by the terms of the Credit Agreement) and diligence in collecting and bringing suit against any party hereto and agree to the extent permitted by applicable law (i) to all extensions and partial payments, with or without notice, before or after maturity, (ii) to any substitution, exchange or release of any security now or hereafter given for this Note, (iii) to the release of any party primarily or secondarily liable hereon, and (iv) that it will not be necessary for any holder of this Note, in order to enforce payment of this Note, to first institute or exhaust such holder’s remedies against the Borrower or any other party liable hereon or against any security for this Note. The nonexercise by the holder of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.

     This Note is one of the promissory notes referred to in that certain Credit and Guaranty Agreement, dated as of June 12, 2007 (as such agreement may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among (i) Reliant Energy, Inc., a Delaware corporation (the “Borrower”); (ii) the other Loan Parties referred to therein, as Guarantors; (iii) the Lenders referred to therein; and (iv) Deutsche Bank AG New York Branch, as Administrative Agent (capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Credit Agreement), and is entitled to the benefits of and is subject to all the terms and provisions of the Credit Agreement which, among other things, contains provisions for optional and mandatory prepayment and for acceleration of the maturity hereof upon the occurrence of certain events, all as provided in the Credit Agreement. This Note is also secured by the Liens granted in the Loan Documents and is entitled to the benefits of all the terms and provisions of the Loan Documents.

EXHIBIT D

     THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

RELIANT ENERGY, INC.

By:

Name:

Title:

REVOLVING CREDIT NOTE

[LAST PAGE OF NOTE]

				Unpaid	Name of
	Amount of			Principal	Person
	Revolving	Principal	Interest	Balance of	Making
Date	Credit Loan	Payments	Payments	Note	Notation

[W & C (New York) Draft: March 1, 2007]

EXHIBIT D-2

[FORM OF] TERM NOTE

TERM NOTE

$	New York, New York
	as of

     FOR VALUE RECEIVED, RELIANT ENERGY, INC., a Delaware corporation (together with its successors, the “Borrower”), DOES HEREBY PROMISE TO PAY to the order of [INSERT NAME OF LENDER] (the “Lender”) at the office of Deutsche Bank AG New York Branch, 60 Wall Street, MS NYC60-4305, New York, NY 10005-2858, in lawful money of the United States of America in immediately available funds, the principal amount of ___ Dollars ($ ___), or the aggregate unpaid principal amount of all Term Loans (as defined in the Credit Agreement referred to below) made by the Lender to the Borrower pursuant to said Credit Agreement, whichever is less, on such date or dates as is required by said Credit Agreement, and to pay interest on the unpaid principal amount from time to time outstanding hereunder, in like money, at such office, at such rates and at such times as set forth in said Credit Agreement.

     The Borrower and any and all sureties, guarantors and endorsers of this Note and all other parties now or hereafter liable hereon severally waive demand, presentment for payment, protest, notice of any kind (including, but not limited to, notice of dishonor, notice of protest, notice of intention to accelerate or notice of acceleration, but excluding any notice expressly required by the terms of the Credit Agreement) and diligence in collecting and bringing suit against any party hereto and agree to the extent permitted by applicable law (i) to all extensions and partial payments, with or without notice, before or after maturity, (ii) to any substitution, exchange or release of any security now or hereafter given for this Note, (iii) to the release of any party primarily or secondarily liable hereon, and (iv) that it will not be necessary for any holder of this Note, in order to enforce payment of this Note, to first institute or exhaust such holder’s remedies against the Borrower or any other party liable hereon or against any security for this Note. The nonexercise by the holder of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.

     This Note is one of the promissory notes referred to in that certain Credit and Guaranty Agreement, dated as of March [16], 2007 (as such agreement may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among (i) Reliant Energy, Inc., a Delaware corporation (the “Borrower”); (ii) the other Loan Parties referred to therein, as Guarantors; (iii) the Lenders referred to therein; and (iv) Deutsche Bank AG New York Branch, as Administrative Agent (capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Credit Agreement), and is entitled to the benefits of and is subject to all the terms and provisions of the Credit Agreement which, among other things, contains provisions for optional and mandatory prepayment and for acceleration of the maturity hereof upon the occurrence of certain events, all as provided in the Credit Agreement.

This Note is also secured by the Liens granted in the Loan Documents and is entitled to the benefits of all the terms and provisions of the Loan Documents.

2

     THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

RELIANT ENERGY, INC.
By:
	Name:
	Title:

TERM NOTE

[LAST PAGE OF NOTE]

				Unpaid
				Principal	Name of
	Amount of	Principal	Interest	Balance	Person Making
Date	Term Loan	Payments	Payments	of Note	Notation

EXHIBIT E

[Form of] Compliance Certificate

THE UNDERSIGNED HEREBY CERTIFIES THAT:

     1. I am a duly elected Responsible Officer of Reliant Energy, Inc., a Delaware corporation (“REI”);

     2. I have reviewed the terms of that certain Credit and Guaranty Agreement, dated as of June 12, 2007 (as such agreement may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among (i) Reliant Energy, Inc., a Delaware corporation (the “Borrower”); (ii) the other Loan Parties referred to therein, as Guarantors; (iii) the Lenders referred to therein; and (iv) Deutsche Bank AG, New York Branch, as Administrative Agent (capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Credit Agreement); and I (or employees under my supervision) have conducted, in reasonable detail, a review of the transactions and condition of REI and its Subsidiaries during the accounting period covered by the attached financial statements.

     3. The review described in paragraph 2 above did not disclose the existence of any condition or event which would constitute a Default or Event of Default existing at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate; and as of the date of this Certificate, I have no knowledge of any condition or event which would constitute a Default or Event of Default, except as set forth below:

     [Describe below (or in a separate attachment to this Certificate) the exceptions, if any, to paragraph (3) above by listing, in reasonable detail, the nature of each condition or event, the period during which it has existed and any action which REI or any other Loan Party has taken, is taking or proposes to take, with respect to each such condition or event.]

;  [and]

     4. [Attached hereto as Annex 1 are the calculations with respect to the financial covenant set forth in Section 7.11 of the Credit Agreement demonstrating REI’s performance with respect thereto for the periods covered thereby]; [and]

     [4.][5.] Set forth below (or in a separate attachment to this Certificate) is a reconciliation, if any, required under Section 1.3 of the Credit Agreement between the calculations of any financial ratio or requirement under Sections 7.11 of the Credit Agreement made in accordance with GAAP before giving effect to any change in GAAP that would affect the computation of such ratio or requirement and after giving effect to any such changes in GAAP.

     The foregoing certifications, together with the calculations and analyses set forth in the Annexes and any other attachments hereto, and the financial statements delivered with this Certificate in support hereof, are made and delivered this ___ day of                                   , 20___ pursuant to clause (a) of Section 6.2 of the Credit Agreement.

RELIANT ENERGY, INC.
By:
	Name:
	Title:

Dated as of                                   , 20___

E-2
Form of Compliance Certificate

EXHIBIT F

[FORM OF] ASSIGNMENT AND ASSUMPTION

Dated                     , 20__

     Reference is made to that certain Credit and Guaranty Agreement, dated as of June 12, 2007 (as such agreement may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among (i) Reliant Energy, Inc., a Delaware corporation (the “Borrower”); (ii) the other Loan Parties referred to therein, as Guarantors; (iii) the Lenders referred to therein; and (iv) Deutsche Bank AG New York Branch, as Administrative Agent. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Credit Agreement; receipt of a copy of which is hereby acknowledged by the Assignee.

     This Assignment and Assumption is between the Assignor and the Assignee (as each is set forth on Schedule I hereto and made a part hereof). The Assignor and the Assignee agree as follows:

     1. For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee without recourse to the Assignor, and the Assignee hereby irrevocably purchases and assumes from the Assignor without recourse to the Assignor, subject to and in accordance with the Credit Agreement, as of the Effective Date (as set forth on Schedule I hereto), an undivided interest (the “Assigned Interest”) in and to all of the Assignor’s interests, rights and obligations under the Credit Agreement as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto as are set forth on Schedule I hereto, in the principal amount as set forth on Schedule I hereto; provided, however, that it is expressly understood and agreed that (a) the Assignor is not assigning to the Assignee and the Assignor shall retain (i) all of the Assignor’s rights under Sections 3.1, 3.4 and 3.5 of the Credit Agreement with respect to any cost, reduction or payment incurred or made prior to the Effective Date and (ii) any and all amounts paid to the Assignor prior to the Effective Date; and (b) both Assignor and Assignee shall be entitled to the benefits of Section 11.4 of the Credit Agreement.

     2. The Assignor (a) makes no representations or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement, any of the other Loan Document or any other instrument or document furnished pursuant thereto, other than the representation and warranty that (i) it is the legal and beneficial owner of the interest being assigned by it hereby and that such interest is free and clear of any adverse claim and (ii) the restrictions set forth in Section 11.6 pertaining to the minimum amount of any assignment have been satisfied; (b) makes no representation or warranty and assumes no responsibility with respect to the financial condition of any of the Loan Parties or the performance or observance by any of the Loan Parties of any of their respective obligations under the Loan Documents or any other instrument or document furnished pursuant thereto; and (c) requests that the Administrative Agent evidence the Assigned Interest by recording the information contained on Schedule I in

the Register which reflects the assignment being made hereby (and after giving effect to any other assignments which have become effective on the Effective Date).

     3. The Assignee (a) represents and warrants that it is legally authorized to enter into this Assignment and Assumption, that it is an Eligible Assignee, and in the ordinary course of its business, does not own and/or operate power generating facilities; (b) confirms that it has received copies of the most recent financial statements delivered pursuant to Sections 6.1(a) and 6.1(b) of the Credit Agreement (or if none of such financial statements shall have theretofore been delivered, copies of the financial statements referred to in Sections 5.5(a) and 5.5(b) of the Credit Agreement) and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption; (c) agrees that it will, independently and without reliance upon the Assignor, the Administrative Agent, the other Agents, the L/C Issuers, any other Lender or any other Secured Party and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement, any of the other Loan Documents or any other instrument or document furnished pursuant thereto; (d) appoints and authorizes the Administrative Agent, the Collateral Agent and each L/C Issuer (as applicable) to take such action as agent(s) on its behalf and to exercise such powers under the Credit Agreement and the other Loan Documents as are delegated to the Administrative Agent, the Collateral Agent or such L/C Issuer (as applicable) by the terms thereof, together with such powers as are reasonably incidental thereto; (e) agrees that it will be bound by the provisions of the Credit Agreement and the other Loan Documents and will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement and the other Loan Documents are required to be performed by it as a Lender; (f) if the Assignee is not organized under the laws of the United States or a state thereof, attaches the forms prescribed by the IRS certifying as to the Assignee’s exemption from United States withholding taxes with respect to all payments to be made to the Assignee under the Credit Agreement, or such other documents as are necessary to indicate that all such payments are subject to such tax at a rate reduced by any applicable tax treaty and delivers copies thereof to the Borrower in accordance with Section 11.6 of the Credit Agreement; and (g) if the Assignee is not a Lender, has supplied the information requested on the administrative questionnaire attached hereto as Exhibit A.

     4. The effective date for this Assignment and Assumption shall be the assignment effective date as described in Schedule I hereto (the “Effective Date”), which effective date shall not (unless otherwise agreed to by the Administrative Agent) be earlier than five (5) Business Days after the date of acceptance and recording by the Administrative Agent. Following the execution of this Assignment and Assumption by the Assignee and the Assignor, it will be delivered (together with the processing and recordation fee of $3,500 to be paid by the Assignor or the Assignee to the Administrative Agent and the Assignor’s original Notes (if any) evidencing the applicable Commitment being assigned) to the Administrative Agent for the consent of those Persons required pursuant to Section 11.6 of the Credit Agreement and for acceptance and recording by the Administrative Agent pursuant to Section 11.6 of the Credit Agreement.¹

¹ Any assignment of a Commitment and/or any obligations with respect to any Letter of Credit shall require the prior written consent of (i) the Administrative Agent and each L/C Issuer and in the case of assignments at Pre-Funded L/C Commitments only, the Pre-Funded L/C Agent, which consent in each case shall not be unreasonably withheld or delayed.

F-2
Form of Assignment and Assumption

     5. Upon such consents, acceptance and recording, and from and after the Effective Date, (a) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Assumption, have the rights and obligations of a Lender thereunder and under the other Loan Documents and shall be bound by the provisions thereof, and (b) the Assignor shall, to the extent provided in this Assignment and Assumption, relinquish its rights and be released from its obligations under the Credit Agreement and the other Loan Documents (and if this Assignment and Assumption covers all of the remaining portion of the Assignor’s rights and obligations under the Credit Agreement, the Assignor shall cease to be a party thereto).

     6. Upon the acceptance and recording by the Administrative Agent, and from and after the Effective Date, the Administrative Agent shall make all payments in respect of the interest assigned hereby (including payments of principal, interest, fees and other amounts) to the Assignee whether such amounts have accrued prior to the Effective Date or accrue subsequent to the Effective Date. The Assignor and Assignee shall make all appropriate adjustments in payments made by the Administrative Agent for periods prior to the Effective Date or with respect to the making of this assignment directly between themselves.

     7. THIS ASSIGNMENT AND ASSUMPTION SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES).

     8. This Assignment and Assumption may be executed in counterparts, each of which shall be deemed to constitute an original, but all of which when taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by facsimile shall be as effective as delivery of a manually executed counterpart of this Assignment and Assumption.

          IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Assumption to be duly executed by their respective duly authorized officers on Schedule I hereto.

F-3
Form of Assignment and Assumption

SCHEDULE I

     Schedule I to the Assignment and Assumption, dated as of [___,___], respecting that certain Credit and Guaranty Agreement, dated as of June [12], 2007 (as such agreement may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among (i) Reliant Energy, Inc., a Delaware corporation (the “Borrower”); (ii) the other Loan Parties referred to therein, as Guarantors; (iii) the Lenders referred to therein; and (iv) Deutsche Bank AG New York Branch, as Administrative Agent. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Credit Agreement.

Legal Name of Assignor:
Legal Name of Assignee:
Assignment Effective Date:	2

Principal Term Loan Amount Assigned		$                    3
Principal Revolving Credit Commitment Amount Assigned	$                    (See footnote 3)
Principal Pre-Funded L/C Commitment Amount Assignment	$                    (See footnote 3)

2

Unless otherwise agreed to by the Administrative Agent, cannot be earlier than five (5) Business Days after the date of acceptance and recording by the Administrative Agent.

3

Pursuant to Section 11.6(b) of the Credit Agreement, each assignment must be in a minimum amount of $1,000,000 with respect to Term Loans, if any, and Pre-Funded L/C Commitments and $10,000,000 with respect to Revolving Credit Commitments, or such lesser amount (1) as shall equal the Assignor’s entire Revolving Credit Commitment, Term Loans, if any, or Pre-Funded L/C Commitments (as applicable) or (2) as may be agreed to by the Administrative Agent, so long as no Event of Default has occurred and is continuing, the Borrower (each such consent not to be unreasonably withheld or delayed).

F-4
Form of Assignment and Assumption

[NAME OF ASSIGNOR]
By:
	Name:
	Title:
[NAME OF ASSIGNEE]
By:
	Name:
	Title:

[CONSENTED AND4 ACCEPTED] TO:
DEUTSCHE BANK AG NEW YORK
BRANCH, as Administrative Agent
By:
	Name:
	Title:
[Each L/C Issuer]5
[RELIANT ENERGY, INC. 6
By:
	Name:
	Title:]

4	To be added only if consent of the Administrative Agent is required under Section 11.6 of the Credit Agreement.
5	To be added only if the consent of each L/C Issuer is required under Section 11.6 of the Credit Agreement.
6	Consent of the Borrower not required (i) if an Event of Default has occurred and is continuing or (ii) as otherwise provided in Section 11.6 of the Credit Agreement.

F-5
Form of Assignment and Assumption

EXHIBIT A
to Assignment and Assumption

ADMINISTRATIVE DETAILS REPLY FORM

          Reliant Energy, Inc. CONFIDENTIAL          

FAX ALONG WITH COMMITMENT LETTER TO: [                     ] Fax: [                     ]

I. Borrower Name:	Reliant Energy, Inc.
II. Legal Name of Lender for Signature Page:
III. Name of Lender for any eventual tombstone:
IV. Domestic Address:	V. Eurodollar Address:
VI. Contact Information:

	Credit Contact	Operations Contact	Legal Counsel
Name:
Title:
Address:
Telephone:
Facsimile:
E Mail Address

			Draft Documentation
	Bid Contact	L/C Contact	Contact
Name:
Title:
Address:
Telephone:
Facsimile:
E Mail Address

A-1

ADMINISTRATIVE REPLY FORM

          Reliant Energy, Inc. CONFIDENTIAL          

VII. Lender’s Fed Wire Payment Instructions:

Pay to:
	(Name of Lender)
	(ABA#)	(City/State)
	(Account #)	(Account Name)
	(Attention)

VIII. Lender’s Standby L/C Fed Wire Payment Instructions (if applicable):

Pay to:
	(Name of Lender)
	(ABA#)	(City/State)
	(Account #)	(Account Name)
	(Attention)

IX. Organizational Structure:

Foreign Br., organized under which laws, etc.

Lender’s Tax ID:

Tax withholding Form Attached (For Foreign Buyers)
[___]	Form W-9
[___]	Form W-8
[___]	Form 4224 effective:
[___]	Form 1001
[___]	W/Hold                     % Effective
[___]	Form 4224 on file with Bank of America from previous current years transaction

A-2

ADMINISTRATIVE DETAILS REPLY FORM

          Reliant Energy, Inc. CONFIDENTIAL          

X. Deutsche Bank AG New York Branch’s Payment Instructions:

Servicing Site:	[___]
Pay to:	Deutsche Bank AG New York Branch
	ABA #[                    ]
	Dallas [                    ]
	Acct. #[                    ]
	Attn: [                    ]
	Ref: Reliant Energy, Inc.

XI. Name of Authorized Officer:

Name:

Signature:

Date:

A-3

EXHIBIT G

[FORM OF] INSTRUMENT OF ASSUMPTION AND JOINDER

     INSTRUMENT OF ASSUMPTION AND JOINDER dated as of ___, 20___ (the “Instrument of Assumption and Joinder”) made by [Insert Name of New Loan Party] a [Insert State of Organization] [corporation, limited partnership or limited liability company] (the “Company”) in favor of the lenders (the “Lenders”) referred to in that certain Credit and Guaranty Agreement, dated as of June 12, 2007 (as such agreement may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among (i) Reliant Energy, Inc., a Delaware corporation (the “Borrower”); (ii) the other Loan Parties referred to therein, as Guarantors; (iii) the Lenders referred to therein; and (iv) Deutsche Bank AG New York Branch, as Administrative Agent. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Credit Agreement.

     Reference is hereby made to:

     (a) the Credit Agreement;

     (b) the Security Agreements; and

     [(c) the Contribution Agreement.]

WITNESSETH

     The Company is a [State of Organization] [corporation, limited partnership or limited liability company] and is a Subsidiary of [Name of Loan Party]. [Pursuant to clause (a) of Section 6.11 of the Credit Agreement, the Company is required to execute this document: (i) as a newly formed or acquired Domestic Subsidiary of [Name of Loan Party], which Domestic Subsidiary has either (a) assets with an aggregate book value in excess of $50,000,000 or (b) $25,000,000 or more of Consolidated EBITDA during the four-Fiscal Quarter period most recently ended, (ii) as a Domestic Subsidiary that was formed or acquired after the Closing Date and which did not have either (a) assets with a book value in excess of $50,000,000 or (b) $25,000,000 or more of Consolidated EBITDA during the four-Fiscal Quarter period most recently ended, and has subsequently acquired or otherwise holds assets with a book value in excess of $50,000,000 or has $25,000,000 or more of Consolidated EBITDA during the four-Fiscal Quarter period most recently ended, (iii) as a Domestic Subsidiary that has ceased to be an Excluded Entity or (iv) as a Domestic Subsidiary that has Guaranteed Indebtedness of the Borrower other than the Obligations.] or [The Company is required to execute this document pursuant to Section 6.12(b).]

     NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt of which is hereby acknowledged, the Company hereby agrees as follows:

     1. Guaranty Supplement.

          (a) The Company hereby expressly confirms that it has assumed, and hereby agrees to perform and observe and be bound by, each and every one of the covenants, promises,

G-1
Form of Instrument of Assumption and Joinder

agreements, terms, obligations, duties and liabilities of (i) a Loan Party under the Credit Agreement and each other Loan Document applicable to it as a Loan Party, (ii) a Guarantor under the Credit Agreement and each other Loan Document applicable to it as a Guarantor, (iii) a Grantor (such term being used herein as defined in the Security Agreements) under the Security Agreements [, and (iv) a Contributor (such term being used herein as defined in the Contribution Agreement)] under the Contribution Agreement. By virtue of the foregoing, the Company hereby accepts and assumes any liability of (x) a Loan Party and/or a Guarantor related to each representation, warranty, covenant or obligation made by a Loan Party and/or a Guarantor in the Credit Agreement or any other Loan Document and hereby expressly affirms, as of the date hereof, each of such representations, warranties, covenants and obligations, (y) a Grantor related to each representation, warranty, covenant or obligation made by a Grantor in the Security Agreements, and hereby expressly affirms, as of the date hereof, each of such representations, warranties, covenants and obligations[, and (z) a Contributor related to each covenant or obligation made by a Contributor in the Contribution Agreement and hereby expressly affirms, as of the date hereof, each of such covenants and obligations].

          (b) All references to the term “Loan Party” or “Guarantor” in the Credit Agreement or in any other Loan Document, or in any document or instrument executed and delivered or furnished, or to be executed and delivered or furnished, in connection therewith shall be deemed to be a reference to, and shall include, the Company.

          (c) All references to the term “Grantor” in the Security Agreements or in any document or instrument executed and delivered or furnished, or to be executed and delivered or furnished, in connection therewith shall be deemed to be a reference to, and shall include, the Company.

          [(d) All references to the term “Contributor” in the Contribution Agreement, or in any document or instrument executed and delivered or furnished, or to be executed and delivered or furnished, in connection therewith shall be deemed to be a reference to, and shall include, the Company.]

     2. Representations and Warranties. The Company hereby represents and warrants to the Lenders and the other Secured Parties as follows:

          (a) The Company has the requisite [corporate, partnership or limited liability company] power and authority to enter into this Instrument of Assumption and Joinder and to perform its obligations hereunder and under the Credit Agreement, the Security Agreements [, the Contribution Agreement] and any other Loan Document to which it is a party. The execution, delivery and performance of this Instrument of Assumption and Joinder by the Company and the performance of its obligations under the Credit Agreement, the Security Agreement[, the Contribution Agreement] and any other Loan Document to which it is a party have been duly authorized by the [Board of Directors] of the Company and no other [corporate, partnership or limited liability company] action or proceedings on the part of the Company are necessary to authorize the execution, delivery or performance of this Instrument of Assumption and Joinder, the transactions contemplated hereby or the performance of its obligations under the Credit Agreement, the Security Agreement [, the Contribution Agreement] or any other Loan Document. This Instrument of Assumption and Joinder has been duly

G-2
Form of Instrument of Assumption and Joinder

executed and delivered by the Company. This Instrument of Assumption and Joinder, the Credit Agreement, the Security Agreements [and the Contribution Agreement,] each constitutes the legal, valid and binding obligation of the Company enforceable against it in accordance with its respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally and by general principles of equity, whether such enforceability is considered in a proceeding at law or in equity.

          (b) The representations and warranties set forth in Article 5 of the Credit Agreement, as applicable to Company, are true and correct on and as of the date hereof (except to the extent that such representations and warranties expressly relate to an earlier date) with the same effect as if made on and as of the date hereof.

          (c) The authorized capitalization of the Company, the number of shares of its capital stock outstanding on the date hereof, and the ownership of the outstanding shares of its capital stock is set forth on Schedule 1 hereto [or “the general partners of the Company and the ownership of its partnership interests are set forth on Schedule 1 hereto” or “the members of the Company and the ownership of its limited liability company interests are set forth on Schedule 1 hereto”].

          (d) The information required pursuant to Section 6.13 of the Security Agreements, as set forth on Schedule 2 hereto, is true and correct in all [material]¹ respects.

     3. Further Assurances. At any time and from time to time, upon the Administrative Agent’s or the Collateral Agent’s request and at the sole expense of the Company, the Company will promptly and duly execute and deliver any and all further instruments and documents and take such further action as the Administrative Agent or the Collateral Agent reasonably deems necessary to effect the purposes of this Instrument of Assumption and Joinder.

     4. Binding Effect. This Instrument of Assumption and Joinder shall be binding upon the Company and shall inure to the benefit of the Lenders and the other Secured Parties and their respective successors and assigns.

     5. GOVERNING LAW. THIS INSTRUMENT OF ASSUMPTION AND JOINDER SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK.

     6. Miscellaneous. Delivery of an executed signature page to this Instrument of Assumption and Joinder by facsimile shall be effective as delivery of a manually executed copy of this Instrument of Assumption and Joinder. This Instrument of Assumption and Joinder is a Loan Document pursuant to the Credit Agreement.

1 The word “material” is not to be inserted if the Company is a newly formed Subsidiary of the Borrower or any Loan Party but may be inserted if the Company has been acquired.

G-3
Form of Instrument of Assumption and Joinder

     IN WITNESS WHEREOF, the undersigned has caused this Instrument of Assumption and Joinder to be duly executed and delivered by its duly authorized officer as of the date first above written.

[NAME OF COMPANY]
By:
	Name:
	Title:

G-4
Form of Instrument of Assumption and Joinder

SCHEDULE 1
to Instrument of Assumption and Joinder

Authorized Capitalization

[Number of shares of capital stock outstanding:

Ownership of the outstanding capital stock:]

or

[General Partners:

Ownership of the partnership interests:]

or

[Members of the Company:

Ownership of the limited liability company interests:]

G-5
Form of Instrument of Assumption and Joinder

Schedule 2
to Instrument of Assumption and Joinder

[Supplement to Schedules to Security Agreement]

G-6
Form of Instrument of Assumption and Joinder

EXHIBIT H

FORM OF INCREMENTAL TERM LOAN COMMITMENT AGREEMENT

[Name(s) of Lender(s)]

Reliant Energy, Inc.
1000 Main Street
Houston, Texas
77002

Re: Incremental Term Loan Commitments

Ladies and Gentlemen:

     Reference is hereby made to the Credit and Guaranty Agreement, dated as of June 12, 2007 (as such agreement may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among (i) Reliant Energy, Inc., a Delaware corporation (the “Borrower”); (ii) the other Loan Parties referred to therein, as Guarantors; (iii) the Lenders referred to therein; and (iv) Deutsche Bank AG New York Branch, as Administrative Agent. Unless otherwise defined herein, capitalized terms used herein shall have the respective meanings set forth in the Credit Agreement.

     Each Lender (each, an “Incremental Term Loan Lender”) party to this letter agreement (this “Agreement”) hereby severally agrees to provide the Incremental Term Loan Commitment set forth opposite its name on Annex I attached hereto (for each such Incremental Term Loan Lender, its “Incremental Term Loan Commitment”). Each Incremental Term Loan Commitment provided pursuant to this Agreement shall be subject to all of the terms and conditions set forth in the Credit Agreement, including, without limitation, Sections 2.1(d) and 2.13 thereof.

     Each Incremental Term Loan Lender, the Borrower and the Administrative Agent acknowledge and agree that the Incremental Term Loan Commitments provided pursuant to this Agreement shall constitute Incremental Term Loan Commitments of the respective Tranche specified in Annex I attached hereto and, upon the incurrence of Incremental Term Loans pursuant to such Incremental Term Loan Commitments, shall constitute Incremental Term Loans under such specified Tranche for all purposes of the Credit Agreement and the other applicable Loan Documents. Each Incremental Term Loan Lender, the Borrower and the Administrative Agent further agree that, with respect to the Incremental Term Loan Commitment provided by each Incremental Term Loan Lender pursuant to this Agreement, such Incremental Term Loan Lender shall receive from the Borrower such upfront fees, unutilized commitment fees and/or other fees, if any, as may be separately agreed to in writing with the Borrower and the Administrative Agent, all of which fees shall be due and payable to such Incremental Term Loan Lender on the terms and conditions set forth in each such separate agreement.

     Furthermore, each of the parties to this Agreement hereby agree to the terms and conditions set forth on Annex I hereto in respect of each Incremental Term Loan Commitment provided pursuant to this Agreement.

Exhibit H
Page 2

     Each Incremental Term Loan Lender party to this Agreement, to the extent not already a party to the Credit Agreement as a Lender thereunder, (i) confirms that it is an Eligible Assignee, (ii) confirms that it has received a copy of the Credit Agreement and the other Loan Documents, together with copies of the financial statements referred to therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement and to become a Lender under the Credit Agreement, (iii) agrees that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement and the other Loan Documents, (iv) appoints and authorizes the Administrative Agent and the Collateral Agent to take such action as agent on its behalf and to exercise such powers under the Credit Agreement and the other Loan Documents as are delegated to the Administrative Agent and the Collateral Agent, as the case may be, by the terms thereof, together with such powers as are reasonably incidental thereto, (iv) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement and the other Loan Documents are required to be performed by it as a Lender, and (v) in the case of each Incremental Term Loan Lender organized under the laws of a jurisdiction outside the United States, attaches the forms referred to in Section 3.1(e) of the Credit Agreement, certifying as to its entitlement as of the date hereof to a complete exemption from United States withholding taxes with respect to all payments to be made to it by the Borrower under the Credit Agreement and the other Loan Documents.

     Upon the date of (i) the execution of a counterpart of this Agreement by each Incremental Term Loan Lender, the Administrative Agent, the Borrower and each Guarantor, (ii) the delivery to the Administrative Agent of a fully executed counterpart (including by way of facsimile or other electronic transmission) hereof, (iii) the payment of any fees then due and payable in connection herewith and (iv) the satisfaction of any other conditions precedent set forth in Section 9 of Annex I hereto (such date, the “Agreement Effective Date”), each Incremental Term Loan Lender party hereto (i) shall be obligated to make the Incremental Term Loans provided to be made by it as provided in this Agreement on the terms, and subject to the conditions, set forth in the Credit Agreement and in this Agreement and (ii) to the extent provided in this Agreement, shall have the rights and obligations of a Lender thereunder and under the other applicable Loan Documents.

     The Borrower acknowledges and agrees that (i) it shall be liable for all Obligations with respect to the Incremental Term Loan Commitments provided hereby including, without limitation, all Incremental Term Loans made pursuant thereto, and (ii) all such Obligations (including all such Incremental Term Loans) shall be entitled to the benefits of the Security Documents.

     Each Guarantor acknowledges and agrees that all Obligations with respect to the Incremental Term Loan Commitments provided hereby and all Incremental Term Loans made pursuant thereto shall (i) be fully guaranteed pursuant to the Guaranty as, and to the extent, provided in the Credit Agreement and (ii) be entitled to the benefits of the Loan Documents as, and to the extent, provided therein and in the Credit Agreement.

     Attached hereto as Annex II is the officers’ certificate required to be delivered pursuant to clause (b) of the definition of “Incremental Loan Commitment Requirements” appearing in Section 1 of the Credit Agreement certifying that the conditions set forth in clause

Exhibit H
Page 3

(a) of the definition of “Incremental Loan Commitment Requirements” appearing in Section 1 of the Credit Agreement have been satisfied (together with calculations demonstrating same (where applicable) in reasonable detail).

     Attached hereto as Annex III [is an opinion] [are opinions] of [insert name or names of counsel, including in-house counsel, who will be delivering opinions], counsel to the respective Loan Parties, delivered as required pursuant to clause (d) of the definition of “Incremental Loan Commitment Requirements” appearing in Section 1 of the Credit Agreement.

     Attached hereto as Annex IV are true and correct copies of officers’ certificates, board of director resolutions and good standing certificates of the Loan Parties required to be delivered pursuant to clause (e) of the definition of “Incremental Loan Commitment Requirements” appearing in Section 1 of the Credit Agreement.

     You may accept this Agreement by signing the enclosed copies in the space provided below, and returning one copy of same to us before the close of business on                     , ___. If you do not so accept this Agreement by such time, our Incremental Term Loan Commitments set forth in this Agreement shall be deemed canceled.

     After the execution and delivery to the Administrative Agent of a fully executed copy of this Agreement (including by way of counterparts and by facsimile or other electronic transmission) by the parties hereto, this Agreement may only be changed, modified or varied by written instrument in accordance with the requirements for the modification of Loan Documents pursuant to Section 11.1 of the Credit Agreement.

     In the event of any conflict between the terms of this Agreement and those of the Credit Agreement, the terms of the Credit Agreement shall control.

*****

Exhibit H
Page 4

     THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

Very truly yours, [NAME OF EACH INCREMENTAL TERM LOAN LENDER]
By
	Name:
	Title

Agreed and Accepted
this ___ day of                     , ___:

RELIANT ENERGY INC.
By:
	Name:
	Title:
DEUTSCHE BANK AG NEW YORK BRANCH,      as Administrative Agent
By:
	Name:
	Title:
By:
	Name:
	Title:

Exhibit H
Page 5

Each Guarantor acknowledges and agrees to each the foregoing provisions of this Incremental Term Loan Commitment Agreement and to the incurrence of the Incremental Term Loans to be made pursuant thereto.

[EACH GUARANTOR], as a Guarantor
By:
	Name:
	Title:

ANNEX I

TERMS AND CONDITIONS FOR
INCREMENTAL TERM LOAN COMMITMENT AGREEMENT

Dated as of                     , ___

1.	Name of Borrower: Reliant Energy, Inc.
2.	Incremental Term Loan Commitment Amounts (as of the Agreement Effective Date):

	Amount of Incremental Term Loan
Names of Incremental Term Loan Lenders	Commitment
Total:

3.	Designation of Tranche of Incremental Term Loan Commitments (and Incremental Term Loans to be funded thereunder):
4.	Indicate the Incremental Term Loan Borrowing Date:
5.	Incremental Term Loan Maturity Date:
7.	Dates for, and amounts of, Incremental Term Loan Scheduled Repayments:
8.	Applicable Margins:
9.	Other Conditions Precedent:

ANNEX II

[officers’ certificate required to be delivered pursuant to clause (b) of the definition of “Incremental Loan Commitment Requirements” appearing in Section 1 of the Credit Agreement certifying that the conditions set forth in clause (a) of the definition of “Incremental Loan Commitment Requirements” appearing in Section 1 of the Credit Agreement have been satisfied]

ANNEX III

[opinion[s] of counsel to the respective Loan Parties, delivered as required pursuant to clause (d) of the definition of “Incremental Loan Commitment Requirements” appearing in Section 1 of the Credit Agreement]

ANNEX IV

[true and correct copies of officers’ certificates, board of director resolutions and good standing certificates of the Loan Parties required to be delivered pursuant to clause (e) of the definition of “Incremental Loan Commitment Requirements” appearing in Section 1 of the Credit Agreement]

EXHIBIT I

FORM OF INCREMENTAL RL COMMITMENT AGREEMENT

[Name(s) of Lender(s)]

[Date]

Reliant Energy, Inc.
1000 Main Street
Houston, Texas
77002

Re: Incremental RL Commitments

Ladies and Gentlemen:

     Reference is hereby made to the Credit and Guaranty Agreement, dated as of June 12, 2007 (as such agreement may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among (i) Reliant Energy, Inc., a Delaware corporation (the “Borrower”); (ii) the other Loan Parties referred to therein, as Guarantors; (iii) the Lenders referred to therein; and (iv) Deutsche Bank AG New York Branch, as Administrative Agent. Unless otherwise defined herein, capitalized terms used herein shall have the respective meanings set forth in the Credit Agreement.

     Each Lender (each an “Incremental RL Lender”) party to this letter agreement (this “Agreement”) hereby severally agrees to provide the Incremental RL Commitment set forth opposite its name on Annex I attached hereto (for each such Incremental RL Lender, its “Incremental RL Commitment”). Each Incremental RL Commitment provided pursuant to this Agreement shall be subject to all of the terms and conditions set forth in the Credit Agreement, including, without limitation, Section 2.1(b) and Section 2.14 thereof.

     Each Incremental RL Lender, the Borrower and the Administrative Agent acknowledge and agree that the Incremental RL Commitments provided pursuant to this Agreement shall constitute Incremental RL Commitments and, upon the Agreement Effective Date (as hereinafter defined), the Incremental RL Commitment of each Incremental RL Lender shall become, or in the case of an existing RL Lender, shall be added to (and thereafter become a part of), the Revolving Loan Commitment of such Incremental RL Lender. Each Incremental RL Lender, the Borrower and the Administrative Agent further agree that, with respect to the Incremental RL Commitment provided by each Incremental RL Lender pursuant to this Agreement, such Incremental RL Lender shall receive from Borrower such upfront fees, unutilized commitment fees and/or other fees, if any, as may be separately agreed to in writing with Borrower and acknowledged by the Administrative Agent, all of which fees shall be due and payable to such Incremental RL Lender on the terms and conditions set forth in each such separate agreement.

Exhibit I
Page 2

     Furthermore, each of the parties to this Agreement hereby agree to the terms and conditions set forth on Annex I hereto in respect of each Incremental RL Commitment provided pursuant to this Agreement.

     Each Incremental RL Lender party to this Agreement, to the extent not already a party to the Credit Agreement as a Lender thereunder, (i) confirms that it is an Eligible Transferee, (ii) confirms that it has received a copy of the Credit Agreement and the other Loan Documents, together with copies of the financial statements referred to therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement and to become a Lender under the Credit Agreement, (iii) agrees that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement and the other Loan Documents, (iv) appoints and authorizes the Administrative Agent and the Collateral Agent to take such action as agent on its behalf and to exercise such powers under the Credit Agreement and the other Loan Documents as are delegated to the Administrative Agent and the Collateral Agent, as the case may be, by the terms thereof, together with such powers as are reasonably incidental thereto, (iv) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement and the other Loan Documents are required to be performed by it as a Lender, and (v) in the case of each Incremental RL Lender organized under the laws of a jurisdiction outside the United States, attaches the forms referred to in Section 3.1(e) of the Credit Agreement, certifying as to its entitlement as of the date hereof to a complete exemption from United States withholding taxes with respect to all payments to be made to it by the Borrower under the Credit Agreement and the other Loan Documents.

     Upon the date of (i) the execution of a counterpart of this Agreement by each Incremental RL Lender, the Administrative Agent, the Borrower and each Subsidiary Guarantor, (ii) the delivery to the Administrative Agent of a fully executed counterpart (including by way of facsimile or other electronic transmission) hereof, (iii) the payment of any fees then due and payable in connection herewith and (iv) the satisfaction of any other conditions precedent set forth in Section 3 of Annex I hereto (such date, the “Agreement Effective Date”), each Incremental RL Lender party hereto (i) shall be obligated to make the Revolving Loans provided to be made by it as provided in this Agreement on the terms, and subject to the conditions, set forth in the Credit Agreement and in this Agreement and (ii) to the extent provided in this Agreement, shall have the rights and obligations of a Lender thereunder and under the other applicable Loan Documents.

     The Borrower acknowledges and agrees that (i) it shall be liable for all Obligations with respect to the Incremental RL Commitments provided hereby including, without limitation, all Revolving Loans made pursuant thereto, and (ii) all such Obligations (including all such Revolving Loans) shall be entitled to the benefits of the Security Documents.

     Each Guarantor acknowledges and agrees that all Obligations with respect to the Incremental RL Commitments provided hereby and all Revolving Loans made pursuant thereto shall (i) be fully guaranteed pursuant to the Guaranty as, and to the extent, provided in the Credit Agreement and (ii) be entitled to the benefits of the Loan Documents as, and to the extent, provided therein and in the Credit Agreement.

Exhibit I
Page 3

     Attached hereto as Annex II is the officer’s certificate required to be delivered pursuant to clause (b) of the definition of “Incremental Loan Commitment Requirements” appearing in Section 1 of the Credit Agreement certifying that the conditions set forth in clause (a) of the definition of “Incremental Loan Commitment Requirements” appearing in Section 1 of the Credit Agreement have been satisfied (together with calculations demonstrating same (where applicable) in reasonable detail).

     Attached hereto as Annex III [is an opinion] [are opinions] of [insert name or names of counsel, including in-house counsel, who will be delivering opinions], counsel to the respective Loan Parties, delivered as required pursuant to clause (d) of the definition of “Incremental Loan Commitment Requirements” appearing in Section 1 of the Credit Agreement.

     Attached hereto as Annex IV are true and correct copies of officers’ certificates, board of director resolutions and good standing certificates of the Loan Parties required to be delivered pursuant to clause (e) of the definition of “Incremental Loan Commitment Requirements” appearing in Section 1 of the Credit Agreement.

     You may accept this Agreement by signing the enclosed copies in the space provided below, and returning one copy of same to us before the close of business on [                     ___, 20___]. If you do not so accept this Agreement by such time, our Incremental RL Commitments set forth in this Agreement shall be deemed canceled.

     After the execution and delivery to the Administrative Agent of a fully executed copy of this Agreement (including by way of counterparts and by facsimile or other electronic transmission) by the parties hereto, this Agreement may only be changed, modified or varied by written instrument in accordance with the requirements for the modification of Loan Documents pursuant to Section 11.1 of the Credit Agreement.

     In the event of any conflict between the terms of this Agreement and those of the Credit Agreement, the terms of the Credit Agreement shall control.

* * *

Exhibit I
Page 4

     THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

Very truly yours, [NAME OF EACH INCREMENTAL RL LENDER]
By
	Name:
	Title

Agreed and Accepted
this ___ day of                     , ___:

RELIANT ENERGY, INC.
By:
	Name:
	Title:
DEUTSCHE BANK AG NEW YORK BRANCH,      as Administrative Agent
By:
	Name:
	Title:
By:
	Name:
	Title:

Exhibit I
Page 5

Each Guarantor acknowledges and agrees to each the foregoing provisions of this Incremental RL Commitment Agreement and to the incurrence of the Revolving Loans to be made pursuant thereto.

[EACH GUARANTOR], as a Guarantor
By:
	Name:
	Title:

ANNEX I

TERMS AND CONDITIONS FOR INCREMENTAL RL COMMITMENT AGREEMENT

Dated as of ___, ___

1.	Name of the Borrower: Reliant Energy, Inc.
2.	Incremental RL Commitment amounts (as of the Agreement Effective Date):

Names of Incremental RL Lenders	Amount of Incremental RL Commitment
Total:

3. Other Conditions Precedent:

EX-10.41.B

Exhibit 10.41B

CONEMAUGH LESSOR GENCO LLC

SUBORDINATED PROMISSORY NOTE

                    , 2001

$     ,000.00 New York, New York August 24, 2000

          FOR VALUE RECEIVED, CONEMAUGH LESSOR GENCO LLC, a Delaware limited liability company (“Owner Lessor”), whose address is c/o Wilmington Trust Company, Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate Trust Administration, hereby promises to pay to PSEGR CONEMAUGH GENERATION, LLC a Delaware limited liability company (the “Owner Participant”), whose address is c/o PSEG Resources Inc., 80 Park Plaza, Suite T-22, Newark, New Jersey 07101, Attention: President,            Million and No/100 Dollars ($     ,000.00) or such lesser amount as is outstanding on January 1, 2029 (the “Maturity Date”), together with accrued and unpaid interest thereon from the date hereof until such maturity, at the rate per annum and on the dates and in the manner specified in this Subordinated Promissory Note (the “Note”).

     1. Definitions.

          (a) All capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to them in the Participation Agreement, dated as of August 24, 2000 (as the same may be amended, supplemented or otherwise modified from time to time, the “Participation Agreement”), among Reliant Energy Mid-Atlantic Power Holdings, LLC, a Delaware limited liability company (“Facility Lessee”), the Owner Lessor, Wilmington Trust Company, in the capacities referred to therein, the Owner Participant, and Bankers Trust Company, in the capacities referred to therein.

          (b) The following terms have the following meanings:

          “Senior Obligations” means, collectively, (i) all obligations of the Owner Lessor now or hereafter existing under the Notes, whether now or hereafter existing, or including, without limitation, reimbursement and principal thereof or indemnity obligations thereunder, interest owed thereon (including interest payable subsequent to the commencement of any proceeding against or with respect to the Owner Lessor under any chapter of the Bankruptcy Code, or any provision of a state bankruptcy law, whether or not such interest is an allowed claim enforceable against the debtor, and whether or not the holder of such obligation would be otherwise entitled to receive dividends or payments with respect to any such interest or any such proceeding), and fees and expenses related thereto and (ii) all obligations of the Owner Lessor now or hereafter existing with respect to any unsubordinated indebtedness, rent or other obligation permitted to be incurred by the terms of the Operative Documents, including, without limitation, the principal thereof, interest owed thereon (including interest payable subsequent to the commencement of any proceeding against or with respect to the Owner Lessor under any chapter of the Bankruptcy Code, or any

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provision of a state bankruptcy law, whether or not such interest is an allowed claim enforceable against the debtor, and whether or not the holder of such obligation would be otherwise entitled to receive dividends or payments with respect to any such interest or any such proceeding), and fees and expenses related thereto.

          “Subordinated Indebtedness” means all obligations of the Owner Lessor now or hereafter existing hereunder or under other promissory notes or other evidences of indebtedness of the Owner Lessor with identical subordination terms (whether created directly or acquired by assignment or otherwise), whether for principal, interest (including interest accruing after the filing of a petition initiating any proceeding against or with respect to the Owner Lessor under the Bankruptcy Code, or any provision of a state bankruptcy law, whether or not such interest accrues after the filing of such petition for purposes of the Bankruptcy Code or is an allowed claim in such proceeding), fees, expenses or otherwise.

     2. Subordination.

          (a) The indebtedness evidenced by this Note and the other obligations described in the definition of “Subordinated Indebtedness” is subordinated and subject in right of payment to the prior payment in full of all Senior Obligations. Each holder of this Note, by its acceptance hereof, agrees to and shall be bound by all the provisions hereof.

          (b) No payment on account of principal, premium or interest on the Subordinated Indebtedness shall be made unless at the time of such payment and after giving effect thereto (i) full payment of all amounts then due and payable with respect to Senior Obligations has been made, (ii) such payment would be permitted under the Senior Obligations and by the Participation Agreement and the other Operative Documents, (iii) at the time of such payment and after giving effect to such payment the OP Guarantee shall be in full force and effect (provided that the OP Guarantee shall not have been terminated or released in accordance with the terms of the Operative Documents), (iv) Owner Participant is entitled to receive such payments free and clear of the Lien of the Lease Indenture Trustee, (v) no default in the performance of any obligation of the Lessor Manager under the Operative Documents has occurred and is continuing, (vi) there shall not exist any Significant Lease Default, Lease Indenture Event of Default or any event or occurrence which, with the passage of time or the giving of notice or both, would become a Lease Indenture Event of Default shall have occurred and be continuing, and (vii) the ratio of the principal of the Indebtedness of the Owner Lessor (other than the Notes) to the Owner Lessor Net Worth is less than or equal to 4.88 to 1. Any such payment not prohibited pursuant to this paragraph is hereinafter referred to as a “Permitted Payment.” For the purposes of these provisions, no Senior Obligation shall be deemed to have been paid in full until the obligee of such Senior Obligation shall have indefeasibly received payment in full in cash. Any cash payment on the Senior Obligations made by a Person which is solvent at the time of and after giving effect to such payment shall be presumed to have been indefeasibly paid in full in cash absent actual knowledge by the payor to the contrary.

          (c) Upon any payment or distribution of assets of the Owner Lessor of any kind or character, whether in cash, property or securities, to creditors upon any dissolution or winding up or total or partial liquidation or reorganization of the Owner Lessor, whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or other proceedings, then and in any such

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event all amounts (including interest, indemnities and fees) due or to become due upon all Senior Obligations shall first be paid in full before the holders of the Subordinated Indebtedness shall be entitled to retain any assets so paid or distributed in respect of the Subordinated Indebtedness (for principal, premium, interest or otherwise) and upon any such dissolution or winding up or liquidation or reorganization, any payment or distribution of assets of the Owner Lessor of any kind or character, whether in cash, property or securities, to which the holders of the Subordinated Indebtedness would be entitled, except as otherwise provided herein, shall be paid by the Owner Lessor or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other person making such payment or distribution, or by the holders of the Subordinated Indebtedness if received by them, directly to the holders of the Senior Obligations or their representatives for application to such Senior Obligations in accordance with their terms. So long as any Senior Obligation is outstanding, the holder of this Note shall not commence, or join with any creditor other than any Person to whom Senior Obligations are owed, in commencing, or directly or indirectly causing the Owner Lessor to commence, or assist the Owner Lessor in commencing, any proceeding referred to in the preceding sentence.

          (d) The holder of this Note hereby irrevocably authorizes and empowers (without imposing any obligation on) each Person to whom any Senior Obligation is owed and such Person’s representatives, under the circumstances set forth in the immediately preceding paragraph, to demand, sue for, collect and receive every such payment or distribution described therein and give acquittance therefor, to file claims and proofs of claims in any statutory or nonstatutory proceeding, to vote such Person’s ratable share of the full amount of the Subordinated Indebtedness evidenced by this Note in its sole discretion in connection with any resolution, arrangement, plan of reorganization, compromise, settlement or extension and to take all such other action (including the right to participate in any composition of creditors and the right to vote such Person’s ratable share of the Subordinated Indebtedness, evidenced by this Note, at creditors’ meetings for the election of trustees, acceptances of plans and otherwise), in the name of the holder of the Subordinated Indebtedness evidenced by this Note or otherwise, as such Person’s representatives may deem necessary or desirable for the enforcement of the subordination provisions of this Note. The holder of this Note shall execute and deliver to each Person to whom any Senior Obligation is owed and such Person’s representatives all such further instruments confirming the foregoing authorization, and all such powers of attorney, proofs of claim, assignments of claim and other instruments, and shall take all such other action as may be reasonably requested by such Person or such Person’s representatives in order to enable such holder to enforce all claims upon or in respect of such Person’s ratable share of the Subordinated Indebtedness evidenced by this Note; provided, however, that nothing herein shall obligate the holder of this Note to pay or incur any cost, expense or liability or to take any action that may result in the imposition of any cost, expense or liability.

          (e) The holder of this Note shall not have any right to accelerate payment of, or institute any proceedings to enforce, the Subordinated Indebtedness (other than a Permitted Payment) so long as any Senior Obligation is outstanding.

          (f) If any payment (other than a Permitted Payment) or distribution of assets of the Owner Lessor of any kind or character, whether in cash, property or securities, shall be received by the holder of the Subordinated Indebtedness before all Senior Obligations are paid in full, such payment or distribution will be held in trust for the benefit of, and shall be immediately paid over

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to, the holders of the Senior Obligations or their representatives for application to such Senior Obligations in accordance with their terms.

          (g) Nothing contained in this Note is intended to or shall impair as between the Owner Lessor, its creditors (other than the holders of Senior Obligations) and the holders of the Subordinated Indebtedness, the obligations of the Owner Lessor to pay to the holders of the Subordinated Indebtedness, as and when the same shall become due and payable in accordance with their terms, or to affect the relative rights of the holders of the Subordinated Indebtedness and creditors of the Owner Lessor (other than holders of Senior Obligations).

          (h) The Persons to whom Senior Obligations are due shall not be prejudiced in their rights to enforce the subordination contained herein in accordance with the terms hereof by any act or failure to act on the part of the Owner Lessor.

          (i) The holder of this Note agrees to execute and deliver such further documents and to do such other acts and things as the Transaction Parties may reasonably request in order fully to effect the purposes of these subordination provisions. Each holder of this Note by its acceptance hereof authorizes and directs the Transaction Parties on its behalf to take such further action as may be necessary to effectuate the subordination as provided herein and appoints the Lease Indenture Trustee, so long as the Lien of the Lease Indenture shall not have been terminated or discharged in accordance with the terms thereof, and thereafter, the holder of the largest principal amount of Senior Obligations of the Owner Lessor outstanding at such time, as its attorney-in-fact for any and all such purposes related to this Note.

          (j) The subordination effected by these provisions, and the rights of the Persons to whom Senior Obligations are owed, shall not be affected by (i) any amendment of, or addition or supplement to, any Operative Document, or any other document evidencing or securing any Senior Obligation, (ii) any exercise or nonexercise of any right, power or remedy under or in respect of any Operative Document, or any other document evidencing or securing any Senior Obligation or (iii) any waiver, consent, release, indulgence, extension, renewal, modification, delay, or other action, inaction or omission, in respect of, any Operative Document, or any other document evidencing or securing any Senior Obligation, whether or not any holder of any Subordinated Indebtedness shall have had notice or knowledge of any of the foregoing. No failure on the part of any holder of a Senior Obligation to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

          (k) The holder of this Note and the Owner Lessor each hereby waive promptness, diligence, notice of acceptance and any other notice with respect to any Senior Obligation and these terms of subordination and any requirement that any Transaction Party protect, secure, perfect or insure any Lien or any property subject thereto or exhaust any right to take any action against the Owner Lessor, any other Person or any collateral.

          (l) These terms of subordination shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any Senior Obligation is rescinded or must otherwise be returned by the Person to whom such Senior Obligation is owed upon the insolvency,

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bankruptcy or reorganization of the Owner Lessor or otherwise, all as though such payment had not been made.

          (m) The provisions of these terms of subordination constitute a continuing agreement and shall (i) remain in full force and effect until the Facility Lease has been terminated and all amounts owed thereunder have been paid and the Lien of the Lease Indenture has been terminated or discharged in accordance with their terms, (ii) be binding upon the holder of this Note and the Owner Lessor and their respective successors, transferees and assignees and (iii) inure to the benefit of, and be enforceable by, the Transaction Parties. Without limiting the generality of the foregoing clause (iii), the Transaction Parties may assign or otherwise transfer all or any portion of their rights and obligations under all or any of the Operative Documents to any other Person (to the extent permitted by the Operative Documents), and such other Person shall thereupon become vested with all the rights in respect thereof granted to the Transaction Parties herein or otherwise.

     3. Interest. The principal of this Note shall bear interest at a rate per annum equal to the lesser of (a) effective rate on a United States Treasury bond maturing on the Maturity Date plus 3.00% per annum or (b) the highest rate permitted under applicable law (the “Maximum Lawful Rate”).

     4. Notices. All written notices hereunder shall be given in the manner described in Section 17.6 of the Participation Agreement and sent to the respective parties at the addresses set forth in the preamble above.

     5. Maturity and Scheduled Payments. Subject to Section 2 and subject to the right of the holder of this Note to accelerate the maturity hereof as hereinafter described, the principal of this Note shall be due and payable on the Maturity Date and accrued and unpaid interest on the principal amount outstanding on this Note shall be due and payable to the Owner Participant at its address set forth above as it accrues semi-annually on each [January 2 and July 2] throughout the term of this Note, beginning on the date that the Lien of Lease Indenture has been terminated or discharged, until all unpaid principal and accrued and unpaid interest on this Note shall be paid in full.

     6. Prepayments; Payments Generally. Subject to Section 2, at any time, the Owner Lessor may prepay any amounts owing hereunder, in whole or in part, without penalty; provided, however, that a prepayment shall not be subject to the requirements of Section 2 to the extent that the Owner Lessor shall have received within 60 days before such prepayment equity contributions at least equal to such prepayment. If any payment of principal or interest on this Note shall become due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall in such case be included in computing interest in connection with such payment. All payments made in accordance with this Note are to be made in lawful money of the United States of America in same day funds at the locations specified herein, or such other place as the Owner Participant shall designate in writing to the Owner Lessor.

     7. Events of Default. If any of the following events (each, an “Event of Default”) shall occur and be continuing, subject to Section 2 hereof, the outstanding principal balance of this Note, together with accrued and unpaid interest and any other sums that the Owner Lessor may owe to the Owner Participant under or in connection with this Note or otherwise (collectively, the

5

“Obligations”) shall automatically become immediately due and payable, without any further notice of any kind to the Owner Lessor, all of which notices are expressly waived below:

     (a) The Owner Lessor shall fail to make any payment in respect of the principal of or interest on this Note within five (5) Business Days after the same shall have become due;

     (b) the Owner Lessor (i) admits in writing its inability to pay its debts generally as they become due; (ii) generally fails to pay its debts as they become due; (iii) files a petition or answer seeking for itself, or consenting to or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under, any bankruptcy law or any insolvency law or other law for the relief or aid of debtors (including, without limitation, the Bankruptcy Code or any amendment thereto); or (iv) makes an assignment for the benefit of its creditors; or

     (c) there is appointed a receiver, custodian, liquidator, fiscal agent or trustee of the Owner Lessor or of the whole or any substantial part of its properties or assets, or any court enters an order, judgment or decree approving a petition filed against the Owner Lessor seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any law referred to in paragraph (b) above and either such order, judgment or decree so filed against it is not dismissed or stayed (unless and until such stay is no longer in effect) within 30 days of entry thereof or an order for relief is entered pursuant to any such law.

     8. Maximum Lawful Rate. Nothing contained in this Note or any other document executed in connection herewith is intended to require the Owner Lessor to pay interest (including fees, charges or expenses or any other amounts which, under applicable law, are deemed interest) for the account of the Owner Participant at a rate exceeding the Maximum Lawful Rate.

          All agreements between the Owner Lessor and the Owner Participant, whether now existing or hereafter arising and whether written or oral, are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of demand being made on this Note, prepayment or otherwise, shall the amount paid, or agreed to be paid, to the Owner Participant for the use, forbearance, or detention of the money to be loaned under this Note or otherwise or for the payment or performance of any covenant or obligation contained herein or in any other document executed in connection herewith exceed the Maximum Lawful Rate. If the amount of any interest (including fees, charges or expenses or any other amounts which, under applicable law, are deemed interest) contracted for, taken, reserved, charged or received by or for the account of the Owner Participant, would exceed the Maximum Lawful Rate, then, ipso facto, the amount of such interest payable for the account of the Owner Participant shall be automatically reduced to such Maximum Lawful Rate, and if, from any such circumstance, the Owner Participant shall ever receive interest or anything which might be deemed interest under applicable law which would exceed the Maximum Lawful Rate, such amount which would be excessive interest shall be applied to the reduction of the principal amount owing on account of this Note held by the Owner Participant and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal of such Note, such excess shall be refunded to the Owner Lessor. All sums paid or agreed to be paid to the Owner Participant for the use, forbearance or detention of the indebtedness of the Owner

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Lessor to the Owner Participant shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full term of such indebtedness until payment in full of the principal (including the period of any renewal or extension thereof) so that the interest on account of such indebtedness shall not exceed the Maximum Lawful Rate.

     9. Expenses. In addition to all principal and accrued interest on this Note, the Owner Lessor agrees, subject to Section 2, to pay (i) all reasonable costs and expenses incurred by all owners and holders of this Note in collecting this Note through any probate, reorganization, bankruptcy or any other proceeding; and (ii) reasonable attorneys’ fees when and if this Note is placed in the hands of an attorney for collection after default.

     10. Waivers. The Owner Lessor and any and all endorsers, guarantors and sureties severally waive grace, presentment for payment, notice of dishonor, protest and notice of protest and diligence in collecting and bringing of suit against any party hereto. The Owner Lessor and any and all endorsers, guarantors and sureties further agree: (i) to all renewals, extensions, amendments and modifications hereof without limit, or partial payments hereon; (ii) to any release or substitution of security herefor, in whole or in part, or any release or discharge of any guarantor, surety, or co-maker, with or without notice, before or after maturity; (iii) that waiver of any default shall not constitute waiver of any prior or subsequent default; and (iv) that no remedy, right or power conferred upon The Owner Participant or the holder of this Note is intended to be exclusive of any other remedy, right or power given hereunder or now or hereafter available at law, in equity or otherwise. This Note may be transferred by The Owner Participant, and the rights and privileges of The Owner Participant under this Note shall inure to the benefit of The Owner Participant’s representatives, successors and assigns.

     11. Proceeds. The proceeds of this Note are for business, commercial or investment purposes and none of such proceeds shall be used for personal, consumer, family household or agricultural purposes or for purchasing or carrying margin stock.

     12. Governing Law. This Note shall be governed by, and construed in accordance with, the laws of the State of New York.

     13. Final Agreement. This Note and the other documents, agreements and instruments executed in connection herewith represent the final agreement between the parties and supersede all previous agreements and understandings, oral or written, relating to this subject matter.

CONEMAUGH LESSOR GENCO LLC
By:
	Name:
	Title:

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EX-10.47.B

Exhibit 10.47B

WAKEBOARD NORTH PSA
Schedules

Schedule 3.03(b)
Seller Consents

1. Consents necessary to effect the Closing under (a) the Amended and Restated Credit Agreement, dated as of October 28, 2002, among Orion Power New York, L.P., as Borrower, Banc of America Securities LLC and BNP Paribas, as Lead Arrangers and Joint Book Runners, the lenders party thereto, and Bank of America, N.A., as Issuing Bank and as Administrative Agent, as amended to date, (b) the “Financing Documents” as defined therein or executed pursuant thereto and as amended to date, and (c) any of the “Credit Parties’” (as defined therein) organizational documents.

2. Consents necessary to effect the Closing under (i) the Second Amended and Restated Credit Agreement dated October 28, 2002, among Orion Power Midwest, L.P., as Borrower, Banc of America Securities LLC and BNP Paribas, as Lead Arrangers and Joint Book Runners, the lenders parties thereto, Bank of America, N.A., as Issuing Bank and Administrative Agent, as amended to date, and (ii) the “Financing Documents” as defined therein or executed pursuant thereto and as amended to date.

3. Consents necessary, if any, to effect the Closing under (i) the Amended and Restated Credit and Guaranty Agreement, dated as of March 28, 2003, by and among Reliant Energy, Inc. and the other Credit Parties referred to therein; the Lenders referred to therein; Bank of America, N.A., as Administrative Agent, as Collateral Agent, and as an Issuing Bank; and Barclays Bank, PLC and Deutsche Bank AG, New York Branch, as syndication agents for the Lenders, as amended to date and (ii) the “Fundamental Documents” as defined therein or executed pursuant thereto and as amended to date.

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Schedule 3.03(c)
Seller Governmental Approvals

1. New York State Department of Environmental Conservation (“NYSDEC”) Permits/Registrations — the following permits subject to New York Codes, Rules and Regulations Title 6 (“6 NYCRR”), Part 621 Applications for Permit Transfer will require prior notification of change of in equity ownership. These permits are held by Carr Street Generating Station, L.P., Erie Boulevard Hydropower, L.P. and Orion Power New York GP II, Inc.

State Pollutant Discharge Elimination System (water discharge permits)

Title IV, Article 19 (air permits) and companion regulations at 6 NYCRR Parts 201, 203, & 215

Title V (air permits)

Section 401 Water Quality Certification

Environmental Conservation Law Article 15 (stream disturbance permits)

2. New York State Department of Environmental Conservation (“NYSDEC”) Permits/Registrations — the following permits subject to New York Codes, Rules and Regulations Title 6 (“6 NYCRR”), Part 621 Applications for Permit Transfer will require the submission of a permit transfer application at least 30 days prior to the name change of Orion Power New York GP II, Inc. in connection with the OPNY Corporate Reorganization:

Section 401 Water Quality Certification

3. New York State Department of Public Service Approvals

     The sale to Buyer of Carr Street Generating Station, L.P., Erie Boulevard Hydropower, L.P., Orion Power New York GP II, Inc. is subject to the prior approval of the Public Service Commission pursuant to Public Service Law Section 70.

4. Federal Energy Regulatory Commission Approvals (“FERC”)

     Section 203 Application for transfer of ownership of the FERC jurisdictional facilities must be approved in advance by FERC.

5. Federal Communications Commission (“FCC”)

     FCC approval required for transfer of ownership or control of radio licenses.

6. NYSDEC Consent Orders

     The prior written approval of NYSDEC is required to replace Non-Company Affiliates that are consent parties (see Schedule 4.12).

7. Hart-Scott-Rodino Act

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     Applicable requirements under the HSR Act

8. Securities and Exchange Commission

     Applicable reporting requirements of the Exchange Act and the rules and regulations promulgated thereunder.

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Schedule 3.04
Capitalization

Carr Street Generating Station, L.P.
General Partner
Orion Power New York GP, Inc.	1% general partnership interest
Limited Partner
Orion Power New York, L.P.	99% limited partnership interest
Erie Boulevard Hydropower, L.P.
General Partner
Orion Power New York GP, Inc.	1% general partnership interest
Limited Partner
Orion Power New York, L.P.	99% limited partnership interest

Encumbrances

(1)

Liens, restrictions on transfer or encumbrances created under (a) the Amended and Restated Credit Agreement, dated as of October 28, 2002, among Orion Power New York, L.P., as Borrower, Banc of America Securities LLC and BNP Paribas, as Lead Arrangers and Joint Book Runners, the lenders party thereto, and Bank of America, N.A., as Issuing Bank and as Administrative Agent, as amended to date, and (b) the “Financing Documents” as defined therein or executed pursuant thereto and as amended to date.

(2)

Liens, restrictions on transfer or encumbrances created under (a) the Second Amended and Restated Credit Agreement dated October 28, 2002, among Orion Power Midwest, L.P., as Borrower, Banc of America Securities LLC and BNP Paribas, as Lead Arrangers and Joint Book Runners, the lenders parties thereto, Bank of America, N.A., as Issuing Bank and Administrative Agent, as amended to date, and (b) the “Financing Documents” as defined therein or executed pursuant thereto and as amended to date.

Orion Power Operating Services Carr Street, Inc.^*

Authorized capital stock 100 shares, par value $1.00

Orion Power Operating Services, Inc. 100 shares

^* Note: subject to change of OPNY Corporate Reorganization and OPOS Corporate Reorganization occur.

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Orion Power Operating Services Coldwater, Inc.^†

Authorized capital stock	100 shares, par value $1.00
Orion Power Operating Services, Inc.	100 shares

Orion Power New York GP II, Inc.^*

Authorized capital stock	100 shares, par value $1.00
Orion Power Holdings, Inc.	100 shares

Encumbrances

Liens, restrictions on transfer or encumbrances created under (i) the Amended and Restated Credit and Guaranty Agreement, dated as of March 28, 2003, by and among Reliant Energy, Inc. and the other Credit Parties referred to therein; the Lenders referred to therein; Bank of America, N.A., as Administrative Agent, as Collateral Agent, and as an Issuing Bank; and Barclays Bank, PLC and Deutsche Bank AG, New York Branch, as syndication agents for the Lenders, as amended to date and (ii) the “Fundamental Documents” as defined therein or executed pursuant thereto, and as amended to date.

^† Note: subject to change of OPNY Corporate Reorganization and OPOS Corporate Reorganization occur.

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Schedule 4.02(a)
Company Consents

1. Consents necessary to effect the Closing under (a) the Amended and Restated Credit Agreement, dated as of October 28, 2002, among Orion Power New York, L.P., as Borrower, Banc of America Securities LLC and BNP Paribas, as Lead Arrangers and Joint Book Runners, the lenders party thereto, and Bank of America, N.A., as Issuing Bank and as Administrative Agent, as amended to date, (b) the “Financing Documents” as defined therein or executed pursuant thereto and as amended to date, and (c) any of the “Credit Parties’” (as defined therein) organizational documents.

2. Consents necessary to effect the Closing under (i) the Second Amended and Restated Credit Agreement dated October 28, 2002, among Orion Power Midwest, L.P., as Borrower, Banc of America Securities LLC and BNP Paribas, as Lead Arrangers and Joint Book Runners, the lenders parties thereto, Bank of America, N.A., as Issuing Bank and Administrative Agent, as amended to date, and (ii) the “Financing Documents” as defined therein or executed pursuant thereto and as amended to date.

3. Consents, if any, necessary to effect the Closing under (i) the Amended and Restated Credit and Guaranty Agreement, dated as of March 28, 2003, by and among Reliant Energy, Inc. and the other Credit Parties referred to therein; the Lenders referred to therein; Bank of America, N.A., as Administrative Agent, as Collateral Agent, and as an Issuing Bank; and Barclays Bank, PLC and Deutsche Bank AG, New York Branch, as syndication agents for the Lenders, as amended to date and (ii) the “Fundamental Documents” as defined therein or executed pursuant thereto, as amended to date.

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Schedule 4.03
Capitalization

1. Typical rights of a Pledgee to all cash, securities, dividends and other property received or otherwise distributed, substituted or exchanged in respect of or exchange for the Company Interests and created under (i) the Amended and Restated Credit Agreement, dated as of October 28, 2002, among Orion Power New York, L.P., as Borrower, Banc of America Securities LLC and BNP Paribas, as Lead Arrangers and Joint Book Runners, the lenders party thereto, and Bank of America, N.A., as Issuing Bank and as Administrative Agent, as amended to date, and (b) the “Financing Documents” as defined therein or executed pursuant thereto and as amended to date.

2. Typical rights of a Pledgee to all cash, securities, dividends and other property received or otherwise distributed, substituted or exchanged in respect of or exchange for the Company Interests and created under (i) the Second Amended and Restated Credit Agreement dated October 28, 2002, among Orion Power Midwest, L.P., as Borrower, Banc of America Securities LLC and BNP Paribas, as Lead Arrangers and Joint Book Runners, the lenders parties thereto, Bank of America, N.A., as Issuing Bank and Administrative Agent, as amended to date, and (ii) the “Financing Documents” as defined therein or executed pursuant thereto and as amended to date.

3. Typical rights of a Pledgee to all cash, securities, dividends and other property received or otherwise distributed, substituted or exchanged in respect of or exchange for the Company Interests and created under (i) the Amended and Restated Credit and Guaranty Agreement, dated as of March 28, 2003, by and among Reliant Resources, Inc. and the other Credit Parties referred to therein; the Lenders referred to therein; Bank of America, N.A., as Administrative Agent, as Collateral Agent, and as an Issuing Bank; and Barclays Bank, PLC and Deutsche Bank AG, New York Branch, as syndication agents for the Lenders, as amended to date and (ii) the “Fundamental Documents” as defined therein or executed pursuant thereto and as amended to date.

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Schedule 4.04
February 29 Balance Sheet

ERIE BOULEVARD HYDROPOWER, L.P.
Balance Sheet — Unaudited
February 29, 2004
(Thousands of Dollars)

Assets
Current assets:
Cash and cash equivalents	$	9,094
Accounts receivable, net		9,461
Materials and supplies		934
Prepaid insurance and property taxes		13,098
Other current assets		618
Total current assets		33,205
Property, plant and equipment, net		521,246
Other assets:
Other intangibles, net		66,313
Total other assets		66,313
Total assets	$	620,764
Liabilities and Partner’s Capital
Current liabilities:
Accounts payable	$	4,261
Payable to affiliates, net		160,238
Accrued expenses, net		2,358
Total current liabilities		166,857
Long-term debt		932
Other liabilities:
Contractual obligation		1,284
Benefits obligations		6,248
Other		13
Total other liabilities		7,545
Total liabilities		175,334
Partner’s capital		445,430
Total liabilities and partner’s capital	$	620,764

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CARR STREET GENERATING STATION, LP,
Balance Sheet — Unaudited
February 29, 2004
(Thousands of Dollars)

Assets
Current assets:
Cash and cash equivalents	$	636
Accounts receivable, net		196
Materials and supplies		1,038
Fuel inventory		302
Prepaid insurance and property taxes		333
Other current assets		540
Total current assets		3,045
Property, plant and equipment, net		11,480
Other assets:
Other intangibles, net		1,325
Other		5
Total other assets		1,330
Total assets	$	15,855
Liabilities and Partner’s Capital
Current liabilities:
Accounts payable	$	130
Payable to affiliates, net		3,519
Accrued expenses		114
Total current liabilities		3,763
Other liabilities:
Other		1
Total other liabilities		1
Total liabilities		3,764
Partner’s capital		12,091
Total liabilities and partner’s capital	$	15,855

9

ORION POWER OPERATING SERVICES COLD WATER INC.
Consolidated Balance Sheet — Unaudited
February 29, 2004
(Thousands of Dollars)

Assets
Current assets:
Cash and cash equivalents	$	2,558
Total current assets		2,558
Other assets:
Other		5
Total other assets		5
Total assets	$	2,563
Liabilities and Shareholder Equity
Current liabilities:
Accounts payable	$	46
Payable to affiliates, net		702
Accrued expenses		293
Total current liabilities		1,041
Other liabilities:
Other		50
Total other liabilities		50
Total liabilities		1,091
Shareholder equity		1,472
Total liabilities and shareholder equity	$	2,563

10

ORION POWER OPERATING SERVICES CARR STREET INC.
Balance Sheet — Unaudited
February 29, 2004
(Thousands of Dollars)

Assets
Current assets:
Cash and cash equivalents	$	111
Receivable from affiliates, net		147
Total current assets		258
Total assets	$	258
Liabilities and Shareholder Equity
Current liabilities:
Accounts payable	$	7
Accrued expenses		35
Total current liabilities		42
Other liabilities:
Other		7
Total other liabilities		7
Total liabilities		49
Shareholder equity		209
Total liabilities and shareholder equity	$	258

11

ORION POWER NEW YORK GP II, INC.
Balance Sheet — Unaudited
February 29, 2004
(Thousands of Dollars)

Assets
Current assets:
Cash and cash equivalents	$	302
Account receivable, net		43
Prepaid insurance and property taxes		18
Total current assets		363
Property, plant and equipment, net		1,412
Total assets	$	1,775
Liabilities and Partner’s Capital
Current liabilities:
Accounts payable	$	1
Payable to affiliates, net		358
Accrued expenses		19
Total current liabilities		378
Total liabilities		378
Partner’s capital		1,397
Total liabilities and partner’s capital	$	1,775

12

ERIE BOULEVARD HYDROPOWER, L.P.
Income Statement — Unaudited
For the Period Ended February 29, 2004
(Thousands of Dollars)

Operating revenues:
Revenues	$	20,266
Operating expenses:
Purchased power		97
Operations and maintenance		6,305
Taxes other than income taxes		3,850
Depreciation and amortization		1,989
Total operating expenses		12,241
Operating income		8,025
Interest expense, net		(4	)
Net income	$	8,021

13

CARR STREET GENERATING STATION, L.P.
Income Statement — Unaudited
For the Period Ended February 29, 2004
(Thousands of Dollars)

Operating revenues:
Revenues	$	717
Operating expenses:
Fuel		186
Fuel — affiliates		48
Purchased power		75
Operations and maintenance		301
Taxes other than income taxes		114
Depreciation and amortization		67
Total operating expenses		791
Operating loss		(74	)
Net loss	$	(74	)

14

ORION POWER OPERATING SERVICES COLD WATER INC.
Income Statement — Unaudited
For the Period Ended February 29, 2004
(Thousands of Dollars)

Servicing revenues, net of operations and maintenance expenses	$	138
Interest revenues		1
Income before taxes		139
Income taxes		49
Net income	$	90

15

ORION POWER OPERATING SERVICES CARR STREET INC.
Income Statement — Unaudited
For the Period Ended February 29, 2004
(Thousands of Dollars)

Servicing revenues, net of operations and maintenance expenses	$	18
Income before taxes		18
Income taxes		6
Net income	$	12

16

ORION POWER NEW YORK GP II, INC.
Income Statement — Unaudited
For the Period Ended February 29, 2004
(Thousands of Dollars)

Operating revenues:
Revenues	$	83
Operating expenses:
Operations and maintenance		3
Taxes other than income taxes		4
Depreciation and amortization		90
Total operating expenses		97
Operating loss		(14	)
Income taxes		(5	)
Net loss	$	(9	)

17

Schedule 4.05(a)
Certain Company Liabilities

Liability	Amount (US$)
Pension Liability	$	502,066
Post Retirement Liability	$	88,973
Local 97 increase in vacation liability	$	587,062
NYSDEC annual liabilities accrued	$	156,250
River enhancement fund liabilities accrued	$	30,675
Environmental liability	$	345,885	‡

^‡ Per GAAP as of February 29, 2004, based on information available, including coverage under Commerce and Industry Insurance Company Cleanup Cost Cap Policy No. 8086703 for Erie Boulevard Hydropower, L.P.

18

Schedule 4.05(b)
Material Adverse Effect

None.

19

Schedule 4.06
Litigation

1.	Claude H. Akley v. Erie Boulevard Hydropower, L.P.
2.	Carl M. Guereschi et al. v. Erie Boulevard Hydropower et al.
3.	Erie Boulevard Hydropower, L.P. v. Board of Hudson River-Black River Regulating District, et al.
4.	Isaac F. Simmons, Jr. and Catherine Simmons v. Erie Boulevard Hydropower, L.P. et al.
5.	Jeffrey Harding v. Erie Boulevard Hydropower, L.P.
6.	Erie Boulevard Hydropower, L.P. v. Town of Moreau and Harry Gutheil, Jr.
7.	Erie Boulevard Hydropower, L.P. v. Michael Orso
8.	Stuyvesant Falls Hydro Corporation v. Erie Boulevard Hydropower, L.P.
9.	Erie Boulevard Hydropower, L.P. v. Roderick Downer
10.	Consolidated Edison Company of New York, et al. v. New York Independent System Operator FERC Docket No. EL04-36.
11.	Erie Boulevard Hydropower, L.P. v. Town of Queensbury, et al. (Real Property Tax Proceeding)
12.	Erie Boulevard Hydropower, L.P. v. Town of Moreau, et al. (Real Property Tax Proceeding)
13.	Erie Boulevard Hydropower, L.P. v. Town of Ephratah and Johnstown, et al. (Real Property Tax Proceeding)
14.	Erie Boulevard Hydropower, L.P. v. Town of Orwell, et al. (Real Property Tax Proceeding)

20

Schedule 4.07
Compliance with Laws

1.	The School Street Station has a Consent Order relating to environmental remediation. This Consent Order was issued to Niagara Mohawk. There is a Memorandum of Understanding between Niagara Mohawk Power Corp. and Erie that requires Erie to be responsible for all cleanup costs and other liabilities associated with the Consent Order.
2.	The Ephratah Station has received four citations from the NYSDEC related to excessive pond drawdown.
3.	The Chasm Falls Hydro Station received an Order on Consent for failure to properly distribute Copies 3 and 4 of a Hazardous Waste Manifest. The Order must be signed and returned along with the penalty payment of $1,000 by no later than May 4, 2004.
4.	The Carr Street Generating Station received a letter from the U.S. Environmental Protection Agency stating that units A and B exceeded emissions for sulfur dioxide in 2001, as neither unit held any sulfur dioxide allowances in their accounts as of March 1, 2002. In accordance with 40 CFR Section 77.6 of the Acid Rain Program regulations, the penalty to be paid is $5,548. Payment of this amount is due by May 29, 2004.

21

Schedule 4.08
Material Contracts

(i) None

(ii) Shared Power Purchase Agreement between Erie Boulevard Hydropower L.P. and Niagara Mohawk Power Corporation dated February 24, 2000

     Power Purchase Agreement between Erie Boulevard Hydropower L.P. and Niagara Mohawk Power Corporation dated March 16, 2001

     Memorandum of Understanding Between Niagara Mohawk and Erie Boulevard Hydropower, L.P. for Motoring and Control Center Communications dated March 16, 2001

     Power Purchase Agreement between Orion Power New York GP II, Inc. and Niagara Mohawk Power Corporation dated October 24, 2002

     Service Agreement for New York ISO Market Administration and Control Area Services Tariff between the New York Independent System Operator and Carr Street Generating Station, L.P., dated November 4, 2003

     Agreement to Sell Unforced Capacity in NYISO Administered Installed Capacity Auctions between the New York Independent System Operator and Carr Street Generating Station, L.P., dated November 4, 2003

     Nine Mile Point One Emergency Power Agreement between Erie Boulevard Hydropower L.P. and Niagara Mohawk Power Corporation dated June 30, 1999, and Consent to Assignment to Nine Mile Point Nuclear Station, LLC, dated March 7, 2001.

(iii) Gas Transportation Agreement between East Syracuse Generating Company, LP and Niagara Mohawk Power Corp. dated June 26, 1998 (assigned to Carr Street in November 2003)

(iv) None.

(v) Interconnection Agreement between East Syracuse Generating Company L.P. and Niagara Mohawk Power Corporation dated February 13, 1992 and Assignment by East Syracuse Generating Company L.P. to Carr Street Generating Station L.P. dated November 19, 1998

     Interconnection Agreement between Erie Boulevard Hydropower L.P. and Niagara Mohawk Power Corporation dated February 4, 1999

     Interconnection Agreement between Orion Power New York GP II, Inc. and Niagara Mohawk Power Corporation dated November 15, 2002

(vi) None.

(vii) Service Agreement between Erie Boulevard Hydropower L.P., Village of Potsdam and Town of Potsdam dated November 15, 2001

22

     Service Agreement between Erie Boulevard Hydropower L.P. and City of Cohoes dated December 31, 2001

     Service Agreement between Erie Boulevard Hydropower L.P. and Lewis County dated July 10, 2002

     Service Agreement between Erie Boulevard Hydropower L.P., Town of Russia and Town of Trenton dated November 12, 2003

     Contract between Erie Boulevard Hydropower L.P. and Wood Group Generation Services for work at Spier Falls dated March 22, 2004.

(viii) Lease Agreement (Potsdam) between Erie Boulevard Hydropower L.P. and Mark Purcell dated November 11, 1999

     Pilot Mortgage, dated as of December 31, 2001, from Erie Boulevard Hydropower, LP to City of Cohoes Industrial Development Agency (“CCIDA”) (Subdocuments include: Ground Lease, Sublease, and Payment in Lieu of Taxes Agreement, between Erie and CCIDA dated December 31, 2001).

(ix) None

(x) Operations and Service Agreement between Carr Street Generating Station L.P. and COSI Carr St., Inc. dated November 19, 1998

     Operations and Service Agreement between Erie Boulevard Hydropower L.P. and COSI Coldwater, Inc dated July 28, 1999

(xi) None

(xii) None

(xiii) Collective Bargaining Agreement between Orion Power Operating Services Coldwater, Inc. and Local Union 97 dated February 8, 2001

(xiv) First Amended and Restated Agreement of Limited Partnership of Erie Boulevard Hydropower, L.P. dated April 19, 2000

     Second Amended and Restated Agreement of Limited Partnership of Carr Street Generating Station, L.P. dated April 19, 2000

(xv) Lease Agreement between East Syracuse Generating Company L.P. and Merola Family Partnership as amended by Modification dated January 15, 1992, as further amended by Modification No. 2 dated November 19, 1998

     Lease Agreement (Greenfield Office) between Orion Power Holdings, Inc. and The Edgewater Salina Company, LLC dated March 1, 1999

23

     Lease Agreement (Medina) between Erie Boulevard Hydropower L.P. and Lake Plains YMCA dated August 1, 1999 and extended April 1, 2003

     Lease Agreement (Potsdam) between Erie Boulevard Hydropower L.P. and Mark Purcell dated November 11, 1999

     Lease Agreement (Glenn Falls) between Erie Boulevard Hydropower L.P. and Joseph & Debra Gross dated December 31, 1999

     Lease Agreement (Graymont) between Erie Boulevard Hydropower L.P. and Graystone Materials, Inc. dated February 15, 2000

     Fulton and Medina Hydroelectric Facilities State of New York Department of Environmental Conservation Consent Order dated April 21, 2000

     Feeder Dam State of New York Department of Environmental Conservation Consent Order dated April 21, 2000

     Lease Agreement (Watertown) between Erie Boulevard Hydropower L.P. and Watertown Industrial Center Local Development Corporation dated November 21, 2000

     Feeder Dam Surplus Water Agreement

     Hudson River-Black River Regulating District Stillwater Reservoir Agreement between Erie Boulevard Hydropower L.P. and Hudson River-Black River Regulating District dated July 1, 2003

     Reservoir Operating Agreement (EJ West Hydro / Sacandaga and Hudson Rivers) between Erie Boulevard Hydropower, L.P. and the Hudson River — Black River Regulating District dated July 1, 2003

     High Dam Service Agreement (Glens Falls Feeder) between Orion Power Operating Services Coldwater, Inc. and City of Oswego dated December 19, 2003

(xvi) None

(xvii) Asset Sale Agreement between Niagara Mohawk Power Corporation and Erie Boulevard Hydropower, LP dated December 12, 1998

     Asset Purchase Agreement between East Syracuse Generating Company and Carr Street Generating Station, LP dated June 23, 1998

     Asset Purchase Agreement between Erie Boulevard Hydropower, L.P. and Newton Falls Holdings, LLC dated March 26, 2002 (as assigned to OPNY GP II)

(xviii) Collective Bargaining Agreement between Orion Power Operating Services Coldwater, Inc. and Local Union 97 dated February 8, 2001

(xix) None

24

Schedule 4.09
Taxes

4.09(b)

Empire Zone Credits claimed on Erie’s and Carr Street’s 2002 New York State income tax returns are currently under review by the New York State Department of Taxation and Finance. This review process is consistent with the review being undertaken by the Department of Taxation and Finance of all entities claiming real estate property tax credits under the Empire Zone Program.

4.09(e)
Tax Returns Provided

Carr Street Generating Station, L.P.

Federal Forms 1065 for tax years 3/10/98-12/31/98 and 1999 through 2002
New York State Forms IT-204 for tax years 2001 through 2002

Erie Boulevard Hydropower, L.P.

Federal Forms 1065 for tax years 7/26/99 — 12/31/99 and 2000 through 2002
New York State Forms IT-204 for tax years 2001 through 2002

Orion Power New York GP II, Inc.

Proforma Federal 1120 for tax year 2002

OPOS Coldwater, Inc.

Proforma Federal 1120 for tax years 2001 and 2002

OPOS Carr Street, Inc.

Proforma Federal 1120 for tax years 2001 and 2002

Audit Reports — Exceptions

Carr Street Generating LP — 1999 — No Change Report

Tax Audits — Exceptions

Carr Street Generating LP — 1999
Review of New York Empire Zone Credits — 2001— completed, no significant changes
Review of New York Empire Zone Credits — 2002 — pending

Section 4.09(j)

Orion Power Operating Services Carr Street, Inc., Orion Power Operating Services Coldwater, Inc. and Orion Power GP II, Inc. were members of another consolidated group

4.09(j)

Orion Power Operating Services Carr Street, Inc., Orion Power Operating Services Coldwater, Inc. and Orion Power GP II, Inc. were members of another consolidated group.

25

4.09(k)

Power of attorney in favor of Deloitte & Touche on behalf of Erie Boulevard Hydropower, LP form 3115 for the tax year 2/20/2002 — 12/31/02.

26

Schedule 4.10(a)
Employee Benefit Plans; ERISA

Company Plans

Erie Boulevard Hydropower, LP Pension Plan

Local 97 Incentive Plan — Memorandum of Understanding between Reliant Energy East Region and IBEW Local 97 (May 7, 2003)

Local 97 Vacation — Agreement Between Orion Power Operating Services Coldwater, Inc. and Local Union 97 (February 8, 2001)

Nonunion Vacation — Reliant Resources Employee Time Off and Retiree Program Brief Summary 2003 for Non-Represented, Non Transitional Employees Hired After 7/29/99 and Reliant Resources Employee Time Off and Retiree Program Brief Summary for Non-Represented Employees Transitional From Niagara Mohawk Hired Before 7/29/99.

Local 97 Sick Leave — Memorandum of Understanding between Reliant Energy East Region and IBEW Local 97 (May 7, 2003)

Non union Sick Leave — Reliant Resources Employee Time Off and Retiree Program Brief Summary 2003 for Non-Represented, Non Transitional Employees Hired After 7/29/99 and Reliant Resources Employee Time Off and Retiree Program Brief Summary 2003 For Non-Represented Employees Transitional From Niagara Mohawk Hired Before 7/29/99.

Local 97 Educational Assistance — Agreement Between Orion Power Operating Services Coldwater, Inc. and Local Union 97 (February 8, 2001)

Disability Retirement and Separation Allowance Plan

Seller Plans sponsored, maintained or contributed to by a Company

401(k) Plans

Orion Power Holdings, Inc. 401(k) Savings Plan

Reliant Resources, Inc. Union Savings Plan

Severance Plans

Reliant Resources, Inc. 2003 Involuntary Severance Benefits Plan for Employees With Annual Base Pay Less Than $150,000 As Amended and Restated Effective January 9, 2004

Reliant Resources, Inc. 2003 Involuntary Severance Benefits Plan for Employees With Annual Base Pay At Least $150,000 But Less Than $200,000 As Amended and Restated Effective January 9, 2004

27

Reliant Resources, Inc. 2003 Involuntary Severance Benefits Plan for Employees With Annual Base Pay $200,000 and Above As Amended and Restated Effective January 9, 2004

Health and Welfare Plans

Reliant Resources, Inc. Group Welfare Benefits Plan — See attached for vendors and eligible groups.

Incentive Plans

Reliant Resources, Inc. Annual Incentive Compensation Plan

Reliant Resources, Inc. 2002 Long-Term Incentive Plan

Reliant Resources, Inc. 2002 Stock Plan

Non-Union Education Assistance

Reliant Energy Health and Welfare Benefit and Financial Security Plans

28

Schedule 4.10(a) — Attachment

Plan/Vendor	Plan Type	Covered Employees	Funding
MEDICAL
Capital District Physician’s Health Plan HMO (CDPHP	HMO	Local 97	Fully insured
CareFirst BCBS	Comp Plan (90/10	Local 97	Self Insured
	PPO Plan 8 ($20 Co-pay)	Non Bargaining, Local 97	Self insured
	PPO Plan 4 ($1,000 Ded)	Non Bargaining	Self insured
Excellus HMO (Formerly BCBS or Central NY)	HMO	Local 97	Fully insured
MENTAL HEALTH
Magellen	Managed Mental Health	Non Bargaining Local 97	Self insured
EAP		Non Bargaining	Self insured
PRESCRIPTION
Advanced PCS	Prescription Drugs — policy 5109	Non Bargaining, Local 97	Self insured
DENTAL
Delta Dental	PPO	Non Bargaining	Self insured
	Gold/Silver	Local 97	Self insured
VISION
Vision Service Plan	VSP PPO	Non Bargaining	Self insured
	VSP Discount Plan	Local 97	Self insured
WELFARE
Cigna — Life, AD&D, BTA, State Disability	Life- Basic	Non Bargaining — 1X up to $300,000	Full insured
		Local 97 — Plan A§ = 1.5 X or Plan B** = 2.5 up to $200,000, includes disability benefit
	AD&D — Basic	Local 97 — Plan A = 1.5 X or Plan B = 2.5	Full insured
	BTA	Non Bargaining — $200,000 Local 97	Full insured
	State Disability	Non Bargaining Local 97	Full insured
UNUM — LTD	LTD	Non Bargaining Local 97 (EE w/hire date after 2/8/01)	Full insured
Self-insured	LTD	Local 97 (EE w/hire date after 2/8/01 or before)	Self-insured/pension benefit
ADMINISTRATION
Synhrgy	Benefits Service Center 713-207-7373 800-932-7444	Non Bargaining Local 97
OTHER
Section 125 Plan	Pretax deductions. FSA’s — dependent and medical	Non Bargaining	$5,000 dependent $3,000 health
		Local 97	$5,000 dependent $2,500 health

§	This plan only applies to employees who were hired prior to 10/1/84 and elected this plan when initially eligible and have maintained their enrollment
**	Employees hired on or after 2/8/01

29

Schedule 4.10(c)
Employee Benefit Matters

As a result of an error by the plan’s actuary, a required contribution for approximately $194,000 to the Retirement Plan that was due on September 15, 2002, was not made until January of 2003. Seller or an Affiliate of Seller filed Form 10 (Notice of Reportable Events) with the PBGC and Form 5330 with the IRS. Neither the PBGC nor the IRS imposed any additional penalties or took any further action.

30

Schedule 4.12
Environmental Matters

The environmental conditions disclosed in the documents listed on this Schedule are incorporated herein by reference.

1.	The School Street Station has a Consent Order relating to remediation. This Consent Order was issued to Niagara Mohawk. There is a Memorandum of Understanding between NiMo and Erie that requires Erie to be responsible for all cleanup costs and other liabilities associated with the Consent Order.
2.	The Ephratah Station has received four citations from the NYSDEC related to excessive pond drawdown.
3.	The Chasm Falls Hydro Station received an Order on Consent for failure to properly distribute Copies 3 and 4 of a Hazardous Waste Manifest. The Order must be signed and returned along with the penalty payment of $1,000 by no later than May 4, 2004.
4.	The Carr Street Generating Station received a letter from the U.S. Environmental Protection Agency stating that units A and B exceeded emissions for sulfur dioxide in 2001, as neither unit held any sulfur dioxide allowances in their accounts as of March 1, 2002. In accordance with 40 CFR Section 77.6 of the Acid Rain Program regulations, the penalty to be paid is $5,548. Payment of this amount is due by May 29, 2004.
5.	Phase II Environmental Site Assessments prepared by Fluor Daniel GTI in September 1999 for the following hydropower sites: Beardslee, Belfort, Bennetts Bridge, Blake Falls, Colton, Deferiet, E.J. West, Ephratah, Flat Rock, Granby, Hannawa Falls, Hydraulic Race, Inghams Mills, Mechanicville, Norfolk, Norwood, Piercefield, Rainbow Falls, Raymondville, School Street, Sherman Island, South Edwards, Spier Falls, Stuyvesant Falls and Trenton Falls.
6.	Independent Technical Review, Orion Power Hydro Projects (NY) July 1999, Stone & Webster Management Consultants, Inc.
7.	Independent Technical Review, Orion Power New York, LP Hydroelectric Assets September 4, 2002, Stone & Webster Consultants, Inc.
8.	Independent Technical Review, Orion Power New York, LP Thermal Assets, September 4, 2002, Stone & Webster Consultants, Inc.
9.	Commerce and Industry Insurance Company Pollution Legal Liability Select Insurance Policy No. 808 67 02
10.	Environmental Site Assessment, East Syracuse Generating Plant (n/k/a Carr Street Generating Station), conducted by Dames & Moore for Orion Power Holdings, Inc. on April 23, 1998.

31

11.	Phase I Site Assessment, A&R Industrial, prepared for U.S. Generating Company, Syracuse New York, by Galson Consulting, January 1999.
12.	Independent Engineer’s Report (Assessment of East Syracuse Generating Station n/k/a Carr Street Generating Station) by Aptech Engineering dated April 1998.
13.	Under the terms of the Asset Sale Agreement between Niagara Mohawk Power Corporation (“NiMo”) and Erie Boulevard Hydropower, L.P. dated December 12, 1998, NiMo retained all liability relating to the release of 14,000 cubic yards of sand in 1997 at the Chasm Falls Hydroelectric Facility. On September 1, 2000, NiMo entered into a Consent Decree with the New York State Department of Environmental Conservation (“NYSDEC”) requiring NiMo to, among other things, develop and implement an NYSDEC-approved long-term Sediment Management Plan (“SMP”). In November 2000, NiMo submitted an SMP to the NYSDEC, and the NYSDEC subsequently raised a number of questions regarding the SMP. NiMo has since responded to those questions, and on April 1,2004 a final draft SMP was submitted to the New York State Attorney General’s Office. NiMo is currently awaiting a response.
14.	NYSDEC Spill Number 0401049 — Beardslee Hydro, East Canada Creek. On April 29, 2004, there was a spill of less than one gallon of non-PCB oil from the residual oil in the basement of the Beardslee Hydro, affecting the tailrace area of the facility.
15.	NYSDEC Spill Number 0401119 — Inghams Hydro, East Canada Creek. On May 2, 2004, there was a spill of approximately one to two gallons of non-PCB oil from the residual oil in the basement of the Inghams Hydro, affecting the tailrace of the facility.
16.	NYSDEC Spill Number 0401322 — Soft Maple Hydro, Beaver River. On May 7, 2004, there was a spill of less than one gallon of non-PCB oil from the Unit 1 wheel pit at the Soft Maple Hydro, affecting the tailrace of the facility.

32

Schedule 4.13
Intellectual Property

None.

33

Schedule 4.15
Tangible Personal Property

Those computer systems and related hardware and software for enterprise-wide functions, including financial accounting, accounts payable, purchasing, work management, materials management, cash management, logistics, scheduling and energy trading that are owned or held by Seller or a Non-Company Affiliate or Affiliates (including the items listed on Section 4.13 of the Seller’s Disclosure Schedule), excluding (i) the hardware and computer systems that are located at the Facilities, (ii) software that is licensed to Erie, Carr Street or OPNY GP II, and (iii) the software listed below:

• NY Bidding Spreadsheet

• NY Bid Tool

• NY Settlements Tool

• Common Plant Historian or Plant Information

• Coned supplied application

• HydroTelegyr EMS

• Projectwise (Cadd drawing check in and check out system)

• LaserFiche (document management system)

• Microstation (versions 7 and 8)and a couple of AutoCad licenses.

• RTA Fleet for fleet management

• A proprietary program written for us to help manage our property taxes.

• Scanning software for wide-format scanners

• Autovue

• Powerchute software,

• Veritas BackupExec

• OpenManage

• CoStar labelwriter for a desktop label printer

• Mapping (geographic) software.

• CD burning software

• MS FrontPage, Project, Visio, and Publisher

The licenses for the following software used by the Company are held by a Non-Company

Affiliate:

ABB Ranger
Trader.ems
Fuels Management System
Commercial Operations & Support
Air Bulk Sampling System
ATRisk
“Comprehensive Allowance Management System”
Capital Project Management System
Employee Training & Certification System
GenFuel Tracking
GenFuel — labvantage — interface
Mobile Maintenance Services System
PAXiT
Plantware 32
Primavera

Process Mapping Application

34

CTAM Web
Drawings Index
EGIS
EGIS Portal
EROWeb
Engineering Status (Project Management System)
Generation Performance and Reliability
Miss Opportunity Revenue
Outage Scheduling System
Outage Scheduling Optimization
Root Cause Analysis
SharePoint Document Management System
Station / Unit Information
RedTag
IFIX & PI Data Feeds (ODBC)
CT Scheduling Rate Program
Dispatch Simulator
Station Planning & Opportunity Tool
Weather Scraper
Allowance Tracking Workstation
Contractor Time and Material
SCT Banner Fuels System
Tool Hound
Welders Qualification System (WQS)
PJM Bid Tool
SAP
MS Office

35

Schedule 4.16
Real Property

1.	Stuyvesant Falls Hydro Corporation v. Erie Boulevard Hydropower, L.P.
2.	Town of Moreau has threatened to condemn property at the Spier Falls, Feeder Dam and Sherman Island Facilities
3.	At Bennett’s Bridge reservoir (which provides storage to Bennett’s Bridge and Lighthouse Hill), a number of camps have been constructed below the high water line at Noble Shores.

36

Schedule 4.17
Good Operating Practices

None.

37

Schedule 4.19
Sufficiency

1.	Terminated Contracts.
2.	Enterprise wide functions including tax services, financial accounting, legal, treasury, purchasing, information technology, human resources and risk management.
3.	Insurance coverage.
4.	Those Permits the transfer of which requires Consent which has not been obtained or with respect to which this transaction requires a replacement Permit.
5.	Seller Marks.
6.	The software listed on Schedule 4.15, the license to which is held by a Non-Company Affiliate.

38

Schedule 4.21 — Banks

Company Name	Bank Name	Account Number	Account Name	Location	Signers
Erie Blvd.	Bank of America	3751356110	Revenue	Dallas, TX	Dan Hannon
					William S. Waller, Jr.
					Lloyd Whittington
Erie Blvd.	Bank of America	3751356149	Operating	Dallas, TX	Dan Hannon
					William S. Waller, Jr.
					Lloyd Whittington
Erie Blvd.	Bank of America	3299787236	Controlled Disbursement	Dallas, TX	Dan Hannon
					William S. Waller, Jr.
					Lloyd Whittington
Carr Street Generating	Bank of America	3751356123	Revenue	Dallas, TX	Dan Hannon
					William S. Waller, Jr.
					Lloyd Whittington
Carr Street Generating	Bank of America	3751356152	Operating	Dallas, TX	Dan Hannon
					William S. Waller, Jr.
					Lloyd Whittington
Carr Street Generating	Bank of America	3299787194	Controlled Disbursement	Dallas, TX	Dan Hannon
					William S. Waller, Jr.
					Lloyd Whittington
Orion Power Operating Services	Bank of America	3751517807	General Fund	Dallas, TX	Dan Hannon
Coldwate					William S. Waller, Jr.
					Lloyd Whittington
Orion Power Operating Services	Bank of America	3299787269	Controlled Disbursement	Dallas, TX	Dan Hannon
Coldwater					William S. Waller, Jr.
					Lloyd Whittington
Orion Power Operating Services	Bank of America	3751517849	General Fund	Dallas, TX	Dan Hannon
Carr Street					William S. Waller, Jr.
					Lloyd Whittington
Orion Power Operating Services	Bank of America	3299787186	Controlled Disbursement	Dallas, TX	Dan Hannon
Carr Street					William S. Waller, Jr.
					Lloyd Whittington
Orion Power New York GP II, Inc.	Mellon Bank	119-3289	General Fund	Pittsburgh, PA	Dan Hannon
					William S. Waller, Jr.
					Lloyd Whittington
Orion Power New York GP II, Inc.	Mellon Bank	119-3297	Controlled Disbursement	Pittsburgh, PA	Dan Hannon
					William S. Waller, Jr.
					Lloyd Whittington

* Note: William S. Waller, Jr., will be leaving effective June 30, 2004, and will be replaced by another authorized signer.

39

Schedule 4.21
Banks

1. Powers of attorney granted in connection with the following:

(a) (i) the Amended and Restated Credit Agreement, dated as of October 28, 2002, among Orion Power New York, L.P., as Borrower, Banc of America Securities LLC and BNP Paribas, as Lead Arrangers and Joint Book Runners, the lenders party thereto, and Bank of America, N.A., as Issuing Bank and as Administrative Agent, as amended to date, (b) the “Financing Documents” as defined therein or executed pursuant thereto and as amended to date, and (c) any of the “Credit Parties’” (as defined therein) organizational documents.

(b) (i) the Second Amended and Restated Credit Agreement dated October 28, 2002, among Orion Power Midwest, L.P., as Borrower, Banc of America Securities LLC and BNP Paribas, as Lead Arrangers and Joint Book Runners, the lenders parties thereto, Bank of America, N.A., as Issuing Bank and Administrative Agent, as amended to date, and (ii) the “Financing Documents” as defined therein or executed pursuant thereto and as amended to date.

(c) (i) the Amended and Restated Credit and Guaranty Agreement, dated as of March 28, 2003, by and among Reliant Energy, Inc. and the other Credit Parties referred to therein; the Lenders referred to therein; Bank of America, N.A., as Administrative Agent, as Collateral Agent, and as an Issuing Bank; and Barclays Bank, PLC and Deutsche Bank AG, New York Branch, as syndication agents for the Lenders, as amended to date and (ii) the “Fundamental Documents” as defined therein or executed pursuant thereto and as amended to date.

2. Power of Attorney in favor of Orion Power New York G.P. Inc. on behalf of Erie Boulevard Hydropower, L.P.

3. Power of Attorney in favor of Orion Power New York G.P. Inc. on behalf of Carr Street Generating Station, L.P.

40

Schedule 5.03(c)
Buyer Governmental Approvals

1. Federal Energy Regulatory Commission Approvals (“FERC”)

     Application for the transfer of control of assets under Section 203 of the FPA.

     Notice of Change in Status regarding Erie Boulevard Hydropower, LP’s market-based rate authorization pursuant to Section 205 of the FPA (FERC Docket No. ER99-1764-000).

     Notice of Change in Status regarding Orion Power New York GP, II Inc.’s market-based rate authorization pursuant to Section 205 of the FPA (FERC Docket No. ER02-2435-000).

     Notice of Change in Status regarding Carr Street Generating Station, LP’s market-based rate authorization pursuant to Section 205 of the FPA (FERC Docket No. ER98-4095-000).

     Notice of Change in Exempt Wholesale Generator Status or New Application for Exempt Wholesale Generator Status for Erie Boulevard Hydropower, LP (FERC Docket No. EG99-156-000).

     Notice of Change in Exempt Wholesale Generator Status or New Application for Exempt Wholesale Generator Status for Orion Power New York GP, II (FERC Docket No. EG02-178-000).

     Notice of Change in Exempt Wholesale Generator Status or New Application for Exempt Wholesale Generator Status for Carr Street Generating Station, LP (FERC Docket No. EG98-101-000).

     Notice of Change in Exempt Wholesale Generator Status or New Application for Exempt Wholesale Generator Status for COSI Coldwater Inc. (FERC Docket No. EG99-204-000).

     Notice of Change in Exempt Wholesale Generator Status or New Application for Exempt Wholesale Generator Status for Orion Power Operating Services Carr Street, Inc. (FERC Docket No. EG99-205-000).

2. New York Public Service Commission Approvals (“NYPSC”)

     Application for “lightened regulation” approving the transaction pursuant to § 70 of the New York Public Service Law.

     Application seeking authorization of the transaction pursuant to § 69 of the New York Public Service Law if stocks, bonds or other forms of indebtedness are issued in order to pay for the acquisition.

3. Hart-Scott-Rodino Act

     Applicable requirements under the HSR Act.

41

Schedule 6.02
Certain Permitted Actions

1. OPNY Corporate Reorganization

At Seller’s election, OPNY GP II may be converted to a limited liability company, in which event the membership interests of which shall be contributed to Erie. In connection with such reorganization, OPNY GP II may grant a lien on its membership interests and issue a guaranty to the OPNY LP and Orion Power MidWest, L.P. lenders.

2. OPOS Corporate Reorganization

At Seller’s election, OPOS Carr Street and OPOS Coldwater may each be converted into limited liability companies, in which event the membership interests of such limited liability companies shall be contributed to Carr Street and Erie, respectively. In connection with such reorganization, OPOS Carr Street and OPOS Coldwater may each grant liens on their membership interests and issue guaranties to the OPNY LP and Orion Power MidWest, L.P. lenders.

3. Negotiation and, subject to OPNY lender approval, execution of an Operating Agreement for Motoring and Control Center Communications between Erie and Niagara Mohawk substantially in accordance with the Memorandum of Understanding with respect thereto dated March 16, 2001.

4. Negotiation and, subject to OPNY lender approval, execution of a Facilities Services Agreement between Erie and OPOS Coldwater.

42

Schedule 6.02(b)(iv)
Permitted Capital Expenditures

	2004		2005
Capital Expenditures*	$	11,356,000	$	15,656,000

* Excludes any amount expensed pursuant to the Company’s capitalization policy.

43

Schedule 6.02(b)(iv)
Permitted Capital Expenditures

Capital Expenditure Detail — 2004 to 2005

Basin	ProjectName	2004		2005
EBH	EBH EBH Vehicle Replacements
	EBH New RTU Installation (Post PPA Preparation)
	EBH River Dispatch Optimization Tool
	EBH River Radio Communication System
EBH Total			2,907,300		756,800
Hudson	Hudson Beardslee Replace Relay/control panel
	Hudson EJ West RTU
	Hudson EJ West Tail Race Gates (Stop Logs)
	Hudson EPHRATA Auto Start Stop
	Hudson Feeder Auto Start Stop
	Hudson Feeder Trashracks & fish handling
	Hudson INGHAMS Auto Start Stop
	Hudson Johnsonville Auto Start Stop
	Hudson Johnsonville Fish Protection Measure
	Hudson Schaghticoke Auto Start Stop
	Hudson Schaghticoke Pneumatic Flashoboards
	Hudson Schaghticoke RTU
	Hudson School Street Auto Start Stop
	Hudson School Street Canal intake gates & structure
	Hudson School Street Downstream Fish Conveyance
	Hudson School Street Recreation & Public Enhancements
	Hudson School Street Trash racks
	Hudson Schuyerville auto start stop
	Hudson Sherman Island Bypass structure (New Small Dam)
	Hudson Sherman Island RTU
	Hudson Sherman Island Rubber dam New
	Hudson Sherman Island Unit 2 Rewind
	Hudson Sherman Island Unit 3 Rewind
	Hudson Spier Falls New RTU
	Hudson Spier Falls Unit 9 rewind
	Hudson Testing Equipment
Hudson Total			4,583,847		11,062,700
Ontario	Ontario Beebee Island Car-Top Boat Launch (New Recreation)
	Ontario Beebee Island Trashracks
	Ontario Belfort New Auto start/stop system
	Ontario Bennetts Bridge Powerhouse Lighting
	Ontario Bennetts Bridge auto stop start
	Ontario Black River Canal Headgates
	Ontario Eagle Falls New Auto Start/Stop system
	Ontario Eagle Falls Remote Terminal Unit replacement
	Ontario Effley Generator Rewinds Unit 1
	Ontario Effley New Auto start/stop system one unit
	Ontario Effley Penstocks (>10ft/>4”)
	Ontario Elmer New Auto start/stop system one unit
	Ontario Elmer New SCADA system

44

Capital Expenditure Detail — 2004 to 2005

Basin	ProjectName	2004		2005
	Ontario Fulton Auto Start Stop
	Ontario Fulton Fish passage, trashracks, min.flow
	Ontario Glenwood Rewind Unit # 3
	Ontario Grandby Trash rake
	Ontario High Falls Gen. Rewind U1
	Ontario High Falls Gen. Rewind U2
	Ontario High Falls New Auto Start/Stop System
	Ontario Lighthouse Battery Replacement
	Ontario Minetto Rewind Generator U1
	Ontario Minetto Trashrack replace in 2 bays
	Ontario Moshier RTU replacement
	Ontario Oswego Falls E. Generator Rewinds Unit 2
	Ontario Oswego Falls E. Generator Rewinds Unit 3
	Ontario Oswego Falls East New Auto Start System
	Ontario Oswego Falls W. 1” Trashracks
	Ontario Sewalls New Auto Start System
	Ontario Taylorville New Auto Start/Stop System
	Ontario Trenton New Recreation Facility
	Ontario Varick Auto Stop Start
	Ontario Varick Bypass enhancement New Small Dam
	Ontario Varick Eel passage
	Ontario Varick Trash Rake
	Ontario Waterport Headgate Operators
Ontario Total			1,421,201		1,586,200
St. Lawrence	St Lawrence Higley Redevelopment (Under Construction 2002)
	St. Lawrence Allens Falls Auto Start Stop
	St. Lawrence Blake Recreation (2005) (new)
	St. Lawrence Browns Falls Rewind #1 Generator
	St. Lawrence Browns Falls Rewind #2 Generator & Runner
	Replacement
	St. Lawrence Carry Falls Recreation (2005) (New)
	St. Lawrence Colton 1 Runner Replacement
	St. Lawrence Colton Recreation (2004) (New)
	St. Lawrence Colton Replace Oil System (Pressure
	Governor/Control)
	St. Lawrence East Norfolk Recreation (2005) (New)
	St. Lawrence East Norfolk Tainter Gate Repairs
	St. Lawrence Eel Weir auto stop start
	St. Lawrence Five Falls Fish Passage (2004) Conveyance
	St. Lawrence Five Falls Recreation (2005) (New)
	St. Lawrence Flat Rock auto stop start
	St. Lawrence Franklin Falls Rewind #2 Generator
	St. Lawrence Hannawa auto start stop
	St. Lawrence Hannawa Dike New Drainage System
	St. Lawrence Hannawa Recreation (2004) (New)
	St. Lawrence Heuvelton Auto Stop Start
	St. Lawrence Higley Replace Broom (Tainter) Gate
	St. Lawrence MACOMB Auto Stop Start
	St. Lawrence Norfolk Fish Protection (2004) Trash Rack
	St. Lawrence Norfolk Recreation (2005) (New)
	St. Lawrence Norwood Recreation (2005) (New)

45

Capital Expenditure Detail — 2004 to 2005

Basin	ProjectName	2004		2005
	St. Lawrence Parishville Auto Stop Start
	St. Lawrence Piercefield 1 St. Lawrence Batt — 2004
	St. Lawrence Piercefield 1 St. Lawrence Batt — 2005
	St. Lawrence Piercefield Auto Stop Start
	St. Lawrence Piercefield Rewind #2 Generator
	St. Lawrence Rainbow Fish Passage (2005) Conveyance
	St. Lawrence Rainbow Recreation (2005) (New)
	St. Lawrence Raymondville Recreation (2005) (New)
	St. Lawrence South Colton Fish Passage (2004) Conveyance
	St. Lawrence South Colton Recreation (2005) (New)
	St. Lawrence SOUTH EDWARDS auto stop start
	St. Lawrence Stark 1 GSU Transformer Replace
	St. Lawrence Stark Recreation (2005) (New)
	St. Lawrence Sugar Island auto Stop Start
	St. Lawrence Sugar Island Recreation (2004) New
	St. Lawrence Sugar Island Rewind #1 Generator
	St. Lawrence Newton Falls Lower auto stop start
	St. Lawrence Newton Falls Upper auto stop start
	St. Lawrence Newton Falls Other
St. Lawrence Total			2,355,058		2,222,323
Carr Street	Carr Street Capex
Carr Street Total			88,000		27,500

46

Schedule 6.05(a)
Support Obligations

Cash Collateral
Niagara Mohawk	$	400,092

Letter of credit issued to Liberty Mutual securing $8,750 surety bond posted to NYSDEC.

Letters of credit issued to secure payment obligations under Material Contracts, but in no event to exceed $15,000,000 in the aggregate.

47

Schedule 6.06
Excluded Assets

None.

48

Schedule 6.07
Terminated Contracts

1.	Netting Agreement among Reliant Energy Services, Inc., Carr Street Generating Station, LP, Erie Boulevard Hydropower, LP, Astoria Generating Company, LP and Orion Power New York, LP dated October 28, 2002*
2.	RES Services Agreement among Reliant Energy Services, Inc., Carr Street Generating Station, LP, Erie Boulevard Hydropower, LP, Astoria Generating Company, LP and Orion Power New York, LP dated October 28, 2002*
3.	REWS Services Agreement among Reliant Energy Wholesale Services Company, Erie Boulevard Hydropower, LP, Carr Street Generating Station, LP, Astoria Generating Company, LP and Orion Power New York, LP dated October 28, 2002*
4.	Base Contract for Sale and Purchase of Natural Gas (NAESB) between Reliant Energy Services, Inc. and Carr Street Generating Station, LP dated December 1, 2003
5.	Tax Sharing Agreement dated effective as of October 1, 2002, by and among Reliant Resources, Inc., and each other affiliated entity listed on Schedule A thereto.**

*	To be terminated as to Erie and Carr Street only
**	To be terminated as to OPNY GPII, OPOS Coldwater and OPOS Carr Street only

49

Schedule 6.13(c)
Affiliate Employees

Linda Becker	—	Human Resources Manager
Amy Brown	—	Technical Analyst I
Frank Carello	—	Sourcing Specialist Staff
Robert Easterly	—	Tax Manager I
Dimitrios Mihou	—	Safety Representative IV
Ernie Pichette	—	Technical Analyst III

50

Schedule 7.01(c)
Company Lien Release Consents

1. Consents necessary to effect the Closing under (a) the Amended and Restated Credit Agreement, dated as of October 28, 2002, among Orion Power New York, L.P., as Borrower, Banc of America Securities LLC and BNP Paribas, as Lead Arrangers and Joint Book Runners, the lenders party thereto, and Bank of America, N.A., as Issuing Bank and as Administrative Agent, as amended to date, (b) the “Financing Documents” as defined therein or executed pursuant thereto and as amended to date, and (c) any of the “Credit Parties’” (as defined therein) organizational documents.

2. Consents necessary to effect the Closing under (i) the Second Amended and Restated Credit Agreement dated October 28, 2002, among Orion Power Midwest, L.P., as Borrower, Banc of America Securities LLC and BNP Paribas, as Lead Arrangers and Joint Book Runners, the lenders parties thereto, Bank of America, N.A., as Issuing Bank and Administrative Agent, as amended to date, and (ii) the “Financing Documents” as defined therein or executed pursuant thereto and as amended to date.

3. Consents necessary, if any, to effect the Closing under (i) the Amended and Restated Credit and Guaranty Agreement, dated as of March 28, 2003, by and among Reliant Energy, Inc. and the other Credit Parties referred to therein; the Lenders referred to therein; Bank of America, N.A., as Administrative Agent, as Collateral Agent, and as an Issuing Bank; and Barclays Bank, PLC and Deutsche Bank AG, New York Branch, as syndication agents for the Lenders, as amended to date and (ii) the “Fundamental Documents” as defined therein or executed pursuant thereto and as amended to date.

51

Schedule I-1
Seller’s Knowledge

Mark Sudbey	—	Senior Vice President
Dan Hannon	—	Senior Vice President, Finance and Corporate Development
Glenn Camus	—	Assistant Secretary
Dave Youlen	—	Managing Director — Hydro
Andrew Johannesen	—	Director, Corporate Development
Vince Cegielski	—	Director — Generation Operations Accounting
Walter “Fred” McGuire	—	Vice President, Environmental, Safety and Industrial Health
Mike Fredell	—	Director, State and Property Tax

52

Schedule I-2
Buyer’s Knowledge

Harry Goldgut	—	Co-Chairman and Chief Executive Officer
Richard Legault	—	President and Chief Operating Officer
Colin Clark	—	Executive Vice President and Chief Technical Officer
Carlos Felipe M. Pinel	—	Director, Corporate Planning and Development
Michel Beaudin	—	Vice President, Corporate Development

53

EX-10.48.B

Exhibit 10.48B

EXHIBIT A

FORM OF ASSIGNMENT OF PARTNERSHIP INTEREST

     This ASSIGNMENT OF PARTNERSHIP INTEREST (this “Assignment”), effective as of                           , 2005, is between ORION POWER NEW YORK, L.P., a Delaware limited partnership (“Assignor”), and ASTORIA GENERATING COMPANY ACQUISITIONS, L.L.C., a Delaware limited liability company (“Assignee”).

RECITALS

     A. Orion Power Holdings, Inc., Reliant Energy, Inc. and Assignee entered into a Purchase and Sale Agreement dated as of September 30, 2005 (the “PSA”).

     B. Contemporaneously with the execution of this Assignment, Orion Power New York GP, Inc., a Delaware corporation (“OPNY GP”), has executed an assignment of the 1% general partnership interest currently owned by OPNY GP in Astoria Generating Company, L.P. to Astoria Generating Company GP, Inc., a Delaware corporation, pursuant to that certain Assignment of Partnership Interest dated of even date herewith (the “GP Assignment”).

     C. To effect the sale and purchase of the Astoria LP Partnership Interest (as defined below) and to satisfy the requirement set forth in Section 2.04(a) of the PSA, Assignor and Assignee are executing and delivering this Assignment.

     NOW THEREFORE, in consideration of the premises, the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee hereby act and agree as follows:

AGREEMENTS

     1. Definitions. Any capitalized term not otherwise defined herein shall have the meaning ascribed to such term in the PSA.

     2. Transfer of Astoria LP Partnership Interest. Assignor hereby sells, assigns, transfers, conveys, and delivers unto Assignee the 99% limited partnership interest currently owned by Assignor in Astoria Generating Company, L.P., a Delaware limited partnership, as more particularly described in the PSA (the “Astoria LP Partnership Interest”).

     TO HAVE AND TO HOLD the Astoria LP Partnership Interest unto Assignee, its successors and assigns, forever.

     3. Assumption of Assignee. Assignee hereby accepts the sale, assignment, transfer, conveyance and delivery of the Astoria LP Partnership Interest.

     4. Disclaimer of Warranties. NEITHER ASSIGNEE NOR ASSIGNOR MAKES ANY WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND OR NATURE EXCEPT AS EXPRESSLY SET FORTH IN THE PSA.

     5. Counterparts. This Assignment may be executed in any number of counterparts, including by facsimile or electronic transmission, and each counterpart hereof shall be deemed to be an original instrument, but all such counterparts shall constitute but one conveyance.

     6. Further Assurances. The parties hereto agree to take all such further actions and execute, acknowledge and deliver all such further documents that are necessary or useful in carrying out the purposes of this Assignment. Without limiting the foregoing, Assignor agrees, without further consideration, to execute, acknowledge and deliver to Assignee all such other additional instruments, notices, and other documents and to do all such other and further acts and things as may be necessary to more fully and effectively sell, assign, transfer, convey and deliver to Assignee the Astoria LP Partnership Interest.

     7. Governing Law; Choice of Forum; Waiver of Jury Trial. THIS ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. ANY DISPUTE OR NEED OF INTERPRETATION ARISING OUT OF THIS ASSIGNMENT SHALL BE SETTLED SOLELY IN ACCORDANCE WITH THE ARBITRATION AND DISPUTE RESOLUTION PROVISIONS OF SECTION 10.05 OF THE PSA.

     8. Successors and Assigns. This Assignment shall be binding upon and inure to the benefit of Assignor and Assignee and their respective successors and permitted assigns.

     9. Consent to GP Assignment. Assignor and Assignee both hereby consent to and authorize the assignment of the general partnership interest in Astoria Generating Company, L.P. contemplated by the GP Assignment.

[Signatures begin next page]

This Assignment is executed as of the date first above written.

ASSIGNOR:
ORION POWER NEW YORK, L.P.
By:	Orion Power New York GP, Inc., its general partner
By:
	Name:
	Title:

ASSIGNEE:
ASTORIA GENERATING COMPANY ACQUISITIONS, L.L.C.
By:
	Name:
	Title:

[Signature Page to Assignment of Partnership Interest]

EXHIBIT A

FORM OF ASSIGNMENT OF PARTNERSHIP INTEREST

     This ASSIGNMENT OF PARTNERSHIP INTEREST (this “Assignment”), effective as of                           , 2005, is between ORION POWER NEW YORK GP, INC., a Delaware corporation (“Assignor”), and ASTORIA GENERATING COMPANY GP, INC., a Delaware corporation (“Assignee”).

RECITALS

     A. Orion Power Holdings, Inc., Reliant Energy, Inc., and Astoria Generating Company Acquisitions, L.L.C. (“Buyer”) entered into a Purchase and Sale Agreement dated as of September 30, 2005 (the “PSA”).

     B. Contemporaneously with the execution of this Assignment, Orion Power New York, L.P., a Delaware limited partnership (“OPNY LP”) has executed an assignment of the 99% limited partnership interest currently owned by OPNY LP in Astoria Generating Company, L.P. to Buyer pursuant to that certain Assignment of Partnership Interest dated of even date herewith (the “LP Assignment”).

     C. To effect the sale and purchase of the Astoria LP Partnership Interest (as defined below) and to satisfy the requirement set forth in Section 2.04(a) of the PSA, Assignor and Assignee are executing and delivering this Assignment.

     NOW THEREFORE, in consideration of the premises, the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee hereby act and agree as follows:

AGREEMENTS

     1. Definitions. Any capitalized term not otherwise defined herein shall have the meaning ascribed to such term in the PSA.

     2. Transfer of Astoria GP Partnership Interest. Assignor hereby sells, assigns, transfers, conveys, and delivers unto Assignee the 1% general partnership interest currently owned by Assignor in Astoria Generating Company, L.P., a Delaware limited partnership, as more particularly described in the PSA (the “Astoria GP Partnership Interest”).

     TO HAVE AND TO HOLD the Astoria GP Partnership Interest unto Assignee, its successors and assigns, forever.

     3. Assumption of Assignee. Assignee hereby accepts the sale, assignment, transfer, conveyance and delivery of the Astoria GP Partnership Interest.

     4. Disclaimer of Warranties. NEITHER ASSIGNEE NOR ASSIGNOR MAKES ANY WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND OR NATURE EXCEPT AS EXPRESSLY SET FORTH IN THE PSA.

     5. Counterparts. This Assignment may be executed in any number of counterparts, including by facsimile or electronic transmission, and each counterpart hereof shall be deemed to be an original instrument, but all such counterparts shall constitute but one conveyance.

     6. Further Assurances. The parties hereto agree to take all such further actions and execute, acknowledge and deliver all such further documents that are necessary or useful in carrying out the purposes of this Assignment. Without limiting the foregoing, Assignor agrees, without further consideration, to execute, acknowledge and deliver to Assignee all such other additional instruments, notices, and other documents and to do all such other and further acts and things as may be necessary to more fully and effectively sell, assign, transfer, convey and deliver to Assignee the Astoria GP Partnership Interest.

     7. Governing Law; Choice of Forum; Waiver of Jury Trial. THIS ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. ANY DISPUTE OR NEED OF INTERPRETATION ARISING OUT OF THIS ASSIGNMENT SHALL BE SETTLED SOLELY IN ACCORDANCE WITH THE ARBITRATION AND DISPUTE RESOLUTION PROVISIONS OF SECTION 10.05 OF THE PSA.

     8. Successors and Assigns. This Assignment shall be binding upon and inure to the benefit of Assignor and Assignee and their respective successors and permitted assigns.

     9. Consent to LP Assignment. Assignor and Assignee both hereby consent to and authorize the assignment of the limited partnership interest in Astoria Generating Company, L.P. contemplated by the LP Assignment.

[Signatures begin next page]

2

This Assignment is executed as of the date first above written.

 ASSIGNOR:

ORION POWER NEW YORK GP, INC.
By:
	Name:
	Title:

 ASSIGNEE:

ASTORIA GENERATING COMPANY GP, INC.
By:
	Name:
	Title:

[Signature Page to Assignment of Partnership Interest]

EXHIBIT B

FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

     THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”) dated as of                           , 2005 between ORION POWER HOLDINGS, INC., a Delaware corporation (“Orion”), RELIANT ENERGY, INC., a Delaware corporation (“Reliant, and together with Orion, “Assignors”) and ASTORIA GENERATING COMPANY ACQUISITIONS, L.L.C., a Delaware limited liability company (“Assignee”).

RECITALS:

     A. Orion, Reliant and Assignee have entered into a Purchase and Sale Agreement, dated as of September 30, 2005 (the “Purchase Agreement”; capitalized terms used herein and not otherwise defined herein having the respective meanings given in the Purchase Agreement), providing for the acquisition by Assignee of the Company Interests;

     B. Pursuant to Section 2.04(c) of the Purchase Agreement, Assignors have agreed to enter into this Agreement providing for the assignment by the Assignors of the Assigned Contracts; and

     C. Pursuant to Section 2.05(b) of the Purchase Agreement, Assignee has agreed to execute this Agreement and assume the obligations under the Assigned Contracts.

     NOW, THEREFORE, for and in consideration of One Dollar and No/100 ($1.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and pursuant to the terms of the Purchase Agreement, the parties hereto agree as follows:

1.	Assignment. Assignor does hereby set over, transfer and assign to Assignee all of Assignor’s right, title and interest in, under and to the Assigned Contracts arising after the Closing Date.
2.	Acceptance and Assumption. Assignee hereby (a) purchases and accepts the assignment, transfer and conveyance of Assignor’s right, title and interests in, under and to the Assigned Contracts for which the counterparties’ consent has been obtained (to the extent required); and (b) assumes, undertakes and agrees, subject to valid claims and defenses, to pay, satisfy, perform or discharge in accordance with the terms thereof all obligations and liabilities of any kind arising out of, or required to be performed under, such Assigned Contracts from and after the Closing.
3.	Representations and Warranties. Neither the Assignors nor the Assignee are making any representations or warranties of any nature or kind with respect to the Assigned Contracts, except as expressly made and contained in the Purchase Agreement.

4.	Conflicts with Purchase Agreement. In the event that any provision of this Agreement is construed to conflict with a provision of the Purchase Agreement, the provision in the Purchase Agreement shall be deemed controlling.
5.	Parties in Interest. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.
6.	Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, including by facsimile and by electronic transmission, each of which when so executed and delivered shall be an original, and all of which together shall constitute one and the same instrument.
7.	Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of New York without giving effect to the choice of law principles thereof which would require the application of the laws of a jurisdiction other than New York.

[Signatures begin next page]

2

Dated as of the day and year first above written.

ASSIGNORS:

ORION POWER HOLDINGS, INC.
By:
	Name:
	Title:

RELIANT ENERGY, INC.
By:
	Name:
	Title:

ASSIGNEE:	ASTORIA GENERATING COMPANY ACQUISITIONS, L.L.C.
	By:
		Name:
		Title:

[Signature Page to Assignment and Assumption Agreement]

EXHIBIT C

FORM OF CONFIDENTIALITY ASSIGNMENT AND ASSUMPTION AGREEMENT

     THIS CONFIDENTIALITY ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”) dated as of                           , 2005 between RELIANT ENERGY, INC., a Delaware corporation (“Assignor”) and ASTORIA GENERATING COMPANY ACQUISITIONS, L.L.C., a Delaware limited liability company (“Assignee”).

RECITALS:

     A. Orion Power Holdings, Inc., Assignor and Assignee have entered into a Purchase and Sale Agreement, dated as of September 30, 2005 (the “Purchase Agreement”; capitalized terms used herein and not otherwise defined herein having the respective meanings given in the Purchase Agreement), providing for the acquisition by Assignee of the Purchased Assets; and

     B. Pursuant to Section 2.04(g) of the Purchase Agreement, Assignor has agreed to enter into this Agreement providing for the assignment by the Assignor of each of the confidentiality agreements executed by or on the behalf of Assignor and/or its subsidiaries in connection with the proposed sale of the Companies, to the extent assignable without consent of the counterparty (the “Assigned Confidentiality Agreements”); a complete list of the Assigned Confidentiality Agreements is set forth on Exhibit A attached hereto.

     NOW, THEREFORE, for and in consideration of One Dollar and No/100 ($1.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and pursuant to the terms of the Purchase Agreement, the parties hereto agree as follows:

1.	Assignment. Assignor does hereby set over, transfer and assign to Assignee, to the extent that such are assignable without the consent of the counterparty, all of Assignor’s right, title and interest in, under and to the Assigned Confidentiality Agreements arising after the Closing Date. Assignor is hereby delivering to Assignee true and correct copies of the Assigned Confidentiality Agreements.
2.	Acceptance and Assumption. Assignee hereby (a) purchases and accepts the assignment, transfer and conveyance, to the extent that such are assignable without the consent of the counterparty, of Assignor’s right, title and interests in, under and to the Assigned Confidentiality Agreements; and (b) assumes, undertakes and agrees, subject to valid claims and defenses, to pay, satisfy, perform or discharge in accordance with the terms thereof all obligations and liabilities of any kind arising out of, or required to be performed under, such Assigned Confidentiality Agreements from and after the Closing.
3.	Representations and Warranties. The Assignors are not making any representations or warranties of any nature or kind with respect to the Assigned Confidentiality Agreements, except as expressly made and contained in the Purchase Agreement.

4.	Conflicts with Purchase Agreement. In the event that any provision of this Agreement is construed to conflict with a provision of the Purchase Agreement, the provision in the Purchase Agreement shall be deemed controlling.
5.	Parties in Interest. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.
6.	Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, including by facsimile or electronic transmission, each of which when so executed and delivered shall be an original, and all of which together shall constitute one and the same instrument.
7.	Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of New York without giving effect to the choice of law principles thereof which would require the application of the laws of a jurisdiction other than New York.

[Signatures begin next page]

2

Dated as of the day and year first above written.

ASSIGNORS:	RELIANT ENERGY, INC.
	By:
		Name:
		Title:

ASSIGNEE:	ASTORIA GENERATING COMPANY ACQUISITIONS, L.L.C.
	By:
		Name:
		Title:

[Signature Page to Confidentiality Assignment and Assumption Agreement]

EXECUTION COPY

NEW YORK CITY PURCHASE AND SALE AGREEMENT SCHEDULES

          These are the Schedules (the “Schedules”) referred to in that certain Purchase and Sale Agreement (the “Agreement”) entered into as of September 30, 2005 by and between Orion Power Holdings, Inc., a Delaware corporation (“Seller”), Reliant Energy, Inc., a Delaware corporation (“Seller Guarantor”), and Astoria Generating Company Acquisitions, L.L.C., a Delaware limited liability company (“Buyer”), and they are subject to the terms and conditions set forth in the Agreement. Capitalized terms used but not defined herein have the respective meanings assigned to them in the Agreement.

Schedule 2.02(b)
Target Working Capital Amount

US $70,000,000

Schedule 2.04(c)
Assigned Contracts

Cartridge Filter Technology Development, License, and Assignment Agreement among Reliant Energy, Inc. (f/k/a Reliant Resources, Inc). and by its Subsidiaries, Orion Power Holdings, Inc. and Astoria Generating Company, L.P. and Gunderboom, Inc. dated April 21, 2003 (provided that such contract will not be assigned at Closing if Seller is unable to obtain the consent of Gunderboom, Inc. to such assignment).

Contract No. 4600016976 dated December 2, 2002 between Turbine Services, Limited and Reliant Energy, Inc. for the provision of combustion turbine parts (provided that such contract will not be assigned at Closing if Seller is unable to obtain the consent of Turbine Services, Limited to such assignment).

Schedule 3.03(b)
Seller Consents

Consents necessary under the Cartridge Filter Technology Development, License, and Assignment Agreement among Reliant Energy, Inc. (f/k/a Reliant Resources, Inc.) and by its Subsidiaries, Orion Power Holdings, Inc. and Astoria Generating Company, L.P. and Gunderboom, Inc. dated April 21, 2003.

Consents necessary under the Contract No. 4600016976 dated December 2, 2002 between Turbine Services, Limited and Reliant Energy, Inc. for the provision of combustion turbine parts.

Schedule 3.03(c)
Seller Governmental Approvals

1. New York State Department of Environmental Conservation (“NYSDEC”) Permits/Registrations — the following permits subject to New York Codes, Rules and Regulations Title 6 (“6 NYCRR”), Part 621 Applications for Permit Transfer will require prior notification of change in upstream equity ownership. These permits are held by Astoria Generating Company, L.P. (for a complete listing of these permits, see Schedule 3.03(c)-Attachment):

• State Pollutant Discharge Elimination System (water discharge permits)

• Title IV, Article 19 (air permits) and companion regulations at 6 NYCRR Parts 201, 203, & 215

• Title V (air permits)

• Section 401 Water Quality Certification

• Environmental Conservation Law Article 15 (stream disturbance permits)

2. New York City Fire Department (“NYCFD”) Permits/Licenses

     Notification to the NYCFD will be required prior to transfer of any permits and licenses not held in the name of Astoria Generating Company, L.P.

3. New York State Department of Public Service Approvals

     Written notice of the indirect transfer of Certificates of Environmental Compatibility and Public Need issued under Article X resulting from the sale of the partnership interests in Astoria Generating Company, L.P. must be provided to the Secretary of the Department of Public Service.

     The sale to Buyer of the partnership interests in Astoria Generating Company, L.P. is subject to the prior approval of the Public Service Commission pursuant to Public Service Law Section 70.

4. Federal Energy Regulatory Commission Approvals (“FERC”)

     Section 203 Application for transfer of ownership of the FERC jurisdictional facilities must be approved in advance by FERC.

5. Federal Communications Commission (“FCC”)

     FCC approval required for transfer of ownership or control of radio licenses.

6. New York State Office of General Services (“OGS”)

     Corrective notice to OGS relating to assignment of the easement for lands underwater to Astoria Generating Company, L.P. from Con Ed may be required.

7. NYSDEC Consent Orders

     The prior written approval of NYSDEC is required to replace Non-Company Affiliates that are consent parties (see Schedule 4.12).

8. Hart-Scott-Rodino Act

     Applicable requirements under the HSR Act

9. Securities and Exchange Commission

     Applicable requirements of the Exchange Act and the rules and regulations promulgated thereunder.

Schedule 3.03(c) — Attachment
Astoria Generating Station
ENVIRONMENTAL PERMITS, LICENSES AND REGISTRATIONS

Permitted Equipment	Permittee			Renewal/
or Activity	(Owning Company)	Agency	Permit No.	Expiration Date
Title V Permit	Astoria Generating Company, L.P.	NYSDEC	2-6301-00185/00009	November 12, 2006/ May 12, 2007
Title IV Permit	Astoria Generating Company, L.P.	NYSDEC	2-6301-0006/00067	December 6, 2007/ May 6, 2008
SPDES Permit	Astoria Generating Company, L.P.	NYSDEC	NY-000-5118	May 1, 2006/ November 1, 2006
Major Oil Storage Facility License - Generating Station and Fuel Depot	Astoria Generating Company, L.P.	NYSDEC	2-1780	January 1, 2007/ March 31, 2007
Hazardous Substance Bulk Storage Registration	Astoria Generating Company, L.P.	NYSDEC	2-000359	June 30, 2007/ July 30, 2007
Emergency Diesel Generator Serial No. 77B160 (No. 15)	Astoria Generating Company, L.P.	NYCDEP	PA049095L	August 1, 2007/ October 30, 2007
Emergency Diesel Generator Serial No. 77B161 (No. 13)	Astoria Generating Company, L.P.	NYCDEP	PA049295X	July 11, 2007/ November 11, 2007
Emergency Diesel Generator Serial No. 77B159 (No. 14)	Astoria Generating Company, L.P.	NYCDEP	PA049195Z	August 1, 2007/ October 30, 2007
Emergency Air Compressor	Astoria Generating Company, L.P.	NYCDEP	PA025597P	May 1, 2006/ August 1, 2006
Generating Station Gas Turbine No. 1	Astoria Generating Company, L.P.	NYCDEP	PA1299/72Y	January 20, 2007/ April 20, 2007
A-10 Dock Emergency Diesel Generator	Astoria Generating Company, L.P.	NYCDEP	PB421003X	May 16, 2007/ August 16, 2007
Bulk Oil Storage Generating Station and Fuel Depot	Astoria Generating Company, L.P.	NYCFD	08013948	May 2006/ August 2006
Three Electric Air Compressors	Astoria Generating Company, L.P.	NYCFD	06483630	September 2005/ December 2005
Chem Lab Storage	Reliant Energy, Inc.	NYCFD	90033432	May 2006/ August 2006
Use of Oxygen/Combustible Gases in Blowpipe; Lube Oil Storage Tanks	Astoria Generating Company, L.P.	NYCFD	06483648	September 2005/ December 2005
Fuel Oil Depot Air Conditioning Permit	Astoria Generating Company, L.P.	NYCFD	99039380	September 2005/ December 2005
Air Conditioning Permit	Astoria Generating Company, L.P.	NYCFD	99039364	September 2005/ December 2005
Four Diesel Generators Permit	Astoria Generating Company, L.P.	NYCFD	99039398	September 2005/ December 2005
Dielectric Fluid Tanks Permit*	Astoria Generating Company, L.P.	NYCFD	99038192	May 2005/ August 2005
Dielectric Fluid Tanks Permit*	Astoria Generating Company, L.P.	NYCFD	99038176	May 2005/ August 2005
Dielectric Fluid (Cable Oil) Storage Tanks Pumphouse #2 (1000 gallons)*	Astoria Generating Company, L.P.	NYCFD	99038168	May 2005/ August 2005
Use of Air Compressor at Fuel Depot	Astoria Generating Company, L.P.	NYCFD	99039372	September 2005/ December 2005
Sulfuric Acid Storage (tote tank)	Reliant Energy, Inc.	NYCFD	23091440	June 2006/ September 2006
Hydrogen Tank System Permit	Astoria Generating Company, L.P.	NYCFD	04115176	September 2005/ December 2005

Permitted Equipment	Permittee			Renewal/
or Activity	(Owning Company)	Agency	Permit No.	Expiration Date
EPA ID Number (Astoria)	Astoria Generating Company, L.P.	EPA	NYD 096472758	N/A
Hazardous Materials Certificate of Registration	Astoria Generating Company, L.P.	USDOT	070803 551 008KL	June 1, 2006/ June 30, 2006
Article X New Plant Siting Approval	Astoria Generating Company, L.P.	NYPSC	Case No. 00-F-1522	Approval Granted June 25, 2003
Air and Water Permits Supporting Article X Siting Board Approval	Astoria Generating Company, L.P.	NYSDEC	Case No. 00-F-1522	Issued: May 6, 2003
Asbestos Handling License	Astoria Generating Company, L.P.	NYS Dept. of Labor Div. of Safety & Health	05-0421	June 1, 2006/ June 30, 2006

* Permit renewal application submitted and fees paid...awaiting issuance of permit.

Permits in the name of Guarantor are being transferred to Astoria LP prior to Closing.

ASTORIA GENERATING STATION CONSENT ORDERS

1.	Consent Order issued to Astoria Generating Company, L.P. (DEC Index No. C02-19990430-28, dated September 11, 2000).
2.	Modification to Consent Order issued to Astoria Generating Company, L.P. (DEC Index No. C02-19990430-28, dated July 16, 2001).
3.	Modification to Consent Order issued to Astoria Generating Company, L.P. (DEC Index No. C02-19990430-28, dated May 20, 2003).
4.	Modification to Consent Order issued to Astoria Generating Company, L.P. (DEC Index No. C02-19990430-28, dated September 28, 2004).
5.	Modification to Consent Order issued to Astoria Generating Company, L.P. (DEC Index No. C02-19990430-28, dated May 31, 2005).

Gowanus Gas Turbine Facility
ENVIRONMENTAL PERMITS, LICENSES AND REGISTRATIONS

				Renewal/
Permitted Equipment or Activity	Company Name	Agency	Permit No.	Expiration Date
SPDES Permit	Astoria Generating Company, L.P.	NYSDEC	NY-0201006	May 1, 2006/ November 1, 2006
Major Onshore Storage Facility License	Astoria Generating Company, L.P.	NYSDEC	0-0538, 0-0539, 0-0540, and 0-0541	January 1, 2008/ March 31, 2008
Petroleum Bulk Storage Registration Certificate — Gowanus Gas Turbines	Astoria Generating Company, L.P.	NYSDEC	2-603183	June 27, 2009/ July 27, 2009
Title V Permit	Astoria Generating Company, L.P.	NYSDEC	2-6102-00116/00021	February 28, 2007/ July 30, 2007
Gas Turbine Barges 1-4	Astoria Generating Company, L.P.	NYCDEP	PA871/72N PA872/72K PA873/72H PA874/72P	January 26, 2007/ April 26, 2007
Bulk Oil Storage Facility Permit*	Astoria Generating Company, L.P.	NYCFD	08014532	May 2005/ August 2005
Site Inspection Diesel Storage Tanks	Astoria Generating Company, L.P.	NYCFD	22046080	January 2006/ April 2006
CO2 System	Astoria Generating Company, L.P.	NYCFD	99039406	January 2006/ April 2006
Two Air Conditioning Units: (1) dockhouse and (1) inside	Astoria Generating Company, L.P.	NYCFD	99037061	January 2006/ April 2006
One Air Compressor; Use of Torch with Oxygen and Combustible Gas; Storage and Use of Compressed Gas (nitrogen cylinders); Storage and Use of Compressed Gas (acetylene and oxygen)	Astoria Generating Company, L.P.	NYCFD	99037319	January 2006/ April 2006
EPA ID Number	Astoria Generating Company, L.P.	EPA	NYD981182215	N/A
Vessel Certificate of Financial Responsibility	Astoria Generating Company, L.P.	DOT/ USCG	Clean Energy No. 1 Clean Energy No. 2 Clean Energy No. 4 Gowanus Bay No. 1 Gowanus Bay No. 2 Gowanus Bay No. 3 Gowanus Bay No. 4	July 26, 2008
Asbestos Handling License	Astoria Generating Company, L.P.	NYS Dept. of Labor Div. of Safety & Health	05-0421	June 1, 2006/ June 30, 2006

* Permit renewal application submitted, fee paid and inspection completed...awaiting issuance of permit.

Narrows Gas Turbine Facility
ENVIRONMENTAL PERMITS, LICENSES AND REGISTRATIONS

				Renewal/
Permitted Equipment or Activity	Company Name	Agency	Permit No.	Expiration Date
SPDES Permit	Astoria Generating Company, L.P.	NYSDEC	NY-0200808	May 1, 2006/ November 1, 2006
Major Oil Storage Facility License	Astoria Generating Company, L.P.	NYSDEC	2-1460	January 1, 2007/ March 31, 2007
Title V Permit	Astoria Generating Company, L.P.	NYSDEC	2-6102-00235/ 00005	November 15, 2006/ May 15, 2007
Gas Turbine Barges 1-2	Astoria Generating Company, L.P.	NYCDEP	PA535/72R PA534/72J	January 26, 2007/ April 26, 2007
House Boiler*	Astoria Generating Company, L.P.	NYCDEP	CA018998P	March 17, 2005/ June 17, 2005
Paint Storage: Use of Torch with Oxygen and Combustible Gas; Storage and Use of Compressed Gas (nitrogen cylinders); Storage and Use of Compressed Gas (acetylene and oxygen)	Astoria Generating Company, L.P.	NYCFD	05141395	October 2005/ January 2006
Storage of flammable liquids in various volumes	Astoria Generating Company, L.P.	NYCFD	99039414	October 2005/ January 2006
Site Inspection Diesel Storage Tanks	Astoria Generating Company, L.P.	NYCFD	22046072	October 2005/ January 2006
Bulk Oil Storage Facility Permit*	Astoria Generating Company, L.P.	NYCFD	08003014	May 2005/ August 2005
Two Air Conditioning Units	Astoria Generating Company, L.P.	NYCFD	05210703	October 2005/ January 2006
Storage of mixed flammable liquids*	Astoria Generating Company, L.P.	NYCFD	99038184	May 2005/ August 2005
EPA ID Number	Astoria Generating Company, L.P.	EPA	NYD981182207	N/A
Vessel Certificate of Financial Responsibility	Astoria Generating Company, L.P.	DOT/ USCG	Narrows No. 1 Narrows No. 2	July 26, 2008
Asbestos Handling License	Astoria Generating Company, L.P.	NYS Dept. of Labor Div. of Safety & Health	05-0421	June 1, 2006/ June 30, 2006

* Permit renewal application submitted, fee paid and inspection completed...awaiting issuance of permit.

Schedule 3.04
Capitalization

Astoria Generating Company, L.P.

General Partner
Orion Power New York GP, Inc.	1% general partnership interest
Limited Partner
Orion Power New York, L.P.	99% limited partnership interest
Orion Power Operating Services Astoria, Inc.
Authorized capital stock	100 shares, par value $1.00
Orion Power Operating Services, Inc.	100 shares

Encumbrances

     Liens, restrictions on transfer or encumbrances securing those certain five Promissory Notes each dated December 22, 2004 made by Orion Power New York, LP or Orion Power MidWest, LP, as the case may be, and payable to Reliant Energy, Inc. under the “Security Documents” as defined therein or executed pursuant thereto.

Schedule 4.02(b)
Company Consents

Consents necessary under that certain Second Amended and Restated Agreement of Limited Partnership of Astoria Generating Company, L.P. dated December 22, 2004.

Schedule 4.03
Capitalization

     Typical rights of a Pledgee to all cash, securities, dividends and other property received or otherwise distributed, substituted or exchanged in respect of or exchange for the Company Interests and created under those certain five Promissory Notes each dated December 22, 2004 made by Orion Power New York, LP or Orion Power MidWest, LP, as the case may be, and payable to Reliant Energy, Inc. and the “Security Documents” as defined therein or executed pursuant thereto.

Schedule 4.04(a)
OPNY LP Financial Statements

ORION POWER NEW YORK, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS — AUDITED
Twelve Months Ending December 31, 2003
(Thousands of Dollars)

Assets
Current assets:
Cash and cash equivalents		95,543
Restricted cash		19,139
Accounts receivable, net of allowance for bad debts of $1,123		49,898
Materials and supplies		11,140
Fuel inventory		13,070
Derivative assets		2,796
Prepaid insurance and property taxes		9,398
Other current assets		5,831
Total current assets		206,815
Property, plant and equipment, net		1,512,150
Other assets:
Goodwill, net		—
Other intangibles, net		148,853
Derivative assets		—
Deferred financing costs, net of accumulated amortization of $3,329		5,232
Other		—
Total other assets		154,085
Total assets	$	1,873,050
Liabilities and Partners’ Capital
Current liabilities:
Current portion of long-term debt and short-term borrowings		39,282
Accounts payable		24,679
Derivative liabilities		9,821
Payable to affiliates, net		24,073
Accrued expenses		7,975
Accrued interest		319
Deferred revenue		—
Total current liabilities		106,149
Long-term debt-		313,577
Other liabilities:
Derivative liabilities		7,711
Contractual obligations		4,247
Other		23,845
Total other liabilities		35,803
Total liabilities		455,529
Commitments and contingencies
Minority interest, affiliated company		20,370
Partners’ capital:-
Partners’ capital before accumulated other comprehensive loss		1,413,461
Accumulated other comprehensive loss		(16,310	)
Total partners’ capital		1,397,151
Total liabilities and partners’ capital	$	1,873,050

ORION POWER NEW YORK, L.P. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS — AUDITED
Twelve Months Ending December 31, 2003
(Thousands of Dollars)

Operating revenue	$	666,659
Operating expenses:
Fuel		129,786
Fuel — affiliates		124,932
Purchased power		3,915
Operation and maintenance		108,599
General and administrative		8,825
General and administrative recorded as non-cash capital contribution from partners		31,826
Goodwill impairment		485,039
Taxes other than income taxes		59,103
Depreciation and amortization		52,045
Total operating expenses		1,004,070
Operating Income (loss)		(337,411	)
Interest expense, net		(26,789	)
Minority interest, affiliated company		(1,879	)
Net income (loss)	$	(366,079	)

ORION POWER NEW YORK, L.P. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED PARTNERS’ CAPITAL AND
COMPREHENSIVE INCOME (LOSS) — AUDITED
Twelve Months Ending December 31, 2003
(Thousands of Dollars)

	Orion Power New			Orion Power New			Total Partners’			Comprehensive
	York, GP, Inc.			York, LP, LLC			Capital			Income (Loss)
Non-cash capital contribution of general and administrative expenses		64			31,762			31,826
Non-cash capital contribution of deferred financing costs		15			7,460			7,475
Non-cash capital contribution relating to the conversion of accounts payable to capital		20			9,880			9,900
Capital contributions		52			25,708			25,760
Capital distributions		(275	)		(137,062	)		(137,337	)
Comprehensive loss:
Net loss		(732	)		(365,347	)		(366,079	)	$	(366,079	)
Other comprehensive income (loss):
Deferred loss from cash flow hedges		(9	)		(4,635	)		(4,644	)		(4,644	)
Reclassification of net deferred loss from cash flow hedges into net loss		18			8,922			8,940			8,940
Comprehensive loss										$	(361,783	)
Balance at December 31, 2003	$	2,796		$	1,394,355		$	1,397,151

ORION POWER NEW YORK, L.P. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS — AUDITED
Twelve Months Ending December 31, 2003
(Thousands of Dollars)

Cash flows from operating activities:
Net income (loss)	$	(366,079	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Capital contribution of allocated general and administrative Expenses		31,826
Goodwill impairment		485,039
Depreciation and amortization		52,045
Amortization of revaluation of interest rate swaps		(4,815	)
Unrealized loss (gain) on derivative assets and liabilities		1,933
Amortization of deferred financing costs		2,862
Amortization of contractual rights and obligations		10,759
Minority interest		1,879
Change in assets and liabilities:
Restricted cash		(583	)
Accounts receivable, net		(10,349	)
Fuel inventory, materials and supplies		(11,350	)
Prepaid expenses and other current assets		4,442
Accounts payable		16,420
Receivable/payable to affiliates, net		(4,313	)
Accrued expenses		787
Accrued interest		105
Deferred revenue		(1,902	)
Other long-term liabilities		292
Net cash (used in) provided by operating activities		208,998
Cash flows from investing activities:
Capital expenditures		(34,945	)
Net cash used in investing activities		(34,945	)
Cash flows from financing activities:
Contributions from partners		25,760
Distributions to partners		(137,337	)
Payments on debt		(17,663	)
Payments of deferred financing costs		(590	)
Net cash used in financing activities		(129,830	)
Net change in cash and cash equivalents		44,223
Cash and cash equivalents, beginning of period		51,320
Cash and cash equivalents, end of period	$	95,543
Supplemental disclosure of cash flow information:
Cash paid for:
Interest (net of amounts capitalized)	$	27,599

ORION POWER NEW YORK, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS — UNAUDITED
Twelve Months Ending December 31, 2004
(Thousands of Dollars)

Assets
Current assets:
Cash and Cash Equivalents	580
Accounts Receivable, net	45,085
Materials and supplies	10,676
Fuel Inventory	16,770
Prepaid insurance and property taxes	19,156
Other current assets	4,178
Total current assets	96,445
Property, plant and equipment, net	952,369
Other Assets:
Intangibles	70,663
Total other assets	70,663
Total assets	1,119,477
Liabilities and Partners’ Capital
Current liabilities:
Accounts Payable	6,798
Current other taxes payable	8,192
Other current liabilities, net	6,955
Total current liabilities	21,945
Other liabilities:
Benefit obligations	11,877
Other	7,825
Total other liabilities	19,702
Total liabilities	41,647
Partners’ capital
Total partners’ capital	1,077,830
Total liabilities and partners’ capital	1,119,477

ORION POWER NEW YORK, L.P. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS — UNAUDITED
Twelve Months Ending December 31, 2004
(Thousands of Dollars)

Operating revenue	$	625,831
Operating expenses:
Fuel		315,009
Purchased power		3,502
Operation and maintenance		104,023
Taxes other than income taxes		32,989
Depreciation and amortization		42,104
Total operating expenses		497,627
Operating Income (loss)	$	128,203

Schedule 4.04(b)
Companies Financial Statements

ASTORIA GENERATING COMPANY, LP AND
ORION POWER OPERATING SERVICES ASTORIA, INC

Consolidating balance sheet — UNAUDITED
Twelve Months Ending December 31, 2004
(Thousands of Dollars)

Assets
Current assets:
Cash and cash equivalents	$	1,559
Accounts receivable, net		45,085
Materials and supplies		10,676
Fuel Inventory		16,770
Prepaid insurance and property taxes		19,156
Other current assets		4,179
Total current assets		97,424
Property, plant and equipment, net		952,369
Other assets:
Other intangibles, net		70,941
Other		(304	)
Total other assets		70,636
Total assets	$	1,120,430
Liabilities and Partners’ Capital
Current liabilities:
Accounts payable		6,775
Taxes Payable		4,989
Other current liabilities		2,965
Total current liabilities		14,729
Other liabilities:
Benefits obligations		11,877
Other		9,201
Total other liabilities		21,078
Total liabilities		35,807
Partner’s capital		1,084,623
Total liabilities and partners’ capital	$	1,120,430

ASTORIA GENERATING COMPANY, LP AND
ORION POWER OPERATING SERVICES ASTORIA, INC

Statement of consolidating operations — UNAUDITED
Twelve Months Ending December 31, 2004
(Thousands of Dollars)

Operating revenues:
Revenues	$	625,831
Operating expenses:
Fuel		315,442
Purchased Power		3,069
Operations and maintenance		65,215
Taxes other than income taxes		33,857
Depreciation and amortization		42,104
Total operating expenses		459,687
Operating income		166,144
Income Before Income Taxes	$	166,144

ASTORIA GENERATING COMPANY, LP AND
ORION POWER OPERATING SERVICES ASTORIA, INC

Consolidating balance sheet — UNAUDITED
Twelve Months Ending December 31, 2003
(Thousands of Dollars)

Assets
Current assets:
Cash and cash equivalents	$	36,224
Accounts receivable, net		38,003
Materials and supplies		9,162
Fuel Inventory		12,778
Derivative assets		2,796
Prepaid insurance and property taxes		878
Other current assets		4,178
Total current assets		104,020
Property, plant and equipment, net		977,413
Other assets:
Other intangibles, net		79,933
Other		23
Total other assets		79,956
Total assets	$	1,161,388
Liabilities and Partners’ Capital
Current liabilities:
Accounts payable		17,547
Current other taxes payable		2,857
Derivative liabilities		1,216
Other current liabilities		3,492
Total current liabilities		25,113
Other liabilities:
Benefits obligations		11,141
Other		9,470
Total other liabilities		20,611
Total liabilities		45,724
Partner’s capital		1,115,664
Total liabilities and partners’ capital	$	1,161,388

ASTORIA GENERATING COMPANY, LP AND
ORION POWER OPERATING SERVICES ASTORIA, INC

Statement of consolidating operations — UNAUDITED
Twelve Months Ending December 31, 2003
(Thousands of Dollars)

Operating revenues:
Revenues	$	549,140
Operating expenses:
Fuel		254,777
Purchased Power		2,878
Operations and maintenance		67,841
Taxes other than income taxes		35,786
Depreciation and amortization		40,380
Total operating expenses		401,661
Operating income		147,479
Net Loss	$	147,479

ASTORIA GENERATING COMPANY, LP AND
ORION POWER OPERATING SERVICES ASTORIA, INC

Consolidating balance sheet — UNAUDITED
Twelve Months Ending December 31, 2002
(Thousands of Dollars)

Assets
Current assets:
Cash and cash equivalents	$	6,887
Accounts receivable, net		30,681
Materials and supplies		7,990
Fuel Inventory		3,385
Derivative assets		4,999
Prepaid insurance and property taxes		739
Other current assets		12,336
Total current assets		67,017
Property, plant and equipment, net		983,875
Other assets:
Derivative assets -		1,529
Other intangibles, net		89,753
Other intangibles, net		4,451
Total other assets		95,733
Total assets	$	1,146,625
Liabilities and Partners’ Capital
Current liabilities:
Accounts payable		7,184
Current other taxes payable		128
Deferred federal income taxes payable		251
Derivative liabilities		2,533
Other current liabilities		11,291
Total current liabilities		21,386
Long-term debt -
Other liabilities:
Derivative liabilities -		488
Benefits obligations		9,255
Other		7,876
Total other liabilities		17,619
Total liabilities		39,005
Partner’s capital		1,107,620
Total liabilities and partners’ capital	$	1,146,625

ASTORIA GENERATING COMPANY, LP AND
ORION POWER OPERATING SERVICES ASTORIA, INC

Statement of consolidating operations — UNAUDITED
For the period from February 19, 2002 ending December 31, 2002
(Thousands of Dollars)

Operating revenues:
Revenues	$	456,154
Operating expenses:
Fuel		186,523
Purchased Power		452
Operations and maintenance		47,886
Taxes other than income taxes		28,425
Depreciation and amortization		35,092
Total operating expenses		298,377
Operating income (loss)
Revenue from investments in subs -		157,777
Net Loss	$	157,777

Schedule 4.04(c)
June 30, 2005 Balance Sheets
(unaudited)

ASTORIA GENERATING COMPANY, LP
Balance sheet — UNAUDITED
Six Months Ending June 30, 2005
(Thousands of Dollars)

Assets
Current assets:
Cash and cash equivalents		2
Accounts receivable, net		100,041
Materials and supplies		11,989
Fuel Inventory		19,434
Prepaid insurance and property taxes		9,103
Other current assets*		3,000
Total current assets		143,567
Property, plant and equipment, net		939,974
Other assets:
Other intangibles, net		69,776
Other deferred debits		(159	)
Total other assets		69,617
Total assets	$	1,153,159
Liabilities and Partners’ Capital
Current liabilities:
Accounts payable		11,403
Payable to affiliates		34,507
Accrued expenses		265
Other current liabilities		2,135
Total current liabilities		48,311
Other liabilities:
Benefits obligations		12,520
Other**		9,510
Total other liabilities		22,030
Total liabilities		70,341
Partner’s capital		1,082,818
Total liabilities and partners’ capital	$	1,153,159

*	As of June 30, 2005, Other current assets includes an additional $1.2 million.
**	As of June 30, 2005, Other liabilities includes an additional $665,000.

ASTORIA GENERATING COMPANY, LP
Statement of Operations — UNAUDITED
Six Months Ending June 30, 2005
(Thousands of Dollars)

Operating revenues:
Revenues	$	353,992
Operating expenses:
Fuel		115,561
Fuel — affiliates		81,313
Purchased Power		1,783
Operations and maintenance		50,724
Taxes other than income taxes		16,736
Depreciation and amortization		23,944
Total operating expenses		290,061
Operating income)		63,931
Income before income taxes	$	63,931

ORION POWER OPERATING SERVICES ASTORIA, INC.
Balance sheet — UNAUDITED
Six Months Ending June 30, 2005
(Thousands of Dollars)

Assets
Current assets:
Cash and cash equivalents		14
Total current assets		14
Total assets	$	14
Liabilities and Partners’ Capital
Current liabilities:
Accounts payable		196
Accrued expenses		84
Other current liabilities		465
Total current liabilities		745
Other liabilities:
Other		1,300
Total other liabilities		1,300
Total liabilities		2,045
Partner’s capital		(2,031	)
Total liabilities and partners’ capital	$	14

ORION POWER OPERATING SERVICES ASTORIA, INC.
Statement of operations — UNAUDITED
Six Months Ending June 30, 2005
(Thousands of Dollars)

Operating revenues:	$	—
Operating expenses:
Operations and maintenance		(2.1	)
Taxes other than income taxes		2.1
Total operating expenses		0.0
Operating income (loss)		0.0
Net Income	$	0

ASTORIA GENERATING COMPANY, LP
Balance sheet — UNAUDITED
Six Months Ending June 30, 2004
(Thousands of Dollars)

Assets
Current assets:
Cash and cash equivalents		30,411
Accounts receivable, net		62,043
Materials and supplies		9,820
Fuel Inventory		9,363
Prepaid insurance and property taxes		1,313
Other current assets		7,493
Total current assets		120,445
Property, plant and equipment, net		964,820
Other assets:
Other intangibles, net		74,151
Other deferred debits		(70	)
Total other assets		74,081
Total assets	$	1,159,345
Liabilities and Partners’ Capital
Current liabilities:
Accounts payable		7,451
Accrued expenses		4,282
Other current liabilities		2,333
Total current liabilities		14,066
Other liabilities:
Benefits obligations		12,210
Other		9,770
Total other liabilities		21,981
Total liabilities		36,047
Minority Interest -
Partner’s capital		1,123,298
Total liabilities and partners’ capital	$	1,159,345

ASTORIA GENERATING COMPANY, LP
Statement of operations — UNAUDITED
Six Months Ending June 30, 2004
(Thousands of Dollars)

Operating revenues:
Revenues	$	289,209
Operating expenses:
Fuel		79,351
Fuel — affiliates		60,136
Purchased Power		1,736
Operations and maintenance		37,270
General and administrative - Taxes other than income taxes		18,572
Depreciation and amortization		20,281
Total operating expenses		217,346
Operating income		71,863
Income before income taxes	$	71,863

ORION POWER OPERATING SERVICES ASTORIA, INC
Balance sheet — UNAUDITED
Six Months Ending June 30, 2004
(Thousands of Dollars)

Assets
Current assets:
Cash and cash equivalents	$	2,096
Accounts receivable, net		3
Total current assets		2,099
Total assets	$	2,099
Liabilities and Partners’ Capital
Current liabilities:
Accounts payable		157
Accrued expenses		10
Other current liabilities		310
Total current liabilities		478
Other liabilities:
Other		714
Total other liabilities		714
Total liabilities		1,192
Partner’s capital		907
Total liabilities and partners’ capital	$	2,099

ORION POWER OPERATING SERVICES ASTORIA, INC
Statement of operations — UNAUDITED
Six Months Ending June 30, 2004
(Thousands of Dollars)

Operating revenues:	$	—
Operating expenses:
Operations and maintenance		(2,033	)
Taxes other than income taxes		1
Total operating expenses		(2,032	)
Operating income (loss)		(2,032	)
Interest expense, net
Net Income	$	(2,032	)

Schedule 4.05(a)
Certain Company Liabilities

Under a New York Department of Environmental Conservation order, Astoria Generating Station is required to evaluate certain technical changes to modify its intake cooling systems. Depending on the outcome of the discussions regarding the technical changes, if any, that are required to be implemented, including the form of technology ultimately selected, it is estimated that it will be required to make approximately $75 million in capital expenditures over a four-year period in order to comply with this order. Astoria began construction of an initial pilot intake structure in April 2005 and also initiated steps to begin the determination of the extent, if any, of subsequent intake structure modifications.

Schedule 4.05(b)
Certain Developments

None

Schedule 4.06
Litigation

1.	Arra Ashjian v. Orion Power Holdings, Inc. et al.
2.	James D. Lee v. Astoria Generating Company, L.P. et al.
3.	Jamie Roldan and Elaine Roldan v. Astoria Generating Company, L.P. et al.
4.	Robert J. Reidt v. Astoria Generating Company, L.P. et al.
5.	Elsayed Eldoh v. Astoria Generating Company, L.P. et al.
6.	The Utility Workers Union of America, Local 1-2 (the “UWUA Local”) has informed Reliant Energy, Inc. (“Reliant”) by letters dated February 4, 2005 and April 25, 2005, respectively, that, as a result of Reliant’s change of the gas turbine operators’ shift schedules from a five-week cycle to a six-week cycle at the Narrows Gas Turbine Facility without the gas turbine operators’ consent, (1) the UWUA Local considers the shift change a violation of the National Labor Relations Act and of the existing Collective Bargaining Contract, (2) the UWUA Local’s General Counsel has been authorized to file an Unfair Labor Practice Charge with the National Labor Relations Board (the “NLRB”), and (3) the UWUA Local seeks to arbitrate the issue.
7.	Workers Compensation Claim No. 205287218
8.	Workers Compensation Claim No. 205263467
9.	Workers Compensation Claim No. 205298951
10.	Workers Compensation Claim No. 205259489
11.	Workers Compensation Claim No. 205267150
12.	Workers Compensation Claim No. 205278629
13.	Workers Compensation Claim No. 205277087
14.	Workers Compensation Claim No. 205289441

Schedule 4.07
Compliance with Laws

1. New York State Department of Environmental Conservation Modified Order on Consent DEC File No. CO2-19990430-28

There is a Modified Order on Consent with New York State Department of Environmental Conservation for Astoria Generating Company, LP, covering conditions at Astoria Station and Narrows. This Consent Order has been modified four times.

The dates of 2007 and 2008 for the completion of the Repowering Project (which will end the once-through cooling at the Astoria Station), will have to be renegotiated with the New York State Department of Environmental Conservation (“NYSDEC”) in order to be extended. The construction of the repowered intake test bay commenced April 30, 2005, in accordance with modified provisions of the Astoria Consent Order and the SPDES permit. The development and submittal of a Final Action Plan for the intake of the existing once-through cooling system has been stayed at this time.

2. New York State Department of Environmental Conservation March 30, 2005 Request for Information

The Astoria Station received a Request for Information (RFI) dated March 30, 2005 regarding the need for priority pollutant analyses and other information to be used to support a BTA determination under 6NYCRR Part 704.5 and 40 CFR Part 125.95. The original due date for submission of this material was May 30, 2005. NYSDEC approved a request to extend the submittal date to September 30, 2005. This work has been completed and will be submitted to NYSDEC on September 30, 2005.

3. Repowering Extension of Expiration of Prevention of Significant Deterioration (“PSD”) Air Quality Permit at Astoria Station

NYSDEC granted a request for extension of the expiration of the PSD Permit for construction of the Repowering Project at the Astoria Station to June 9, 2006.

4. Extension of Expiration of Aeronautical Study at Astoria Station

The FAA granted a request for extension of the expiration of the aeronautical study for the Repowering Project at the Astoria Station to December 16, 2005.

5. Astoria Mounded Tanks

A study of the viability of adding additional containment to the Astoria Mounded Tanks was submitted to the NYSDEC and USEPA in July 2005. A study was submitted to NYSDEC and USEPA on September 27, 2004 that addresses the adequacy of containment for the existing configuration.

6. Narrows Mounded Tanks

The current response to the Consent Order requires the retirement of mounded tanks KER-4 and KER-5 at Narrows by the end of 2005. The tanks have been cleaned and are awaiting NYSDEC approval to complete the retirement process.

7. Astoria Hazardous Waste Drain Line

Remediation of the drain line containing traces of PCB contamination, which was discovered as during the closure of the former Hazardous Waste Storage Area, will begin in the 4th Quarter 2005.

8. Astoria Exposure Assessment

Development of an exposure assessment that evaluates current and potential exposures to contaminated media at the Astoria Station is required to be filed with NYSDEC. Work on an assessment involving a possible leak discovered during the cleaning of tank FO6-5 is underway. Submission of the findings of this assessment to NYSDEC is expected in the 4th Quarter 2005.

Schedule 4.07 — Attachment
List of Violations

Date	Facility	Agency	Event	Event Description	Status / Resolution / Documentation
28-Oct-02	Astoria	CNY- ECB	NOV	Failure to take sample of wastewater discharge	Closed — $250 fine
12/11/2002	Astoria	NYDEC	NOV	2 NOVs for failure to submit a semi-annual report and multiple quarterly monitoring reports	Closed — Final Consent Issued; penalty of $18,500 paid.
7/31/2002	Astoria	NYDEC	Permit Limit Exceedance	Oil and Grease exceedances from Outfalls 001 and 002. Exceedances reported to NYSDEC on DMRs.	Closed — Final Consent Issued; penalty of $18,500 paid. — the Final Consent Order and penalty have been combined with the Title V NOVs — see item dated 12/11/02.
4/7/2004	Astoria	NYDEC	NOV	Station received NOV via a letter pertaining to the 3/3/04 SPDES permit inspection stating the department had not received sample results by required date of August 6, 2003.	Closed — Station submitted sample results to the DEC on July 2, 2004; waiting confirmation of Department’s review and acceptance of results.
5/22/2004	Astoria	ECB City of NY	NOV	Complaint regarding a contractors asbestos abatement.	Closed — A hearing before the New York City Department of Environmental Protection (NYCDEP) Environmental Control Board (ECB) was held on 11/16/04. The contractor was successful having one of the three violations dismissed (the violation regarding plastic on the walls). The contractor paid a fine of $6,000 for the two remaining violations. Reliant had already paid the full amount of $9,000, prior to the hearing. The contractor will reimburse Reliant the total $9,000, but will be setting up a meeting with the ECB to try and get a “refund” for the $3,000 on the dismissed violation.
15-May-03	Narrows	NYC-DEP	Notice of Violation and Hearing	Aledged failure to file the Community Right - to - Know inventory report (Tier II reports) for year 2002 by 03/01/03.	Closed — Jim Gregory appeared before the Environmental Control Board on 07/16/03. Jim presented a copy of the inventory and transmittal letter along with a copy of the cancelled check for Narrows. The Hearing Officer/Board dismissed the issue. No written notice of dismissal was provided by the board. No fine issued due to dismissal.
09/28/04 Modification #3 05/21/03 Modification #2 07/06/01 Modification #1 09/11/00 Original	Astoria, Gowanus and Narrows	NYSDEC	Consent Order	Orion Power accepted all responsibilities of a multi-disciplinary Consent Order requiring remediation and other corrective work as part of the divestiture transaction with ConEd,	OPEN — Compliance activities continue with respect to remediation, opacity reduction, tank repairs, and mitigation of cooling water intake impacts. Appendix 1: Intake Structures and Thermal Discharges •   Construction of a test portion of the intake structure began on April 30, 2005 in accordance with modified provisions of the Astoria Consent Order and the SPDES permit. Appendix 2: Tank Repairs/ Containment •   Cleaned/ repaired two of four mounded tanks (Tank FO6-6 cleaning/ inspection in-process) •   Submitted a feasibility study to NYSDEC and USEPA in September 2004 evaluating the feasibility of secondary containment for the mounded tanks...awaiting comments from agency. Appendix 3: Opacity Reduction •   An opacity reduction program is in place with Quarterly reporting requirements. Appendix 4: Pipeline Testing

Date	Facility	Agency	Event	Event Description	Status / Resolution / Documentation
					•   All required testing has been satisfactorily completed. Appendix 5: Areas of Concern (AOCs) •   Continue implementation of the Interim Corrective Measures (IRMs) in Area 3 of the Fuel Oil Tank Farm (FOTF) and Area 9 to address the presence of free-phase product in the subsurface •   Implement scope of work to address the presence of PCBs in the 12-inch diameter storm sewer drain line associated with the former Astoria Hazardous Waste Storage Area (HWSA). •   Continue planning for investigating the Tank FO6-5 releases (small holes in the bottom of Astoria Tank FO6-5). •   NYSDEC issued Astoria complex-wide cleanup criteria Specific Areas of Concern (AOCs) at Astoria require corrective measures •   In a letter dated May 28, 2004 the NYSDEC indicated their acceptance of the timeline for implementing the Final SCR recommendations for the AGS and the methodology described for complying with the NYSDOH July 16, 2002 guidance memorandum regarding carcinogenic polycyclic aromatic hydrocarbons (cPAHs). •   Continue communications and coordination with the NYSDEC and NYSDOH regarding the Final SCR Addendum (that includes the site-specific B(a)P action level analysis and results). •   A Work Plan to address soil impacts within Area 4 will be prepared following receipt of the NYSDEC and NYSDOH written acceptance of a site-specific B(a)P action level presented in the Final SCR Addendum.
9-Dec-04	Astoria	NYSDEC	Permit Limit Exceedance	Grease & Oil (Weekly)	Closed — Oil absorbent pads and socks were replaced at separator. Quarterly services of separator performed in early February 2005.
12-Dec-04	Astoria	NYSDEC	Permit Limit Exceedance	Grease & Oil (Weekly)	Open — Technical Services and Station personnel are working on the following activities to address the exceedances. Activities should be completed in the 4th Qtr. 2005. •   Calculate the new orifice size for the OWS, and install. •   Remove the discs from the check valves. Doing this will allow the floor trenches to act as a reservoir for all units. Currently, the flow from 2,3 and 4 can back up into the floor trenches, but 5 must flow directly into the separator. •   Spec new sump pumps that will not emulsify an oil/water mix. •   Determine whether the existing separator can have additional coalescing plates installed. If not, modify the plate frame to accept additional plates (weight of additional plates may be an issue) •   Investigate the installation of a secondary coalescer (mesh pack) in the existing separator. •   Spec a skimmer for each sump. •   Review the sampling protocol. The sample should be taken from the discharge chamber of the separator rather than the discharge pipe.
20-Dec-04	Astoria	NYSDEC	Permit Limit Exceedance	Grease & Oil (Weekly)	Open — Technical Services and Station personnel are working on the following activities to address the exceedances. Activities should be completed in the 4th Qtr. 2005. •   Calculate the new orifice size for the OWS, and install. •   Remove the discs from the check valves. Doing this will allow the floor trenches to act as a reservoir for all units. Currently, the flow from 2,3 and 4 can back up into the floor trenches, but 5 must flow directly into the separator. •   Spec new sump pumps that will not emulsify an oil/water mix. •   Determine whether the existing separator can have additional coalescing plates installed. If not, modify the plate frame to accept additional plates (weight of additional plates may be an issue) •   Investigate the installation of a secondary coalescer (mesh pack) in the existing separator. •   Spec a skimmer for each sump. •   Review the sampling protocol. The sample should be taken from the discharge chamber of the separator rather than the discharge pipe.
11-Jan-05	Astoria	OPNY	Reportable Spill		Closed — A gallon of dieletric fluid spilled onto a secondary containment from the C Phase of feeder 12G03K. The spill was attributed to equipment failure.

Date	Facility	Agency	Event	Event Description	Status / Resolution / Documentation
5-Mar-05	Astoria	USCG & NYDEC	Reportable Spill		Closed — 200 gallons of #6 Fuel Oil spilled on to the delivering barge, during fuel oil transfer to the storage tanks.
11-Apr-05	Astoria	USEPA	Administrative	Failure to implement an SPCC Plan in accordance with 40 CFR §112.7 and §112.8.	Closed — Written response to EPA was provided on June 14, 2005.
1-May-05	Astoria	NYSDEC	Permit Limit Exceedance	Grease & Oil (Daily) — There was one exceedance.	Open — The exceedance was reported to NYSDEC in the monthly Discharge Monitoring Report (DMR). No other correpondence.
5-May-05	Astoria	USGC & NYDEC	Reportable Spill	A hydraulic line leaked spattering oil on the adjacent barge and dock area while system was active, approximately 8 oz. of hydraulic oil spilled. None of the oil entered the waterway.	Closed — The hydraulic oil line was secured and the system will be drained for repair. A courtesy notification was made to local agencies, but this was not a reportable spill per regulation.
18-Jun-05	Narrows	National Response Center, USCG, NYSDEC and NYCDEP	Reportable Spill	On 18 JUN 05 at approx. 0830 hours, Gas Turbine Operator Robert Rotelli noticed a petroleum odor on the pier near NARROWS #1 gas turbine barge. Upon further investigation, he observed a drip of oil coming through a dock drain line into the water. The rate was about one drip every 15-30 seconds. A sheen was observed on the surface of the water. There were no fuel oil systems in operation at the time and the supply piping had been previously isolated. The station was burning gas.	Closed — The station forces immediately deployed absorbent materials in the water adjacent to the barge and pier. The One Hour Responder, Ken’s Marine, was called to the site and placed additional absorbent materials near the permanent containment boom. A vacuum truck was requested to evacuate the isolated fuel oil piping. The estimated amount of fuel oil released was ten gallons. No evidence was found to indicate that any oil had entered the waterway outside of the boom. The drain port in the dock where the oil drip was observed was packed with oil absorbent material. The next step is to put a plug into the drain opening. The next step is to drain and remove the swivel joint piping sections that connect the dock piping to the gas turbine barges for inspection. Notifications: The incident was reported IAW the USCG Facility Response Plan. The phone call list contains the details of the calls. At 1500 hours, the NYC Department of Environmental Protection Emergency Response Investigator, Dennis Huacon, from the Pollution Prevention Section arrived and made a brief site investigation. He was satisfied with our efforts and said that this did not have any effect on NYC facilities.
24-Aug-05	Gowanus	National Response Center, USCG, NYSDEC and NYCDEP	Reportable Spill	Approximately one half gallon of turbine lube oil sprayed onto adjacent surfaces on the power generation barge and dock surfaces. The incident was caused by a small leak in the lube oil system. Additional absorbent material was placed on the surface of the water as a contingency measure.	Open — Absorbent material was placed on the surface of the water as a contingency measure. All areas that had any evidence of lube oil spray were cleaned. Several feet of wooden dock stringer that had oil on the surface was removed. The failed fitting was replaced.Notifications in accordance with the station spill response plans were made.

Schedule 4.08
Material Contracts

(i) Standby Rate Agreement between Astoria Generating Company, L.P. and Consolidated Edison Company of New York, Inc. dated April 10, 2003

     Master Power Purchase and Sale Agreement between Astoria Generating Company, L.P. and Constellation Power Source, Inc. and confirmation dated November 24, 2003

     Master Power Purchase and Sale Agreement between Astoria Generating Company, L.P. and Dominion Energy Marketing, Inc. and confirmation dated December 10, 2003

     Steam Price Letter Agreement between Astoria Generating Company, L.P. and Consolidated Edison Company of New York, Inc. dated August 20, 1999

     Service Agreement for New York ISO Market Administration and Control Area Services Tariff by and between the New York Independent System Operator and Astoria Generating Company, L.P. dated September 15, 1999

     Fuel Oil Contract No. S40821 between Astoria Generating Company, L.P. and Sunoco, Inc. (R&M) dated July 1, 2004

     Spot Fuel Oil purchase under the Trafigura contract dated as of September 16, 2005, for the purchase of approximately 75,000 barrels of No. 6 Fuel Oil with 0.3 percent Sulfur high pour for the delivery period from October 1, 2005 through October 31, 2005

(ii) Service Agreement for Firm Point-to-Point Transmission Service by and between New York Independent System Operator and Astoria Generating Company, L.P. dated September 15, 1999

     Service Agreement for Non-Firm Point-to-Point Transmission Service by and between New York Independent System Operator and Astoria Generating Company, L.P. dated September 15, 1999

     Master Storage and Product Handling Agreement No. 33-04-02-997 between Sunoco, Inc. (R&M) and Astoria Generating Company, L.P. dated February 24, 2004

     Storage and Product Handling Agreement No. 36-01-04-799 (Standard Terms and Conditions Revision) between Sunoco, Inc. (R&M) and Astoria Generating Company, L.P. dated March 5, 2004

     Service Agreement for Non-Core Transportation Service for Electric Generation between Astoria Generating Company, L.P. and The Brooklyn Union Gas Company d/b/a Key Span Energy Delivery New York dated December 22, 2000

     Gas Transportation and Balancing Services Agreement between Astoria Generating Company, L.P. and Consolidated Edison Company of New York, Inc. dated August 19, 1999, First Amendment to Gas Transportation and Balancing Services Agreement dated August 19, 1999, Letter Agreement Amending Gas Transportation and Balancing Services Agreement, dated May 10, 2002

     Service Agreement for Non-core Transportation Service for Electric Generation between Astoria Generating Company, L.P. and The Brooklyn Union Gas Company (d/b/a Key Span Energy Delivery New York) dated October 25, 2002

(iii) Astoria Continuing Site Agreement between Astoria Generating Company, L.P. and Consolidated Edison Company of New York, Inc. dated March 2, 1999

     Gowanus Continuing Site Agreement between Astoria Generating Company, L.P. and Consolidated Edison Company of New York, Inc. dated March 2, 1999

     Narrows Continuing Site Agreement between Astoria Generating Company, L.P. and Consolidated Edison Company of New York, Inc. dated March 2, 1999

     Operating Agreement dated as of January 5, 1981, by and between the Power Authority of the State of New York, a corporate municipal instrumentality of the State of New York, and ConEd

     Agreement Amending Operating Agreement dated as of August 18, 1999, by and between the Power Authority of the State of New York, a corporate municipal instrumentality of the State of New York, and ConEd

     Assignment and Assumption Agreement of Operating Agreement dated as of August 20, 1999, by and between Astoria Generating Company LP and ConEd

(iv) None

(v) Cartridge Filter Technology Development, License, and Assignment Agreement among Reliant Energy, Inc. (f/k/a Reliant Resources, Inc.) and by its Subsidiaries, Orion Power Holdings, Inc. and Astoria Generating Company, L.P. and Gunderboom, Inc. dated April 21, 2003

     Professional Services Agreement between Astoria Generating Company, L.P. and Gunderboom, Inc. dated April 21, 2003, as amended

     Time Charter of the Barge Hatteras between Astoria Generating Company, L.P. and Penn Maritime, Inc. dated April 15, 2004

     Amendment to Time Charter of the Barge Hatteras between Astoria Generating Company, L.P. and Penn Maritime, Inc. dated January 18, 2005

(vi) None

(vii) None

(viii) None

(ix) None

(x) Collective Bargaining Contract

(xi) None

(xii) None

(xiii) None

(xiv) None

(xv) Agreement of Limited Partnership of Astoria Generating Company, L.P. dated April 19, 2000

     Second Amended and Restated Agreement of Limited Partnership of Astoria Generating Company, L.P. dated December 22, 2004

     Second Restated Certificate of Incorporation of Orion Power New York GP, Inc. dated December 22, 2004

     Second Amended and Restated Agreement of Limited Partnership of Orion Power New York, L.P. dated December 22, 2004

     Amended and Restated Limited Liability Company Agreement of Orion Power New York LP, LLC dated December 22, 2004

     Second Amended and Restated Certificate of Formation of Orion Power Capital, LLC

(xvi) A-10 Dock Sublicense Agreement between Astoria Gas Turbine Power, LLC and Astoria Generating Company, L.P. dated August 25, 2005

     A-0 Dock License between Astoria Generating Company, L.P. and Consolidated Edison Company of New York, Inc. dated August 20, 1999

     A-10 Dock License between Astoria Generating Company, L.P. and Consolidated Edison Company of New York, Inc. dated August 20, 1999

     Astoria Declaration of Subdivision Easements Agreement by Consolidated Edison Company of New York, Inc. dated June 16, 1999

     Amended and Restated Astoria Declaration of Easements Agreement by Consolidated Edison Company of New York, Inc. dated June 25, 1999

     Gowanus Declaration of Easements Agreement by Consolidated Edison Company of New York dated July 20, 1999, Amended and Restated by and between Consolidated Edison Company of New York, Inc. and Astoria Generating Company, L.P. dated August 19, 1999

     Amended and Restated Narrows Declaration of Easements Agreement by and between Consolidated Edison Company of New York, Inc. and Astoria Generating Company, L.P. dated August 19, 1999

     Gowanus Declaration of Subdivision Easements Agreement by Consolidated Edison Company of New York, Inc. dated July 20, 1999

     Secondary Access Agreement by and between Consolidated Edison Company of New York, Inc. and Astoria Generating Company, L.P. dated August 20, 1999

     Assignment and Assumption Agreement by and between Consolidated Edison Company of New York, Inc. and Astoria Generating Company, L.P. dated August 20, 1999

     Assignment and Assumption of Narrows Easement by and between Consolidated Edison Company of New York, Inc. and Astoria Generating Company, L.P. dated August 20, 1999

     Operating Agreement by and between Power Authority of the State of New York and Consolidated Edison Company of New York, Inc. dated August 18, 1999, as amended

     1999 Narrows Easement Agreement by and between Consolidated Edison Company of New York and the People of the State of New York, Inc. dated August 5, 1999

     Astoria Zoning Lot Development Agreement by and between Consolidated Edison Company of New York, Inc. and Astoria Gas Turbine Power, LLC dated June 25, 1999

     Gowanus Zoning Lot Development Agreement by and between Consolidated Edison Company of New York, Inc. and Astoria Gas Turbine Power, LLC dated June 25, 1999

     Gowanus Zoning Lot Development Agreement by and between Consolidated Edison Company of New York, Inc. and Astoria Generating Company, L.P. dated August 20, 1999

(xvii) ConEd Agreement

(xviii) None

(xix) None

Matters disclosed under particular subsections shall constitute disclosures for all purposes under this Schedule.

Schedule 4.08(c)
Indemnification Claims Under the ConEd Agreement

None

Schedule 4.09
Taxes

4.09(c)

Empire Zone Credits claimed on Astoria LP’s 2003 New York State income tax return are currently under review by the New York State Department of Taxation and Finance. This review process is consistent with the review being undertaken by the Department of Taxation and Finance of all entities claiming real estate property tax credits under the Empire Zone Program.

Astoria LP New York State sales & use tax audit. Audit Period: December 1, 2002 through August 31, 2005.

Seller’s consolidated group was audited by the IRS for the short tax period from January 1, 2002 to February 19, 2002 as the result of filing a Form 1139 net operating loss (“NOL”) carryback from that period to its December 31, 1999 and December 31, 2000 consolidated tax years. That audit resulted in proposed adjustments to the NOL in the aggregate amount of not less than $9,700,000, and those adjustments have been protested by the Seller. That protest is currently awaiting action by the IRS Appellate Conferee in Houston, TX.

Additionally, a Form 1139 NOL carryback of Seller’s portion of a CenterPoint Energy, Inc. (“CenterPoint”) consolidated NOL for CenterPoint’s tax year ended December 31, 2002 to Seller’s consolidated tax years December 31, 2000 and December 31, 2001 was audited by the IRS.

Guarantor is currently under audit by the IRS as the result of a Form 1139 filed to carryback an NOL from its October 10, 2001 to December 31, 2002 short tax year to CenterPoint’s consolidated December 31, 1998 tax year. Seller was included in Guarantor’s federal consolidated income tax return for its October 1, 2002 to December 31, 2002 short tax year. This audit is currently in the factual request stage, and no proposed adjustments have been issued at this time.

CenterPoint is currently under audit by the IRS for its consolidated tax year ending December 31, 2002, for parts of which Seller and Guarantor were members of that consolidated group (for the period from February 20, 2002 to September 30, 2002 with respect to Seller, and for the period from January 1, 2002 to September 30, 2002 with respect to Guarantor).

4.09(d)

IRS Form 872, Consent to Extend the Time to Assess Tax, executed by Orion Power Holdings, Inc. & Subsidiaries, on July 20, 2005, to extend the statutory period of limitations for the assessment of federal income tax for the taxable period ended February 19, 2002, until September 15, 2006.

4.09(e)

Tax Allocation Agreement By and Among Reliant Energy, Incorporated (now CenterPoint) and its Affiliated Companies and Reliant Resources, Inc. (now Reliant Energy, Inc.) and its Affiliated Companies effective as of December 31, 2000.

Orion Power Holdings, Inc. & Subsidiaries are subject to Treasury Regulation § 1.1502-6 or similar provision of state Law with respect to the taxable period February 20, 2002 through September 30, 2002, during which period they were included in the consolidated federal income tax return (and the state income Tax Returns of any state that permits consolidated, combined or unitary income Tax Returns, if any) of CenterPoint for its taxable year ended December 31, 2002.

Tax Sharing Agreement dated effective as of October 1, 2002, by and among Reliant Energy, Inc., and each other affiliated entity listed on Schedule A thereto

Schedule 4.10(a)
Employee Benefit Plans; ERISA

Company Plan

Astoria Generating Company, L.P. Retirement Plan (Plan #005)

Seller Plans sponsored, maintained or contributed to by a Company

401(k) Plans

Orion Power Holdings, Inc. 401(k) Savings Plan (Plan #010)

Reliant Energy, Inc. Savings Plan (Plan #001)

Severance Plans

Reliant Energy, Inc. 2003 Involuntary Severance Benefits Plan for Employees With Annual Base Pay Less Than $150,000 As Amended and Restated Effective June 1, 2004

Reliant Energy, Inc. 2003 Involuntary Severance Benefits Plan for Employees With Annual Base Pay At Least $150,000 But Less Than $200,000 As Amended and Restated Effective June 1, 2004

Health and Welfare Plans

Reliant Energy, Inc. Group Welfare Benefits Plan — see attached for vendors and eligible groups.

Incentive Plans

Reliant Energy, Inc. Annual Incentive Compensation Plan

Reliant Energy, Inc. 2002 Stock Plan

Reliant Energy, Inc. Employee Stock Purchase Plan

Power of One Incentive Plan

Bonus incentive plans as set forth in Collective Bargaining Agreement

Schedule 4.10(a) — Attachment

Plan/Vendor	Plan Type	Covered Employees	Funding
MEDICAL
Aetna POS (fully insured)	Medical	Local 1 & 2	Fully insured
CareFirst BCBS	PPO Plan 5 ($14 Co-pay)	Local 1 & 2	Self insured
CareFirst BCBS	Build-Your-Own EPO/PPO	Non Bargaining	Self insured
MENTAL HEALTH
Magellan	Managed Mental Health	Non Bargaining Local 1 & 2 All except Aetna POS	Self insured
EAP		Non Bargaining	Self insured
PRESCRIPTION
Caremark	Prescription Drugs	Non Bargaining Local 1 & 2	Self insured
DENTAL
Delta Dental	PPO	Non Bargaining Local 1 & 2	Self insured
VISION
Vision Service Plan	Vision	Non Bargaining Local 1 & 2	Self insured
WELFARE
Prudential — Life, AD&D	Life — Basic	Non Bargaining — 1X up to $300,000 Local 1 & 2 — $40,000	Full insured
	AD&D — Basic	Local 1 & 2 — $40,000	Full insured
Cigna	BTA (includes rider for felonious assault coverage)	Non Bargaining — $200,000 Local 1 & 2 — 4x up to $350,000	Full insured
UNUM	State Disability	Non Bargaining Local 1 & 2	Full insured
UNUM — LTD	LTD	Non Bargaining Local 1 & 2	Full insured
ADMINISTRATION
Hewitt	Your Benefit Resources 866-520-3285	Non Bargaining Local 1 & 2
OTHER
Section 125 Plan	Pretax deductions. FSA’s — dependent and medical	Non Bargaining	$5,000 dependent $5,000 health
		Local 1 & 2	$5,000 dependent $5,000 health

Schedule 4.10(c)
Employee Benefit Matters

None

Schedule 4.10(d)
Company Plan Trigger Events

None

Schedule 4.12
Environmental Matters

     The environmental obligations disclosed in the documents listed on this Schedule 4.12 are incorporated herein by reference.

1. Consent Order

There is a Modified Order on Consent with New York State Department of Enviornmental Conservation for Astoria Generating Company, LP, covering conditions at Astoria Station and Narrows. This Consent Order has been modified four times.

a.	Consent Order issued to Astoria Generating Company, L.P. (DEC Index No. C02-19990430-28, dated September 11, 2000).
b.	Modification to Consent Order issued to Astoria Generating Company, L.P. (DEC Index No. C02-19990430-28, dated July 16, 2001).
c.	Modification to Consent Order issued to Astoria Generating Company, L.P. (DEC Index No. C02-19990430-28, dated May 20, 2003).
d.	Modification to Consent Order issued to Astoria Generating Company, L.P. (DEC Index No. C02-19990430-28, dated September 28, 2004).
e.	Modification to Consent Order issued to Astoria Generating Company, L.P. (DEC Index No. C02-19990430-28, dated May 31, 2005).

The dates of 2007 and 2008 for the completion of the proposed Repowering Project at the Astoria Station (which will end the once-through cooling at the Astoria Station), will have to be renegotiated with the New York State Department of Environmental Conservation (“NYSDEC”) in order to be extended. The construction of the repowered intake test bay commenced April 30, 2005, in accordance with modified provisions of the Astoria Consent Order and the SPDES permit. The development and submittal of a Final Action Plan for the intake of the existing once-through cooling system has been stayed at this time.

2. New York State Department of Environmental Conservation March 30, 2005 Request for Information

The Astoria Station received a Request for Information (RFI) dated March 30, 2005 regarding the need for priority pollutant analyses and other information to be used to support a BTA determination under 6NYCRR Part 704.5 and 40 CFR Part 125.95. The original due date for submission of this material was May 30, 2005. NYSDEC approved a request to extend the submittal date to September 30, 2005. This work has been completed and will be submitted to NYSDEC on September 30, 2005.

3. Extension of Expiration of Prevention of Significant Deterioration (“PSD”) Air Quality Permit at Astoria Station

NYSDEC granted a request for extension of the expiration of the PSD Permit for construction of the Repowering Project at the Astoria Station to June 9, 2006.

4. Extension of Expiration of Aeronautical Study at Astoria Station

The FAA granted a request for extension of the expiration of the aeronautical study for the Repowering Project at the Astoria Station to December 16, 2005.

5. Astoria Mounded Tanks

A study of the viability of adding additional containment to the Astoria Mounded Tanks was submitted to the NYSDEC and USEPA in July 2005. A study was submitted to NYSDEC and USEPA on September 27, 2004 that addresses the adequacy of containment for the existing configuration.

6. Narrows Mounded Tanks

The current response to the Consent Order requires the retirement of mounded tanks KER-4 and KER-5 at Narrows by the end of 2005. The tanks have been cleaned and are awaiting NYSDEC approval to complete the retirement process.

7. Astoria Hazardous Waste Drain Line

Remediation of the drain line containing traces of PCB contamination, which was discovered as during the closure of the former Hazardous Waste Storage Area, will begin in the 4th Quarter 2005.

8. Astoria Exposure Assessment

Development of an exposure assessment that evaluates current and potential exposures to contaminated media at the Astoria Station is required to be filed with NYSDEC. Work on an assessment involving a possible leak discovered during the cleaning of tank FO6-5 is underway. Submission of the findings of this assessment to NYSDEC is expected in the 4th Quarter 2005.

9. Independent Technical Review, Orion Power New York LP’s Acquisition of New York Thermal Generation Assets, Stone & Webster Management Consultants, Inc., July 1999, but only to the extent related to environmental matters.

10. Independent Technical Review, Orion Power New York, LP Thermal Assets, September 4, 2002, Stone & Webster Consultants, Inc., but only to the extent related to environmental matters.

11. The attachment to Schedule 4.07 is incorporated herein by reference.

12. ConEd Agreement and related documents.

Schedule 4.13(a)
Intellectual Property

1. Sellers and Reliant Energy, Inc. own certain proprietary technology relating to cartridge filtrations systems, including the technology represented in Sellers’ application for a United States patent entitled “Cooling Water Intake Cartridge Filter for Industry” filed May 22, 2002 (U.S. Provisional Patent Application Serial No. 6-/305,542 filed July 13, 2001) which has been licensed to Gunderboom, Inc. pursuant to the Cartridge Filter Technology Development, License, and Assignment Agreement between Reliant Resources, Inc. and by its Subsidiaries, Orion Power Holdings, Inc. and Astoria Generating Company, L.P. and Gunderboom, Inc. dated April 21, 2003.

2. The licenses for the following software used by Astoria L.P. are held by a Non-Company Affiliate:

ABB Ranger
Trader.ems
Fuels Management System
Commercial Operations & Support
Air Bulk Sampling System
ATRisk
“Comprehensive Allowance Management System”
Capital Project Management System
CTAM Web
Drawings Index
EGIS
EGIS Portal
PG&S Web
Engineering Status (Project Management System)
Generation Performance and Reliability
Miss Opportunity Revenue
Outage Scheduling System
Outage Scheduling Optimization
Root Cause Analysis
SharePoint Document Management System
Station / Unit Information Database
RedTag
IFIX & PI Data Feeds (ODBC)
CT Scheduling Rate Program
Dispatch Simulator
Station Planning & Opportunity Tool
Weather Scraper
Allowance Tracking Workstation
Contractor Time and Material
Employee Training & Certification System
GenFuel Tracking
GenFuel — labvantage — interface
Mobile Maintenance Services System
PAXiT
Plantware 32
Primavera
Process Mapping Application
SCT Banner Fuels System
Tool Hound
Welders Qualification System (WQS)
NYISO Bid Tool
NYISO Settlements
SAP
MS Office

Schedule 4.16
Insurance Policies

Reliant Energy Schedule of Policies

Reliant spin off from CenterPoint Energy effective in 2002, so separate policies not written until 2002

											“Companies”
						Limits			Policy	Policy	named
Type of Policy	Status	Coverage	Insurer	Limits	Deductible	Utilized	Policy Number	Insured Name	Begin	End	insured?
Auto Liability	Excluded	Fronting policy — auto liability	Liberty Mutual	2000000	2000000	N/A	AS1-691004228-012	Reliant Resources, Inc.	1/1/2002	1/1/2003
Auto Liability	Excluded	Fronting policy — auto liability	Liberty Mutual	2000000	2000000	N/A	AS1-691004228-013	Reliant Resources, Inc.	1/1/2003	1/1/2004
Auto Liability	Excluded	Fronting policy — auto liability	Liberty Mutual	2000000	2000000	N/A	AS1-691004228-014	Reliant Resources, Inc.	1/1/2004	1/1/2005
Auto Liability	Excluded	Fronting policy — auto liability	Liberty Mutual	2000000	2000000	N/A	AS1-691004228-015	Reliant Energy, Inc.	1/1/2005	1/1/2006
Commercial General Liability	Excluded	Fronting Policy - Commercial General Liability	Liberty Mutual	$2,000,000 each occurrence for general liability and personal and advertising, and products liability $2,000,000 aggregate	Fronting Policy — $2,000,000 deductible	N/A	TB1-691-004228-022	Reliant Resources, Inc.	1/1/2002	1/1/2003
Commercial General Liability	Excluded	Fronting Policy - Commercial General Liability	Liberty Mutual	$2,000,000 each occurrence for general liability and personal and advertising, and products liability $2,000,000 aggregate	Fronting Policy — $2,000,000 deductible	N/A	TB1-691-004228-023	Reliant Resources, Inc.	1/1/2003	1/1/2004
Workers’ Compensation	Excluded	Workers’ Compensation coverage including Employer’s Liability, USL&H, OCS, FELA Large Deductible Program	Liberty Mutual	Workers’ Compensation — statutory Employer’s Liability — $500,000 each accident, bodily injury by disease; policy limit bodily injury by disease; each person	$500,000 each accident	N/A	WA-69D-004228-032	Reliant Resources, Inc.	1/1/2002	1/1/2003
Workers’ Compensation	Excluded	Workers’ Compensation coverage including Employer’s Liability, USL&H, OCS, FELA Large Deductible Program	Liberty Mutual	Workers’ Compensation — statutory Employer’s Liability — $1,000,000 each accident, bodily injury by disease; policy limit bodily injury by disease; each person Maritime Coverage — $1,000,000 each accident, bodily injury by disease; policy limit bodily	$500,000 each accident	N/A	WA-69D-004228-033	Reliant Resources, Inc.	1/1/2003	1/1/2004

											“Companies”
						Limits			Policy	Policy	named
Type of Policy	Status	Coverage	Insurer	Limits	Deductible	Utilized	Policy Number	Insured Name	Begin	End	insured?
Workers’ Compensation	Excluded	Workers’ Compensation coverage including Employer’s Liability, USL&H, OCS, FELA Large Deductible Program	Liberty Mutual	Workers’ Compensation — statutory Employer’s Liability — $1,000,000 each accident, bodily injury by disease; policy limit bodily injury by disease; each person Maritime Coverage — $1,000,000 each accident, bodily injury by disease; policy limit bodily	$500,000 each accident	N/A	WA-69D-004228-034	Reliant Resources, Inc.	1/1/2004	1/1/2005
Workers’ Compensation	Excluded	Workers’ Compensation coverage including Employer’s Liability, USL&H, OCS, FELA Large Deductible Program	Liberty Mutual	Workers’ Compensation — statutory Employer’s Liability — $1,000,000 each accident, bodily injury by disease; policy limit bodily injury by disease; each person Maritime Coverage — $1,000,000 each accident, bodily injury by disease; policy limit bodily	$500,000 each accident	N/A	WA-69D-004228-035	Reliant Energy, Inc.	1/1/2005	1/1/2006
Commercial Crime	Excluded	Form A — Employee Dishonesty Form B — Forgery or Alteration Form C — Theft, Destruction and Disappearance Form D — Robbery and Safe Burglary Form E — Computer Fraud & Funds Transfer Fraud	Continental Casualty Company	$25,000,000 per occurrence	$100,000 per claim	0	169849394	Reliant Resources, Inc.	3/15/2002	3/15/2003
Commercial Crime	Excluded	Form A — Employee Dishonesty Form B — Forgery or Alteration Form C — Theft, Destruction and Disappearance Form D — Robbery and Safe Burglary Form E — Computer Fraud & Funds Transfer Fraud	Continental Casualty Company	$15,000,000 per occurrence	$1,000,000 each wrongful act	0	267852841	Reliant Resources, Inc.	3/15/2003	3/15/2004
Commercial Crime	Excluded	Form A — Employee DishonestyForm B — Forgery or AlterationForm C — Theft, Destruction and DisappearanceForm D — Robbery and Safe BurglaryForm E — Computer Fraud & Funds Transfer Fraud	Continental Casualty Company	$15,000,000 per occurrence	$1,000,000 each wrongful act	0	267852841	Reliant Resources, Inc.	3/15/2004	3/15/2005
Commercial Crime	Excluded	Insuring Agreement 1 — Employee Dishonesty Insuring Agreement 2 — Forgery or Alteration Insuring Agreement 3 — Inside Premises — Money and Securities Insuring Agreement 4 — Inside Premises — Robbery and Safe Burglary Insuring Agreement 5 — Outside th	American Home Assurance Co.	$15,000,000 per occurrence	$1,000,000 each wrongful act	0	4907553	Reliant Energy, Inc.	3/15/2005	3/15/2006

“Companies”

Limits

Policy

Policy

named

Type of Policy

Status

Coverage

Insurer

Limits

Deductible

Utilized

Policy Number

Insured Name

Begin

End

insured?

Directors & Officers Liability

Excluded

Primary directors & officers liability A) Pays the loss of directors and officers for any actual or alleged wrongful act. B) Pays the loss of company to the extent that the company has indemnified the directors and officers. In addition, pays the loss

Various

$110,000,000 per loss and in annual aggregate for both coverages A&B combines, including defense costs.

$0 for individuals $1,000,000 corporate

0

D 2106A1A02

Reliant Resources, Inc.

3/15/2002

3/15/2003

Directors & Officers Liability

Excluded

Primary directors & officers liability A) Pays the loss of directors and officers for any actual or alleged wrongful act. B) Pays the loss of company to the extent that the company has indemnified the directors and officers. In addition, pays the loss

Various

$110,000,000 per loss and in annual aggregate for both coverages A&B combines, including defense costs.

$0 for individuals $10,000,000 corporate

0

D 2106A1A02

Reliant Resources, Inc.

3/15/2003

3/15/2004

Directors & Officers Liability

Excluded

Primary directors & officers liability A) Pays the loss of directors and officers for any actual or alleged wrongful act. B) Pays the loss of company to the extent that the company has indemnified the directors and officers. In addition, pays the loss

Various

$110,000,000 per loss and in annual aggregate for both coverages A&B combines, including defense costs.

$0 for individuals $10,000,000 corporate

0

D 2106A1A04

Reliant Resources, Inc.

3/15/2004

3/15/2005

Directors & Officers Liability — Side A only

Excluded

Classic A-Side Management Liability

XL Specialty

$25,000,000 aggregate each policy period (including defense expenses) This coverage sits excess of D&O program which provides $135,000,000 in limits

N/A

0

ELU088418-05

Reliant Energy, Inc.

3/15/2005

3/15/2006

“Companies”

Limits

Policy

Policy

named

Type of Policy

Status

Coverage

Insurer

Limits

Deductible

Utilized

Policy Number

Insured Name

Begin

End

insured?

Cleanup Cost Cap Policy

Assigned

Clean up costs at covered location pursuant to remedial action plan or beyond the boundaries of a covered location if such cleanup costs are incurred in the cleanup of pollutants which originated from those in a cleanup at a covered location pursuant to the remedial action plan. Insured must provide progress reports on a quarterly basis.

Commerce and Industry Insurance Co.

$100,000,000 Retroactive Date: 7/29/99

$9,956,614 self insured retention; To be amended by endorsement to $8,956,614 due to dropping School Street

$3,585,182 which included School Street; Corrected to $1,920,291 by dropping School Street

CCC 808 67 03

Reliant Energy, Inc.

7/29/1999

7/29/2009

Yes

Environmental

Excluded

CLAIMS MADE POLICY

American Intl Specialty Lines Ins. Co.

$25,000,000 each incident and aggregate per coverage

10% of the loss, subject to a minimum deductible of $5,000 and a maximum deductible of $25,000. Business interruption eductible of 72 hours plus 10% of the loss.

0

PLS 6191030

Reliant Resources, Inc.

5/12/2000

5/12/2003

Environmental

Excluded

PERTAINS TO ORION POWER NEW YORK

American Intl Specialty Lines Ins. Co.

$25,000,000 each incident and aggregate for Coverages G & H $25,000,000 each incident and $50,000,000 aggregate for Coverages A,B,C,D,E,F.I Limits are shared for entire policy term and are shared with Policy # 4763667 for Orion Power Holdings

$1,000,000 each incident for coverages A,C,D,F,G,H $250,000 deductible for coverages B,E,I

0

PLS 6191030

Reliant Resources, Inc.

5/12/2003

4/28/2005

Pollution Liability

Excluded

CLAIMS MADE POLICY — PERTAINS TO ORION POWER NEW YORK FACILITIES

Commerce and Industry Insurance Co.

$100,000,000 each incident limit $100,000,000 aggregate for coverages A.B.C.D.E.F $100,000,000 aggregate for coverages G,H,I

Coverages A,B,C,D,E,F prior to 7/29/99 — $1,000,000 Coverages A,B,C,D,E,F after 7/19/99 — $250,000 East Syracuse and Hydroelectric Facilities — $100,000 Aggregate deductible of $5,000,000 applies to coverages A,B,C,D,E,F

0

PLS 808 67 02

Orion Power Holdings

7/29/1999

7/29/2004

Pollution Liability

Excluded

Coverages A,B,C,D,E, F,I— $100,000 —Applies to OPMW

American Intl Specialty Lines Ins. Co.

$50,000,000 each incident$50,000,000 section aggregate for A — F$50,000,000 section aggregate for G-L$50,000,000 policy aggregate

$250,000 for coverages B,D,F,H,I,J,K,L$1,000,000 for coverages A,C,E,G$3,500,000 aggregate retention

100,015

4763667

Orion Power Holdings

4/28/2000

4/28/2005

Pollution Liability

Excluded

PERTAINS TO ORION POWER NEW YORK — HYDRO ASSETS

American Int’l Specialty Lines Ins. Co.

$100,000,000 each incident limit $100,000,000 Policy limit

Coverages A,B,C,D,E, F,I— $100,000

0

PLS 3779539

Reliant Energy, Incorporated

7/29/2004

7/29/2005

											“Companies”
						Limits			Policy	Policy	named
Type of Policy	Status	Coverage	Insurer	Limits	Deductible	Utilized	Policy Number	Insured Name	Begin	End	insured?
Pollution Liability	Assigned	Coverages A, B, C, D,E, F,G, H, I; Applies to Astoria, Narrows, Gowanus, East Syracuse and Hydroelectric Facilities CLAIMS MADE POLICY — PERTAINS TO ORION POWER NEW YORK FACILITIES	American Int’l Specialty Lines Ins. Co.	$100,000,000 each incident limit $100,000,000 Policy limit Policy limit shared with Cost Cap policy # CCC 8086703	Coverages A,B,C,D,F prior to 7/29/99 — $1,000,000 Coverages B,C,E,F after 7/19/99 — $250,000	0	PLS 3779540	Reliant Energy, Incorporated	7/29/2004	7/29/2006	Yes
Punitive Damages Excess Liability	Excluded	Coverage for punitive damages which have been paid by the insured which would have been covered by the Pollution Legal Liability policy # 8086702 but were prohibited due to state, regulation, or case law PERTAINS TO ORION POWER NEW YORK	Starr Excess Int’l.	$100,000,000 each claim $100,000,000 term aggregate	Deductible applies to underlying policy # 8086702 — Pollution Legal Liability Policy for Orion Power Holdings Coverages A,B,C,D,E,F prior to 7/29/99 — $1,000,000 Coverages A,B,C,D,E,F after 7/19/99 — $250,000 East Syracuse and Hydroelectric Faciliti	0	5553866	Orion Power Holdings	7/29/1999	7/29/2004
Punitive Damages Excess Liability	Excluded	Coverage for punitive damages which have been paid by the insured which would have been covered by the Pollution Legal Liability policy PLS 476 3667 but were prohibited due to state, regulation, or case law Applies to Astoria, Narrows, Gowanus, East Syra	Starr Excess Int’l.	$50,000,000 each claim $50,000,000 term aggregate	Deductible applies to underlying policy # PLS 476 3667 — Pollution Legal Liability Policy for Orion Power Holdings Coverages A,B,C,D,E,F prior to 7/29/99 — $1,000,000 Coverages A,B,C,D,E,F after 7/19/99 — $250,000 East Syracuse and Hydroelectric Fac	0	5554422	Orion Power Holdings	4/28/2000	4/28/2005
Punitive Damages Excess Liability	Assigned	Coverage for punitive damages which have been paid by the insured which would have been covered by the Pollution Legal Liability policy # 3799539 but were prohibited due to state, regulation, or case law PERTAINS TO ORION POWER NEW YORK — NYC ASSETS	Starr Excess Int’l.	$100,000,000 each claim $100,000,000 term aggregate		0	5373575	Reliant Energy, Incorporated	7/29/2004	7/29/2006	Yes

											“Companies”
						Limits			Policy	Policy	named
Type of Policy	Status	Coverage	Insurer	Limits	Deductible	Utilized	Policy Number	Insured Name	Begin	End	insured?
Punitive Damages Excess Liability	Excluded	Coverage for punitive damages which have been paid by the insured which would have been covered by the Pollution Legal Liability policy # 3799539 but were prohibited due to state, regulation, or case law PERTAINS TO ORION POWER NEW YORK — HYDRO ASSETS	Starr Excess Int’l.	$100,000,000 each claim $100,000,000 term aggregate		0	5373574	Reliant Energy, Incorporated	7/29/2004	7/29/2005
Underground Storage Tank Liability	Excluded	Third party off-site liability and cleanup coverage for above and under ground storage tanks. Also has coverage for corrective action and cleanup. Pertains to one 15,000 tank at 1047 Belmont Avenue, Niles Ohio PERTAINS TO ORION POWER MIDWEST	Commerce and Industry Insurance Co.	$1,000,000 each incident $1,000,000 aggregate limit $250,00 aggregate defense expense limit	10000	0	UST 8086863	Orion Power Holdings	4/28/2002	4/28/2003
Vessel Pollution Liability	Excluded	Vessel Owners Pollution Liability - Gowanus and Narrows barges	Great American	$250,000 Per Occurrence for Limited Civil Penalties $100,000 Per Occurrence for Public Relations Policy Limit — Fire Fighting & Salvage	None	0	OMH3491197-00	Reliant Resources, Inc.	6/24/2002	6/24/2003
Vessel Pollution Liability	Excluded	Vessel Owners Pollution Liability - Gowanus and Narrows barges	Great American	$5,000,000 per vessel for Removal costs, Spill Liability, Defense Costs, Firefighting and Salvage $250,000 Per Occurrence for Limited Civil Penalties $100,000 Per Occurrence for Public Relations Policy Limit — Fire Fighting & Salvage	None	0	OMH3491197-01	Reliant Resources, Inc.	6/24/2003	6/24/2004
Vessel Pollution Liability	Excluded	Vessel Owners Pollution Liability - Gowanus and Narrows barges Includes Terrorism Coverage	Great American	$5,000,000 per vessel for Removal costs, Spill Liability, Defense Costs, Firefighting and Salvage $250,000 Per Occurrence for Limited Civil Penalties $100,000 Per Occurrence for Public Relations Policy Limit — Fire Fighting & Salvage	None	0	OMH 3491197-02	Reliant Resources, Inc.	6/24/2004	6/24/2005

“Companies”

Limits

Policy

Policy

named

Type of Policy

Status

Coverage

Insurer

Limits

Deductible

Utilized

Policy Number

Insured Name

Begin

End

insured?

Excess Liability

Excluded

Second layer of excess liability bringing total to $135,000,000 First layer contained in RRI policy

Energy Insurance Mutual

$100,000,000 each occurrence $100,000,000 annual aggregate

Underlying limit of $35,000,000

0

501216-01CGL

Orion Power Holdings

8/1/2001

8/1/2003

Excess Liability

Excluded

Third layer of excess liability program. Brings total up to $310,000,000

OCIL

$150,000,000.00

Underlying policies totaling $160,000,000

0

U91140203

Reliant Resources, Inc.

3/15/2002

3/15/2003

Excess Liability

Excluded

Second layer of excess liability bringing to $160,000,000. Follow form AEGIS

Energy Insurance Mutual

$125,000,000 each occurrence $125,000,000 annual aggregate

Underlying limit of $35,000,000

0

501247-02GL

Reliant Resources, Inc.

3/15/2002

3/15/2003

Excess Liability

Excluded

Fourth and final layer of excess liability program bringing total coverage to $400,000,000

Lloyds

$90,000,000 any one occurrence and in the aggregate

Underlying insurance of $310,000,000

0

ARS-3194

Reliant Resources, Inc.

3/15/2002

3/15/2003

Excess Liability

Excluded

Third party liability including bodily injury, property damage, or personal injury caused by an occurrence. CLAIMS MADE POLICY.

Various

$400,000,000

$2,000,000 any one occurrence, except $100,000 for aircraft liability $1,000,000 for RE Solutions $250,000 for RE Indian River and various other levels as set forth in the declarations of the policy

0

X2106A1A02

Reliant Resources, Inc.

3/15/2002

3/15/2003

Excess Liability

Excluded

Third party liability including bodily injury, property damage, or personal injury caused by an occurrence. CLAIMS FIRST MADE POLICY. Includes Terrorism Coverage ($20,000 premium included)

Various

$300,000,000

$2,000,000 any one occurrence, except $100,000,000 for aircraft liability $1,000,000 for RE Solutions $250,000 for RE Indian River, El Dorado, and various other levels as set forth in the declarations of the policy

0

X2106A1A03

Reliant Resources, Inc.

3/15/2003

3/15/2004

Excess Liability

Excluded

Third party liability including bodily injury, property damage, or personal injury caused by an occurrence. CLAIMS FIRST MADE POLICY. Includes Terrorism Coverage ($20,000 premium included)

Various

$150,000,000

$2,000,000 any one occurrence, except $100,000,000 for aircraft liability $1,000,000 for RE Solutions $250,000 for Indian River and El Dorado, and various other levels as set forth in the declarations of the policy

0

X2106A1A04

Reliant Energy, Incorporated

3/15/2004

3/15/2005

“Companies”

Limits

Policy

Policy

named

Type of Policy

Status

Coverage

Insurer

Limits

Deductible

Utilized

Policy Number

Insured Name

Begin

End

insured?

Excess Liability

Excluded

Third party liability including bodily injury, property damage, or personal injury caused by an occurrence. CLAIMS FIRST MADE POLICY. Includes Terrorism Coverage ($34,121 premium included)

Various

$!50,000,000

$2,000,000 any one occurrence, except $250,000 for El Dorado, $1,000,000 for Channelview Some higher limits for underlying Pollution Legal Liability for OPNY

0

X2106A1A05

Reliant Energy, Incorporated

3/15/2005

3/15/2006

Fiduciary & Employee Benefits Liability

Excluded

Coverage for alleged wrongful acts, errors and/or omissions related to administration or handling of employee benefit plans.

AEGIS

$25,000,000 each wrongful act $25,000,000 aggregate limit of liability

$200,000 deductible per claim

0

F2106A1A02

Reliant Resources, Inc.

3/15/2002

3/15/2003

Fiduciary & Employee Benefits Liability

Excluded

Coverage for alleged wrongful acts, errors and/or omissions related to administration or handling of employee benefit plans.

AEGIS

$25,000,000 each wrongful act $25,000,000 aggregate limit of liability Shared terrorism limits of $250,000,000 with AEGIS excess liability policy

$0 for each natural person who is an insured $2,500,000 aggregate for Sponsor Organization and all Employee Benefit Programs with respect to each Wrongful Act 12% Coinsurance

0

F2106A1A03

Reliant Resources, Inc.

3/15/2003

3/15/2004

Fiduciary & Employee Benefits Liability

Excluded

Coverage for alleged wrongful acts, errors and/or omissions related to administration or handling of employee benefit plans.

AEGIS

$25,000,000 each wrongful act $25,000,000 aggregate limit of liability

$0 for each natural person who is an insured $2,500,000 aggregate for Sponsor Organization and all Employee Benefit Programs with respect to each Wrongful Act 12% Coinsurance

0

F2106A1A04

Reliant Resources, Inc.

3/15/2004

3/15/2005

Fiduciary & Employee Benefits Liability

Excluded

Coverage for alleged wrongful acts, errors and/or omissions related to administration or handling of employee benefit plans.

AEGIS

$25,000,000 each wrongful act$25,000,000 aggregate limit of liability

$0 for each natural person who is an insured $2,500,000 aggregate for Sponsor Organization and all Employee Benefit Programs with respect to each Wrongful Act12% Coinsurance

0

F2106A1A05

Reliant Energy, Inc.

3/15/2005

3/15/2006

Boiler & Machinery - - Jurisdictional

Excluded

Boiler & Machinery - jurisdictional loss control inspections

XL Insurance America, Inc.

5000

5000

0

CP003-78-15-05

Reliant Energy, Inc.

3/1/2005

3/1/2006

Property

Excluded

Operational Property, Boiler & Machinery and Business Interruption

Various

$300MM subject to sublimits: $50MM CA quake, $150MM flood, $50MM Netherlands flood, $25MM Property in Course of Construction, $25MM or 25% of loss Removal of Debris, $25MM Expediting Expenses, $25MM Newly Acquired Locations, $25MM inland transit

$5,000,000 each occurrence, 60 days waiting period for Equistar, El Dorado, Orion otherwise, 90 days all other units

None on the assets subject to this PSA

ARS3229 — ARS 3235

Reliant Resources, Inc.

5/1/2002

5/1/2003

“Companies”

Limits

Policy

Policy

named

Type of Policy

Status

Coverage

Insurer

Limits

Deductible

Utilized

Policy Number

Insured Name

Begin

End

insured?

Property

Excluded

Operational Property, Boiler & Machinery and Business Interruption

Various

$300MM subject to sublimits: $50MM CA quake, $150MM flood, $25MM Property in Course of Construction, $5MM or 25% of loss to a maximum of $35MM for Removal of Debris, $25MM Expediting Expenses, $25MM Newly Acquired Locations, $25MM inland transit

$5,000,000 each occurrence except $1,000,000 each occurrence for Liberty, $2,500,000 for Sabine. 60 days waiting period for Liberty, Equistar, El Dorado, Orion Midwest and New York, otherwise, 90 days all other units.

None on the assets subject to this PSA

ARS3692 — ARS3696

Reliant Resources, Inc.

5/1/2003

11/1/2005

Property

Excluded

Excess Property (no BI) Drops down to $10 MM for terrorism not included in underlying layers ($250 MM limit)

OIL

$250,000,000 each occurrence except $1B for any one event involving OIL members

$10,000,000 each occurrence for sabotage and terrorism, flood and quake.

None on the assets subject to this PSA

2002-219

Reliant Resources, Inc.

1/1/2004

1/1/2005

Coverages A (on site cleanup of pre-existing conditions), B (on site cleanup of new conditions), C (third party claims for onsite BI and PD), D (third party claims for offsite cleanup resulting from pre-existing conditions), E (third party claims for offsite cleanup resulting from new conditions), F (third party claims for offsite BI and PD), G (third party claims for onsite cleanup costs — nonowned locations), H (third party claims for offsite BI and PD at nonowned locations), I (pollutions conditions resulting from transported cargo) Applies to Astoria, Narrows, Gowanus, East Syracuse and Hydroelectric Facilities

Schedule 4.17
Affiliate Transactions

4.17(a)

Tax Sharing Agreement dated effective as of October 1, 2002, by and among Reliant Energy, Inc., and each other affiliated entity listed on Schedule A thereto

Tax Allocation Agreement By and Among Reliant Energy, Incorporated (now CenterPoint) and its Affiliated Companies and Reliant Resources, Inc. (now Reliant Energy, Inc.) and its Affiliated Companies effective as of December 31, 2000

4.17(b)

Iroquois Contract

4.17(c)

Astoria Generating Company, LP and OPOS Astoria: Non-Company Affiliate Services

Function	Representative Activities1
Technical/Engineering	•     Provide project specific technical support
	•     Perform Reliant Lab testing
	•     Provide technical expertise during major outages
	•     Develop and implement corporate maintenance programs
	•     Provide mobile maintenance services
Environmental	•     Oversee permitting and compliance issues
	•     Support management of corporate emissions credit allocations and purchases
Purchasing	•     Provide plants with access to group purchasing programs (procurement contracting)
Safety/Training	•     Establish and implement company wide safety standards, manage training programs
Dispatch/Bidding/Commercial/Risk	•     Bid plant into market
Management/Trading	•     Manage dispatch decisions
	•     Identify and capitalize upon commercial opportunities (e.g., bilateral sales)
Origination	•     Originate deals
Analysis/Structuring	•     Analyze/price commercialization opportunities
Accounting	•     Manage accounting information system
	•     General accounting and related entries
	•     Accounts Payable
	•     Accounts Receivable
	•     Account analysis and review
	•     Fixed asset and intangible maintenance
	•     Financial reporting
	•     Compliance as needed
Settlements	•     Manage daily NYISO settlement process, resolve disputes

Function	Representative Activities1
Human Resources	•     Manage benefits programs, payroll, employee relations (bargaining/non-bargaining)
	•     Compensation design and delivery
	•     Recruiting - Processing background checks
	•     Training — EEI testing
Legal	•     Provide legal services (support transactions, litigation)
Fuel Management	•     Manage fuel purchases and emission allowance transactions
Transmission & Transportation Procurement	•     Management fuel transportation/transmission requirements
Regulatory	•     Manage regulatory relations, collect and input data required by regulatory agencies
IT Technical	•     Support and manage information technology infrastructure
Administrative, Budgeting	•     Perform general administrative, accounting/budgeting support
Insurance	•     Purchase and manage insurance policies, manage claims process
Treasury/Financial Support/Credit	•     Ensure entity has sufficient cash on hand to meet its obligations
	•     Manage credit support (collateral postings, letters of credit)
	•     Banking relationships, wire transfers
	•     Review of pension plan portfolio and making funding payments to the pension trust
	•     Corporate Insurance evaluation, procurement, payment and claims processing
	•     Automobile liability
	•     Worker’s Compensation
	•     Payroll Services
Tax	•     Federal
	•     Planning
	•     Calculation of current and deferred tax expense
	•     Preparation of tax returns
	•     Respond to taxing authority inquiries and audits
	•     State and local
	•     Planning
	•     Calculation of current and deferred tax expense
	•     Preparation of tax returns
	•     Respond to taxing authority inquiries and audits
	•     Property

Notes

1).      Provided services include but are not limited to Representative Activities

Schedule 4.18
Permits

The attachment to Schedule 3.03(c) is incorporated herein by reference.

Schedule 4.19(a)
Sufficiency of Assets

All of the Intellectual Property listed on Schedule 4.13(a)

RES gas transportation contracts

Iroquois Contract

Schedule 4.19(b)
Estimated Allowances

Other than allowances that are required to be surrendered prior to Closing

ASTORIA

ACID RAIN AND NOx BUDGET ALLOCATIONS

Acid Rain*				NOx**
	SO2
Station/Unit	2005 - 2035			Station	Unit		Year		Block
Astoria 20		20		Astoria		20		2005		23
Astoria 30		30	800	Astoria		20		2006		52
Astoria 40		40	1000	Astoria		20		2007		54
Astoria 50		50	1000	Astoria		20		2008		57
				Astoria		30		2004		24
				Astoria		30		2005		437
				Astoria		30		2006		495
				Astoria		30		2007		508
				Astoria		30		2008		539
				Astoria		40		2004		20
				Astoria		40		2005		608
				Astoria		40		2006		541
				Astoria		40		2007		555
				Astoria		40		2008		492
				Astoria		50		2004		24
				Astoria		50		2005		649
				Astoria		50		2006		538
				Astoria		50		2007		552
				Astoria		50		2008		479
				Astoria		CT1		2005		3
				Astoria		CT1		2006		3
				Astoria		CT1		2007		3
				Astoria	Overdraft			2004		11
				Astoria	Overdraft			2004		9

*	The acid rain allowance surrender date is March 1st.
**	The Federal NOx Budget allowance surrender date is November 30th.

Narrows
NOx Budget Allocations

NOx Budget Allocations^*

NOx

Station	Unit		Year		Block
Narrows		1-1		2004		1
Narrows		1-1		2005		34
Narrows		1-1		2006		51
Narrows		1-1		2007		52
Narrows		1-1		2008		45
Narrows		1-2		2004		1
Narrows		1-2		2005		37
Narrows		1-2		2006		64
Narrows		1-2		2007		66
Narrows		1-2		2008		57
Narrows		1-3		2004		1
Narrows		1-3		2005		34
Narrows		1-3		2006		58
Narrows		1-3		2007		60
Narrows		1-3		2008		51
Narrows		1-4		2004		1
Narrows		1-4		2005		36
Narrows		1-4		2006		57
Narrows		1-4		2007		59
Narrows		1-4		2008		51
Narrows		1-5		2004		1
Narrows		1-5		2005		32
Narrows		1-5		2006		69
Narrows		1-5		2007		71
Narrows		1-5		2008		61
Narrows		1-6		2004		1
Narrows		1-6		2005		36
Narrows		1-6		2006		70
Narrows		1-6		2007		72
Narrows		1-6		2008		62
Narrows		1-7		2004		1
Narrows		1-7		2005		33
Narrows		1-7		2006		66
Narrows		1-7		2007		68
Narrows		1-7		2008		59
Narrows		1-8		2004		1

^* The Federal NOx Budget allowance surrender date is November 30th.

Station	Unit		Year		Block
Narrows		1-8		2005		33
Narrows		1-8		2006		51
Narrows		1-8		2007		52
Narrows		1-8		2008		45
Narrows		2-1		2004		1
Narrows		2-1		2005		28
Narrows		2-1		2006		48
Narrows		2-1		2007		49
Narrows		2-1		2008		42
Narrows		2-2		2004		1
Narrows		2-2		2005		28
Narrows		2-2		2006		38
Narrows		2-2		2007		39
Narrows		2-2		2008		34
Narrows		2-3		2004		1
Narrows		2-3		2005		23
Narrows		2-3		2006		56
Narrows		2-3		2007		57
Narrows		2-3		2008		49
Narrows		2-4		2004		1
Narrows		2-4		2005		20
Narrows		2-4		2006		40
Narrows		2-4		2007		41
Narrows		2-4		2008		36
Narrows		2-5		2004		1
Narrows		2-5		2005		28
Narrows		2-5		2006		41
Narrows		2-5		2007		42
Narrows		2-5		2008		36
Narrows		2-6		2004		1
Narrows		2-6		2005		27
Narrows		2-6		2006		49
Narrows		2-6		2007		51
Narrows		2-6		2008		44
Narrows		2-7		2004		1
Narrows		2-7		2005		27
Narrows		2-7		2006		40
Narrows		2-7		2007		41
Narrows		2-7		2008		36
Narrows		2-8		2004		1
Narrows		2-8		2005		28
Narrows		2-8		2006		51
Narrows		2-8		2007		52
Narrows		2-8		2008		45
Narrows	Overdraft			2004		2

Gowanus
NOx Budget Allocations

NOx Budget Allocations^*

NOx

Station	Unit		Year		Block
Gowanus		1-1		2005		14
Gowanus		1-1		2006		14
Gowanus		1-1		2007		14
Gowanus		1-1		2008		14
Gowanus		1-2		2005		16
Gowanus		1-2		2006		14
Gowanus		1-2		2007		15
Gowanus		1-2		2008		15
Gowanus		1-3		2005		15
Gowanus		1-3		2006		15
Gowanus		1-3		2007		15
Gowanus		1-3		2008		14
Gowanus		1-4		2005		14
Gowanus		1-4		2006		16
Gowanus		1-4		2007		16
Gowanus		1-4		2008		15
Gowanus		1-5		2005		15
Gowanus		1-5		2006		16
Gowanus		1-5		2007		16
Gowanus		1-5		2008		15
Gowanus		1-6		2005		17
Gowanus		1-6		2006		16
Gowanus		1-6		2007		17
Gowanus		1-6		2008		8
Gowanus		1-7		2005		13
Gowanus		1-7		2006		15
Gowanus		1-7		2007		15
Gowanus		1-7		2008		14
Gowanus		1-8		2005		15
Gowanus		1-8		2006		16
Gowanus		1-8		2007		17
Gowanus		1-8		2008		16
Gowanus		2-1		2004		1
Gowanus		2-1		2005		22
Gowanus		2-1		2006		17
Gowanus		2-1		2007		17
Gowanus		2-1		2008		26
Gowanus		2-2		2005		18

^* The Federal NOx Budget allowance surrender date is November 30th.

Station	Unit		Year		Block
Gowanus		2-2		2006		20
Gowanus		2-2		2007		20
Gowanus		2-2		2008		22
Gowanus		2-3		2005		22
Gowanus		2-3		2006		21
Gowanus		2-3		2007		22
Gowanus		2-3		2008		23
Gowanus		2-4		2004		1
Gowanus		2-4		2005		23
Gowanus		2-4		2006		20
Gowanus		2-4		2007		21
Gowanus		2-4		2008		33
Gowanus		2-5		2004		1
Gowanus		2-5		2005		16
Gowanus		2-5		2006		23
Gowanus		2-5		2007		23
Gowanus		2-5		2008		27
Gowanus		2-6		2005		19
Gowanus		2-6		2006		22
Gowanus		2-6		2007		23
Gowanus		2-6		2008		24
Gowanus		2-7		2005		17
Gowanus		2-7		2006		23
Gowanus		2-7		2007		23
Gowanus		2-7		2008		25
Gowanus		2-8		2005		23
Gowanus		2-8		2006		24
Gowanus		2-8		2007		24
Gowanus		2-8		2008		26
Gowanus		3-1		2004		1
Gowanus		3-1		2005		18
Gowanus		3-1		2006		22
Gowanus		3-1		2007		23
Gowanus		3-1		2008		24
Gowanus		3-2		2004		1
Gowanus		3-2		2005		18
Gowanus		3-2		2006		19
Gowanus		3-2		2007		19
Gowanus		3-2		2008		21
Gowanus		3-3		2005		14
Gowanus		3-3		2006		17
Gowanus		3-3		2007		18
Gowanus		3-3		2008		19
Gowanus		3-4		2004		1
Gowanus		3-4		2005		14
Gowanus		3-4		2006		19

Station	Unit		Year		Block
Gowanus		3-4		2007		19
Gowanus		3-4		2008		20
Gowanus		3-5		2005		19
Gowanus		3-5		2006		21
Gowanus		3-5		2007		22
Gowanus		3-5		2008		23
Gowanus		3-6		2004		1
Gowanus		3-6		2005		11
Gowanus		3-6		2006		23
Gowanus		3-6		2007		24
Gowanus		3-6		2008		25
Gowanus		3-7		2005		11
Gowanus		3-7		2006		23
Gowanus		3-7		2007		23
Gowanus		3-7		2008		25
Gowanus		3-8		2004		1
Gowanus		3-8		2005		18
Gowanus		3-8		2006		21
Gowanus		3-8		2007		22
Gowanus		3-8		2008		23
Gowanus		4-1		2005		11
Gowanus		4-1		2006		13
Gowanus		4-1		2007		13
Gowanus		4-1		2008		14
Gowanus		4-2		2005		18
Gowanus		4-2		2006		12
Gowanus		4-2		2007		12
Gowanus		4-2		2008		13
Gowanus		4-3		2005		17
Gowanus		4-3		2006		11
Gowanus		4-3		2007		11
Gowanus		4-3		2008		11
Gowanus		4-4		2005		15
Gowanus		4-4		2006		10
Gowanus		4-4		2007		10
Gowanus		4-4		2008		10
Gowanus		4-5		2005		13
Gowanus		4-5		2006		13
Gowanus		4-5		2007		13
Gowanus		4-5		2008		14
Gowanus		4-6		2005		10
Gowanus		4-6		2006		12
Gowanus		4-6		2007		13
Gowanus		4-6		2008		13
Gowanus		4-7		2005		18
Gowanus		4-7		2006		12

Station	Unit		Year		Block
Gowanus		4-7		2007		13
Gowanus		4-7		2008		12
Gowanus		4-8		2005		18
Gowanus		4-8		2006		11
Gowanus		4-8		2007		11
Gowanus		4-8		2008		10
Gowanus	Overdraft			2004		1
Gowanus	Overdraft			2004		11
Gowanus	Overdraft			2004		7
Gowanus	Overdraft			2004		13

Parts 237 and 238
New York
SO2 and NOx Allowances
Astoria Generating Co. LP

	Total NOx Part 237*
	04-05, 05-06, 06-07,07-08 NY		Total SO2 Part 238**		Total SO2 Part 238**
	Allocation		2005-2007		2008
Station/Unit	(NY Non-Ozone Season)		Allocation		Allocation
Astoria 20 (NY)		10		0		0
Astoria 30 (NY)		737		1023		981
Astoria 40 (NY)		718		992		952
Astoria 50 (NY)		835		625		599
Reliant Energy General NOx (2004-05) Purchase		200
TOTAL		2,500		2640		2532

Note: 237 and 238 allocations do not apply to Gowanus and
Narrows.

*	The state level NOx allowance surrender date is September 30th. However, the surrender date for the 2004-2005 non-ozone compliance season has been extended to November 29, 2005.
**	The state level SO2 Acid Deposition Reduction allowance surrender date is March 1st.

Schedule 5.03(c)
Buyer Governmental Approvals

1. New York State Department of Environmental Conservation (“NYSDEC”) Permits/Registrations — the following permits subject to New York Codes, Rules and Regulations Title 6 (“6 NYCRR”), Part 621 Applications for Permit Transfer will require notification of change in upstream equity ownership upon closing. These permits are held by Astoria Generating Company, L.P. (for a complete listing of these permits, see Schedule 3.03(c)-Attachment):

• State Pollutant Discharge Elimination System (water discharge permits)

• Title IV, Article 19 (air permits) and companion regulations at 6 NYCRR Parts 201, 203, & 215

• Title V (air permits)

• Section 401 Water Quality Certification

• Environmental Conservation Law Article 15 (stream disturbance permits)

2. New York City Fire Department (“NYCFD”) Permits/Licenses

     Notification to the NYCFD will be required prior to transfer of any permits and licenses not held in the name of Astoria Generating Company, L.P.

3. New York State Department of Public Service Approvals

     Written notice of the indirect transfer of Certificates of Environmental Compatibility and Public Need issued under Article X resulting from the sale of the partnership interests in Astoria Generating Company, L.P. must be provided to the Secretary of the Department of Public Service.

     The sale to Buyer of the partnership interests in Astoria Generating Company, L.P. is subject to the prior approval of the Public Service Commission pursuant to Public Service Law Section 70.

     The encumbrance of the assets owned by Astoria Generating Company, L.P. pursuant to the credit arrangements Buyer will put in place is subject to the prior approval of the Public Service Commission pursuant to Public Service Law Section 69.

4. Federal Energy Regulatory Commission Approvals (“FERC”)

     Section 203 Application for transfer of ownership of the FERC jurisdictional facilities must be approved in advance by FERC.

5. Federal Communications Commission (“FCC”)

     FCC approval required for transfer of ownership or control of radio licenses.

6. New York State Office of General Services (“OGS”)

     Corrective notice to OGS relating to assignment of the easement for lands underwater to Astoria Generating Company, L.P. from Con Ed may be required.

7. NYSDEC Consent Orders

     The prior written approval of NYSDEC is required to replace Non-Company Affiliates that are consent parties (see Schedule 4.12).

8. Hart-Scott-Rodino Act

     Applicable requirements under the HSR Act

Schedule 6.02
Certain Permitted Actions

     1. Iroquois Contract

     Astoria LP may, with the consent of Buyer, take such actions to succeed Reliant Energy Services, Inc. in interest and become a “Replacement Shipper” under the Iroquois Contract and, if successful in the bidding process, may enter into the following agreements:

     (a) Agreement Regarding Permanent Release of Long Term Firm Capacity.

     (b) Blanket Gas Transportation Contract for Firm Reserved Service with Replacement Shipper.

     (c) Gas Transportation Contracts for Firm Reserved Service

     (d) Pre-payment Agreement; and

     (e) Blanket Capacity Release Agreement.

     2. Blackstart

     Negotiation and execution of:

     (a) Sharing Agreement with NRG with respect to Blackstart services

     (b) Settlement Agreement for retroactive Blackstart revenues

     3. Undertaking an overhaul on Astoria LP Unit 30; including turbine instrumentation upgrade, freshwater cooler replacement, feed water heater replacement, preheater basket change out, and ID fan duct work replacement.

     4. Continuing compliance with NYDEC Consent Order (see Schedule 4.12)

     5. Borrowings under the intercompany revolving notes executed by OPNY LP in favor of Seller Guarantor.

     6. Renewal and/or extension of the Repowering Federal Aviation Administration Permit (see Schedule 4.07, item 4).

Schedule 6.02(a)(iii)
Certain Interim Period Expenditures

1.	Schedule 6.02(b)(iv) is incorporated herein by reference.
2.	Estimated remediation activities between October 1, 2005 and April 2006

A.	Narrows
	Bi-monthly Product Recovery — $15,400
B.	Astoria
	Tank FO6-5 investigation — $68,000 Consent Order Activities — $65,100 Hazardous Waste Storage Area sewer line project — $186,000

Schedule 6.02(b)(iv)
Capital Expenditures

US $14,000,000^*

	Oct		Nov		Dec		Q4 2005		Jan		Feb		Mar		Apr		Q1 2005
Astoria
Astoria Intake Screen-Phase 1 - Stl		1,390		1,450		1,430		4,270		—		—		—		—		—
AFB/WW Test Program		—		—		—		—		110		110		110		110		440
U3 Turbine Supervisory Instrumentation Upgrade		—		30		30		60		—		—		90		90		180
U3 Freshwater Cooler Replacement		—		—		—				—		—		—		210		210
Feed Water Heater Replacement		—		520		280		800		—		—		—		—		—
U3 Air Preheater Basket Changeout		—		460		460		920		—		—		—		—		—
U3 Turbine Blade Replacement		—		300		300		600		—		—		—		—
Unit 3 ID Fan Duct Work Replacement		—		—		—				—		—		1,990		1,990		3,980
Astoria Capital		1,390		2,760		2,500		6650		110		110		2,190		2,400		4,810	11,460
Replace Diesel Engine (unit 1-4)		—		—		—				—		—		90		—		90
Flame Scanner Upgrades (5 units)		—		—		—				—		—		60		—		60
Replace GGT1 138kv Transmission Tower		—		—		—				—		120		120		—		240
NEW MVAR / FREQUENCY CONTROLS (GT2/GT3)		—		—		—				—		120		—		120		240
Modular Lockout /Tag Out Facility		—		—		—				—		120		—		120		240
Major Overhaul w /Mod Fit Hook Mod Unit 2-7		—		—		—				—		120		120		120		360
Major Overhaul w /Mod Fit Hook Mod Unit 2-3		—		—		—				—		120		120		120		360
Inlet Plenum Expansion Joint Repairs barges1,2,3		—		—		—				—		120		120		120		360
REPLACE LOWER STACK ENCLUSURE / DIFFUSER		—		—		—				—		120		120		120		360
REPLACE RADIATOR BANKS (8 UNITS)		—		—		—				—		120		120		120		360
Gowanus Capital				—		—		—		—		960		870		840		2,670	2,670
Narrows — Flame Scanner Upgrades — Stl		—		20		—				—		—		—		—		—
Narrows — Transfer SW, HZ Contrller -Stl		—		—		60				—		—		—		—		—

^* Projects include: Astoria Unit 30 Outage and associated projects, Astoria Pilot Intake Structure & Test Program, Gowanus Outages and associated projects, and Narrows Outages and associated projects.

	Oct		Nov		Dec		Q4 2005		Jan		Feb		Mar		Apr		Q1 2005
NGT Barges Cathodic protection anodes		—		—		—				—		—		—		—		—
Replace Diesel Engine (unit 2-8)		—		—		—				—		30		60		—		90
Replace Diesel Engine (unit 2-5)		—		—		—				—		30		60		—		90
Flame Scanner Upgrades (5 units)		—		—		—				—		—		60		—		60
Replace/Repair Inlet Plenum Expansion Joints barge No.2		—		—		—				—		60		60		—		120
Install new warehouse heating system (53rd street)		—		—		—				—		—		—		—		—
NEW MVAR / FREQUENCY CONTROLS (GT1/GT2)		—		—		—				—		—		120		—		120
Modular Lock out & Tag out facility		—		—		—				—		120		—		120		240
Major Overhaul w/hook fit modification (2-7)		—		—		—				—		120		120		120		360
Replace Lower Exhaust Plenum/Diffusers		—		—		—				—		120		—		—		120
Replace Radiator Banks (8 units)		—		—		—				—		60		60		60		180
Barge No. 1 Exhaust Stack Replacement		—		—		—				—		370		300		—		670
Narrows Capital				20		60		80		—		910		840		300		2,050	2,130
NYC		1,390		2,780		2,560		4,350		110		1,980		3,900		3,540		9,530	16,260

Schedule 6.05(a)
Support Obligations

(as of 9/27/2005)

Astoria

Letters of Credit
(issued in the ordinary course of business to secure payment obligations under contracts)

Westport Petroleum	$	1,000	(expires 12/30/05)(1)
Dominion Energy Marketing	$	1,500,000	(expires 6/30/06 — auto renew)
Constellation Energy
Commodities, Inc.	$	3,500,000	(expires 7/12/06 — auto renew)
Vitol S.A.	$	1,000	(expires 12/30/05) (1)
Trafigura	$	14,000,000	(expires 10/31/05) (1)
Corporate Guaranties
Glencore Ltd.(2)	$	5,000,000
George E. Warren(2)	$	2,000,000

General Guaranties

Consolidated Edison Company of New York, Inc (“ConEd”) — A guarantee by Seller of the payment and performance of Astoria LP’s covenants, agreements, obligations, liabilities, representations and warranties under that certain Generating Plant and Turbine Asset Purchase and Sale Agreement by and between Astoria LP and ConEd, dated as of March 2, 1999

Department of Homeland Security, United States Coast Guard — A guarantee by Seller to discharge Astoria LP’s liability, if any, with respect to specified vessels for costs and damages arising under certain sections of the Oil Pollution Act of 1990 and the Comprehensive Environmental Response, Compensation, and Liability Act

Notes:
(1)	Current expiration date is shown. The credit support provided by Non-Company Affiliates to these parties may be (a) extended and/or the dollar amount increased in the event that Astoria LP enters into additional transactions for oil supply or (b) reduced upon the completion of current transactions; provided that any such actions are in accordance with the provisions of the PSA.
(2)	These guaranties from Non-Company Affiliates are maintained for support of potential spot transactions with these oil suppliers. As of the date shown above, no current transactions are in effect.

Schedule 6.06
Excluded Assets

Blackstart revenues from the NYISO attributable to the period from September 2002 to August 2005

Payments and/or reimbursements received from NRG pursuant to the A-10 Dock Sublicense Agreement between Astoria Gas Turbine Power, LLC and Astoria Generating Company, L.P. dated August 25, 2005 attributable to pre-Closing periods

Any proceeds with respect to adjusted NYISO settlements attributable to the period from March 2000 to Closing^*

Payments received pursuant to the property tax claims below:

• Orion Power Holdings, et al. v. New York City Tax Commission, et al., New York State Supreme Court, Kings County, Index Nos. 41686-01, 42649-02, 41603-03

• Orion Power Holdings, et al. v. New York City Tax Commission, et al., New York State Supreme Court, Queens County, Index Nos. 103912-01, 103556-02, 103825-03

• Astoria Generating Company, L.P. v. Tax Commission, 32592/2004, Kings County

• Astoria Generating Company, L.P. v. Tax Commission, 100271-04, Queens County

• Any tax refund payment attributable to Astoria Generating Company, L.P. property tax controversy for tax year 2005-2006 related to plant misclassification issues, to the extent relating to pre-Closing periods.

^* PSA to be revised to include indemnity from Seller to Buyer for payments owed, if any, to NYISO pursuant to such settlements.

Schedule 6.07
Terminated Contracts

Tax Sharing Agreement dated effective as of October 1, 2002, by and among Reliant Energy, Inc., and each other affiliated entity listed on Schedule A thereto

Schedule 6.09
Scheduled Insurance Policies

Pollution Legal Liability Select® Policy issued by American International Specialty Lines Insurance Company (Policy period: July 29, 2004 through July 29, 2006)

Cleanup Cost Cap Insurance policy issued by C&I Commerce and Industry Insurance Company (Policy period: July 29, 1999 through July 29, 2009)

Punitive Damage Liability Insurance Policy issued by Starr Excess International, Bermuda Branch (Policy period: July 29, 2004 through July 29, 2006)

Schedule 6.14(c)
Affiliate Employees

Andrew Oliver            Senior Environmental Specialist

Schedule 6.14(i)
Certain Retirees

Inactive Astoria Participants as of September 29, 2005

Last Name	First Name	Union/Non-Union
Allen	William	union	life
Baldi	Joseph	union	life
Benze	Robert	union	life
Camilleri	Victor	nonunion	life
Carabello	Paul	union	life
Cardona	Benjamin	union	life
Clarke	Gladstone	union	life
Cruz	Victor	union	life
Dalo	Nathan	union	life
Dopyera	Richard	union	life
Ehnes	Gustave	nonunion	life/medical/dental
Fleck	Edward	nonunion	life/medical
Fichter	John	union	life
Glaser	Karl	nonunion	life
Grant	Britan	union	life
Gregoretti	Giuliano	union	life
Gyori	Willi	union	life
Hachtel	Henry	union	life
Haley	Edward	union	life
Hand	Patrick	union	life
Hinkson	Joshua	union	life
Huntington	Philip	union	life
Kelly	Walter	union	life
Kravitsky	Stephen	union	life
Lane	William	union	life
Lugo	Jackson	union	life/medical
Mellett	Thomas	union	life
Mikucki	Richard	union	life
Miller	Henry	union	life
Morrison	Harold	nonunion	life
O’Gorman	Dennis	union	life/dental
Phillips	Chris	union	life
Polito	Giuseppe	union	life
Reichle	John	union	life/medical
Reistad	Dennis	union	life
Ring	Denis	union	life
Riordan	Andrew	union	life
Robano	Dominick	union	life

Last Name	First Name	Union/Non-Union
Roldan	Jaime	union	life
Romero	Jacob	union	life
Rossini	Dennis	union	life
Salak	John	union	life
Stinfil	Pierre	union	life
Taylor	Robert	union	life
Veiga	Robert	union	life
Wolkoff	Dmitri	nonunion	life/medical

Schedule 7.01(c)
Third Party Consents

None

Schedule I-1
Sellers’ Knowledge Persons

Mark Sudbey
Dan Hannon
David Sladic
Walter Fred McGuire
Meade Collard
Matthew Greek

Schedule I-2
Buyers’ Knowledge Persons

Jacob J. Worenklein
Jeff D. Hunter
Ian Nutt
Patrick C. Eilers
Thomas S. Souleles

Schedule I-3
Equipment Excluded From Closing Date
Working Capital Amount

1 off GSU transformer — value $1,711,108

1 off ELEM/VOLCASE?CW BFP PMP 345973 — value $250,589

1 off Blade, hydrogen, set — value $186,142

2 off gear set, load pinion, high speed — value $184,282

1 off Pump/oil/emerg bearing — value $147,425

1 off gear accessory, complete — value $102,523

EX-10.49.B

Exhibit 10.49B

TABLE OF EXHIBITS

TO SETTLEMENT AND RELEASE OF CLAIMS AGREEMENT

Exhibit A	Reliant Energy, Inc. Affiliates and Subsidiaries
Exhibit B	FERC Refund Allocation Matrix
Exhibit C	Deemed Distribution Participants
Exhibit D	Local Governmental Parties’ Allocation Matrix
Exhibit E	Individuals and Addresses for Notice
Exhibit F	Form of Notice of Election to Participate in Settlement
Exhibit G	Reliant Corporate Credit and Debt Agreements Referenced in Section 11.4.2
Exhibit H	Form of Letter Agreement for Repayment of Attorney’ Fees and Costs

EXHIBIT A
Settlement and Release of Claims Agreement

Reliant Energy, Inc.

Affiliates and Subsidiaries

Alta Norte Power Generation, L.L.C.
Arkla Finance Corporation
Astoria Generating Company, L.P.
Beaver River, LLC
Carr Street Generating Station, L.P.
Ceredo Capacity, LLC
Choctaw County Trust
Eddystone Power, LLC
Erie Blvd Hydropower, L.P.
Fork Shoals Energy, LLC
Free State Electric, LLC
Grane Creek LLC
GuideStreet, Inc.
Hunterstown Trust
Insync Internet Services, Incorporated
Liberty Electric PA, LLC
Liberty Electric Power, LLC
Liberty Member, LLC
Liberty MidAtlantic, LLC
MidAtlantic Kelson Corporation
MidAtlantic Liberty, LLC
MidWest Ash Disposal, Inc.
MidWest Beaver Corporation
MidWest Ceredo Corporation
MidWest Ceredo II Corporation
MidWest Henderson Corporation
New Texas Energy Company
OPD Group, Inc.
Orion Power Atlantic, Inc.
Orion Power Atlantic, LLC
Orion Power Capital, LLC
Orion Power Development Company, Inc.
Orion Power Holdings, Inc.
Orion Power Marketing and Supply, Inc.
Orion Power MidWest GP, Inc.
Orion Power MidWest, L.P.
Orion Power Midwest LP, Inc
Orion Power MidWest LP, LLC
Orion Power New York GP, Inc.
Orion Power New York, LP
Orion Power New York LP, LLC

A-1

Orion Power Operating Services Astoria, Inc.
Orion Power Operating Services, Inc.
Orion Power Operating Services MidAtlantic, Inc.
Orion Power Operating Services Midwest, Inc.
Orion Power New York GP II, Inc.
Orion Power New York LP, Inc.
Orion Power Operating Services Carr Street, Inc.
Orion Power Operating Services Coldwater, Inc.
Reliant Energy Arrow Canyon, LLC
Reliant Energy Asset Management, LLC
Reliant Energy Atlantic, LLC
Reliant Energy Aurora Development Corp.
Reliant Energy Aurora Holding Corp.
Reliant Energy Aurora I, LP
Reliant Energy Aurora II, LP
Reliant Energy Aurora, LP
Reliant Energy Bighorn, LLC
Reliant Energy Broadband, Inc.
Reliant Energy CapTrades Holding Corp.
Reliant Energy Capital (Europe), Inc.
Reliant Energy Channelview (Delaware), LLC
Reliant Energy Channelview (Texas), LLC
Reliant Energy Choctaw County, LLC
Reliant Energy Colusa County, LLC
Reliant Energy Communications, Inc.
Reliant Energy Communications (Delaware), LLC
Reliant Energy Communications (Texas), LLC
Reliant Energy Communications Networks, LP
Reliant Energy Construction, LLC
Reliant Energy Corporate Services, LLC
Reliant Energy Customer Care Services, LLC
Reliant Energy Deer Park, Inc.
Reliant Energy Desert Basin, LLC
Reliant Energy Development Services, Inc.
Reliant Energy Electric Solutions, LLC
Reliant Energy Erie West, LLC
Reliant Energy Europe, Inc.
Reliant Energy Europe Trading & Marketing, Inc.
Reliant Energy Florida, LLC
Reliant Energy Florida Holdings, LLC
Reliant Energy Gilbert, LLC
Reliant Energy Hope (Delaware), Inc.
Reliant Energy Hope, Inc.
Reliant Energy Hope, L.P.
Reliant Energy Hunterstown, LLC
Reliant Energy Indian River Holding Co I, LLC
Reliant Energy Indian River Holding Co II, LLC
Reliant Energy Key/Con Fuels, LLC
Reliant Energy McHenry County, L.P.
Reliant Energy McHenry Development Corp
Reliant Energy McHenry I, L.P.

A-2

Reliant Energy McHenry II, L.P.
Reliant Energy Maryland Holdings, LLC
Reliant Energy Mid-Atlantic Development, Inc.
Reliant Energy MidAtlantic Power Holdings, LLC
Reliant Energy Mid-Atlantic Power Services, Inc.
Reliant Energy Northeast Holdings, Inc.
Reliant Energy Northeast Generation, Inc.
Reliant Energy Northeast Management Company
Reliant Energy Net Ventures, Inc.
Reliant Energy New Jersey Holdings, LLC
Reliant Energy Osceola Holding Co. I, LLC
Reliant Energy Osceola Holding Co. II, LLC
Reliant Energy Osceola, LLC
Reliant Energy Portland, LLC
Reliant Energy Power Operations I, Inc.
Reliant Energy Power Operations II, Inc.
Reliant Energy Rancho Cucamonga, LLC
Reliant Energy Renewables, Inc.
Reliant Energy Renewables Baytown GP, LLC
Reliant Energy Renewables Baytown, LP
Reliant Energy Renewables Blue Bonnet GP, LLC
Reliant Energy Renewables Blue Bonnet, LP
Reliant Energy Renewables Coastal Plains GP, LLC
Reliant Energy Renewables Coastal Plains, LP
Reliant Energy Renewables Comal County GP, LLC
Reliant Energy Renewables Comal County, LP
Reliant Energy Renewables Conroe GP, LLC
Reliant Energy Renewables Conroe, LP
Reliant Energy Renewables Eastside GP, LLC
Reliant Energy Renewables Eastside, LP
Reliant Energy Renewables Hillside GP, LLC
Reliant Energy Renewables Hillside LP
Reliant Energy Renewables Holdings II, LLC
Reliant Energy Renewables Lacy Lakeview GP, LLC
Reliant Energy Renewables Lacy Lakeview, LP
Reliant Energy Renewables Pecan Prairie GP, LLC
Reliant Energy Renewables Pecan Prairie, LP
Reliant Energy Renewables Security GP, LLC
Reliant Energy Renewables Security, LP
Reliant Energy Renewables Temple GP, LLC
Reliant Energy Renewables Temple, LP
Reliant Energy Renewables Williamson County GP, LLC
Reliant Energy Renewables Williamson County, LP
Reliant Energy Retail Holdings, LLC
Reliant Energy Retail Services, LLC
Reliant Energy Retail Receivables, LLC
Reliant Energy Sabine (Delaware), Inc.
Reliant Energy Sabine (Texas), Inc.
Reliant Energy Services, Inc.
Reliant Energy Services Canada, Ltd.
Reliant Energy Services Channelview, LLC

A-3

Reliant Energy Services Desert Basin, LLC
Reliant Energy Services Mid-Stream, LLC
Reliant Energy Services Holdings, Inc.
Reliant Energy Services International, Inc.
Reliant Energy Services New Mexico, LLC
Reliant Energy Seward, LLC
Reliant Energy Shelby County II, LP
Reliant Energy Shelby County, LP
Reliant Energy Shelby Development Corp.
Reliant Energy Shelby Holding Corp.
Reliant Energy Shelby I, LP
Reliant Energy Shelby II, LP
Reliant Energy Signal Peak, LLC
Reliant Energy Solutions California, Inc.
Reliant Energy Solutions, Inc.
Reliant Energy Solutions East, LLC
Reliant Energy Solutions, LLC
Reliant Energy Sunrise, LLC
Reliant Energy Titus, LLC
Reliant Energy Trading Exchange, Inc.
Reliant Energy Ventures, Inc.
Reliant Energy Wholesale Generation, LLC
Reliant Energy Wholesale (Europe) Holdings B.V.
Reliant Energy Wholesale Service Company
Reliant Resources International Services, Inc.
Reliant Resources Merger Sub, Inc.
ReliantEnergy.com, Inc.
SewardTrust
StarEn Power, LLC
Texas Star Energy Company (fka New Texas Energy Company)
Twelvepole Creek, LLC

A-4

The remainder of Exhibit A consists of charts depicting the Reliant organizational structure during the time periods covered by the releases set forth in Article 8 of the Settlement and Release of Claims Agreement. Specifically, the organizational charts are as of July 2000, January 2001, April 2001 and May 2005. Pursuant to Rule 304 of Regulation S-T, the following represents a fair and accurate narrative description of graphic and image material omitted from the EDGAR filing.

Pages A-5 through A-7 contain the May 2005 organizational chart showing Reliant Energy, Inc., a Delaware corporation (“REI”), as the parent company with the following entities depicted as its wholly- owned subsidiaries:

-Reliant Energy Corporate Services, LLC, a Delaware limited liability company
- -Reliant Energy Communications, Inc., a Delaware corporation
- -Insync Internet Services, Incorporated, a Texas corporation ⁽¹⁾
- -Reliant Energy Ventures, Inc., a Delaware corporation
- -Reliant Energy Broadband, Inc., a Delaware corporation
- -Reliant Energy Net Ventures, Inc., a Delaware corporation
- -Reliant Energy Retail Holdings, LLC, a Delaware limited liability company
- -Reliant Energy Electric Solutions, LLC, a Delaware limited liability company
- -Reliant Energy Services, Inc., a Delaware corporation
- -Reliant Energy Services International, Inc., a Delaware corporation⁽¹⁾
- -Reliant Resources International Services, Inc., a Delaware corporation⁽¹⁾
- -Reliant Energy Wholesale Service Company, a Delaware corporation⁽¹⁾
- -Reliant Energy Power Generation, Inc., a Delaware corporation
- -Reliant Energy Trading Exchange, Inc., a Delaware corporation
- -Orion Power Holdings, Inc., a Delaware corporation

-Reliant Energy CapTrades Holding Corp., a Delaware corporation, is depicted as a wholly-owned subsidiary of Reliant Energy Net Ventures, Inc. and CapTrades GP, LLC, a Delaware limited liability company, is depicted as 60% owned by Reliant Energy Net Ventures, Inc.

-CapTrades, LP, a Delaware limited partnership, is 59.4% owned by Reliant Energy CapTrades Holding Corp. and 1% owned by CapTrades GP, Inc.

The following are depicted as wholly-owned subsidiaries of Reliant Energy Retail Holdings, Inc.:

-Reliant Energy Retail Services, LLC, a Delaware limited liability company
- -Reliant Energy Renewables, Inc., a Delaware corporation
- -Reliant Energy Solutions, LLC, a Delaware limited liability company, and its wholly-owned subsidiary, Reliant Energy Solutions California, Inc, a Delaware corporation¹
- -StarEn Power, LLC, a Delaware limited liability company⁽¹⁾
- -Texas Star Energy Company, a Delaware corporation⁽¹⁾
- -Reliant Energy Customer Care Services, LLC, a Delaware limited liability company⁽¹⁾
- -Reliant Energy Solutions Holdings, LLC, a Delaware limited liability company, and its wholly-owned subsidiary, Reliant Energy Solutions West, LLC, a Delaware limited liability company⁽¹⁾

The following are depicted as wholly-owned subsidiaries of Reliant Energy Retail Services, LLC:

-RE Retail Receivables, LLC, a Delaware limited liability company
- -Reliant Energy Solutions East, LLC, a Delaware limited liability company

The following are depicted as wholly-owned subsidiaries of Reliant Energy Renewables, Inc.:

-Reliant Energy Renewables Holdings, II, LLC, a Delaware limited liability company
- -Reliant Energy Texas Renewables, GP, LLC, a Delaware limited company

-Reliant Energy Texas Renewables, LP, a Delaware limited partnership, is 99% owned by Reliant Energy Renewables Holdings II, LLC and 1% owned by Reliant Energy Texas Renewables GP, LLC

The following are depicted as wholly-owned subsidiaries of Reliant Energy Services, Inc.:

-Reliant Energy Services Channelview, LLC, a Delaware limited liability company
- -Reliant Energy Services Desert Basin, LLC, a Delaware limited liability company
- -Reliant Energy Services Mid-Stream, LLC, a Delaware limited liability company
- -Reliant Energy Services New Mexico, LLC, a Delaware limited liability company⁽¹⁾

-Reliant Energy Services Canada, Ltd., a Canadian corporation, is depicted as a wholly-owned subsidiary of Reliant Energy Services International, Inc.

The following are depicted as subsidiaries of Reliant Energy Trading Exchange, Inc.:

-Energy Trading Platform Holding Company, Inc., a Delaware corporation (16%)
- -Energy Trading Platform Holding Company, Inc., a Delaware corporation (5.33%)

The following are depicted as wholly-owned subsidiaries of Reliant Energy Power Generation, Inc.:

-Reliant Energy Sabine (Delaware), Inc., a Delaware corporation
- -Reliant Energy Sabine (Texas), Inc., a Delaware corporation
- -Reliant Energy Channelview (Delaware), LLC, a Delaware limited liability company
- -Reliant Energy Channelview (Texas) LLC, a Delaware limited liability company
- -Reliant Energy Deer Park, Inc., a Delaware corporation⁽¹⁾
- -Reeves County Land Associates, LLC, a Delaware limited liability company⁽¹⁾
- -Reliant Energy Northeast Holdings, Inc., a Delaware corporation
- -Reliant Energy Mid-Atlantic Development, Inc., a Delaware corporation, and its wholly-owned subsidiary, Reliant Energy Hunterstown, LLC, a Delaware limited liability company⁽¹⁾
- -Reliant Energy Shelby Holding Corp., a Delaware corporation, and its wholly-owned subsidiary Reliant Energy Shelby Development Corp., a Delaware corporation⁽¹⁾
- -Reliant Energy Aurora Holding, LLC, a Delaware limited liability company⁽¹⁾
- -Reliant Energy Choctaw County, LLC, a Mississippi limited liability company⁽¹⁾
- -Reliant Energy Florida Holdings, LLC, a Delaware limited liability company
- -Reliant Energy California Holdings, LLC, a Delaware limited liability company
- -El Dorado Energy, LLC (EWG), a Delaware limited liability company
- -Reliant Energy Arrow Canyon, LLC, a Delaware limited liability company⁽¹⁾
- -Reliant Energy Bighorn, LLC, a Delaware limited liability company⁽¹⁾
- -Reliant Energy Desert Basin, LLC, a Delaware limited liability company⁽¹⁾
- -Reliant Energy Equipment Company, LLC, a Delaware limited liability company⁽¹⁾
- -Reliant Energy Signal Peak, LLC, a Delaware limited liability company⁽¹⁾
- -Reliant Energy Power Operations I, Inc., a Delaware corporation⁽¹⁾
- -Reliant Energy Power Operations II, Inc., a Delaware corporation⁽¹⁾
- -Reliant Energy Development Services, Inc., a Delaware corporation⁽¹⁾
- -Reliant Energy Construction, LLC, a Delaware limited liability corporation⁽¹⁾
- -Reliant Energy Asset Management, LLC, a Delaware limited liability company
- -Reliant Energy Wholesale Generation, LLC, a Delaware limited liability company
- -Reliant Energy Capital (Europe), Inc., a Delaware corporation⁽¹⁾

-Sabine Cogen, LP, a Delaware limited partnership, is depicted as 49% owned by Reliant Energy Sabine (Delaware), Inc. and 1% owned by Reliant Energy Sabine (Texas), Inc.

-Reliant Energy Channelview LP, a Delaware limited partnership, is depicted as 99% owned by Reliant Energy Channelview (Delaware), LLC and 1% owned by Reliant Energy Channelview (Texas) LLC

-Reliant Energy Northeast Generation, Inc., a Delaware corporation, is depicted as a wholly-

owned subsidiary of Reliant Energy Northeast Holdings, Inc.

-Reliant Energy Key/Con Fuels, LLC, a Delaware limited liability company, and Reliant Energy Mid-Atlantic Power Holdings, LLC, a Delaware limited liability company, are depicted as wholly-owned subsidiaries of Reliant Energy Northeast Generation, Inc.

-Conemaugh Fuels, LLC, a Delaware limited liability company, and Keystone Fuels, LLC, a Delaware limited liability company, are depicted as 16.67% owned by Reliant Energy Key/Con Fuels, LLC

-Reliant Energy Maryland Holdings, LLC, a Delaware limited liability company, Reliant Energy Mid-Atlantic Power Services, Inc., a Delaware corporation, Reliant Energy New Jersey Holdings, LLC, a Delaware limited liability company and Reliant Energy Northeast Management Company, a Pennsylvania corporation, are depicted as wholly-owned subsidiaries of Reliant Energy Mid-Atlantic Power Holdings, LLC

-Reliant Energy Shelby Development Corp., a Delaware corporation, is depicted as a wholly-owned subsidiary of Reliant Energy Shelby Holding Corp., a Delaware corporation⁽¹⁾

-Reliant Energy Shelby I, LP, a Delaware limited partnership, and Reliant Energy Shelby II, LP, a Delaware limited partnership, are depicted as 99% owned by Reliant Energy Shelby Development Corp. and 1% owned by Reliant Energy Shelby Holding Corp. ⁽¹⁾

-Reliant Energy Shelby County, LP, a Delaware limited partnership, and Reliant Energy Shelby County II, LP, a Delaware limited partnership, are depicted as 99% owned by Reliant Energy Shelby II, LP and 1% owned by Reliant Energy Shelby I, LP⁽¹⁾

-Reliant Energy Aurora Development, LLC, a Delaware limited liability company, is depicted as a wholly-owned subsidiary of Reliant Energy Aurora Holdings, LLC⁽¹⁾

-Reliant Energy Aurora I, LP, a Delaware limited partnership, and Reliant Energy Aurora II, LP, a Delaware limited partnership, are depicted as 99% owned by Reliant Energy Aurora Holdings, LLC and 1% owned by Reliant Energy Aurora Development, LLC⁽¹⁾

-Reliant Energy Aurora, LP, a Delaware limited partnership, is depicted as 99% owned by Reliant Energy Aurora II, LP and 1% owned by Reliant Energy Aurora I, LP⁽¹⁾

The following are depicted as wholly-owned subsidiaries of Reliant Energy Florida Holdings, LLC

-Reliant Energy Florida, LLC, a Delaware limited liability company
- -Reliant Energy New Smyrna Beach, LLC, a Delaware limited liability company⁽¹⁾
- -Reliant Energy Osceola, LLC, a Delaware limited liability company⁽¹⁾
- -Reliant Energy Winter Haven, LLC, a Delaware limited liability company⁽¹⁾

The following are depicted as wholly-owned subsidiaries of Reliant Energy California Holdings, LLC

-Reliant Energy Coolwater, Inc., a Delaware corporation
- -Reliant Energy Ellwood, Inc., a Delaware corporation
- -Reliant Energy Etiwanda, Inc., a Delaware corporation
- -Reliant Energy Mandalay, Inc., a Delaware corporation
- -Reliant Energy Ormond Beach, Inc., a Delaware corporation

-Reliant Energy Seward, LLC, a Delaware limited liability company, is depicted as a wholly-owned subsidiary of Reliant Energy Wholesale Generation, LLC

-Reliant Energy Europe, Inc., a Delaware corporation, is depicted as a wholly-owned subsidiary of

Reliant Energy Capital (Europe), Inc. ⁽¹⁾

-Reliant Energy Wholesale (Europe) Holdings B.V., a Netherland limited liability company, is depicted as a wholly-owned subsidiary of Reliant Energy Europe, Inc.

The following are depicted as wholly-owned subsidiaries of Orion Power Holdings, Inc.:

-Orion Power Capital, LLC, a Delaware limited liability company
- -Orion Power New York GP II, Inc., a Delaware corporation⁽¹⁾
- -Orion Power Marketing and Supply, Inc., a Delaware corporation
- -Orion Power Operating Services, Inc., a Delaware corporation
- -Orion Power Development Company, Inc., a Delaware corporation

The following are depicted as wholly-owned subsidiaries of Orion Power Capital, LLC:

-Orion Power Midwest LP, LLC, a Delaware limited liability company
- -Orion Power Midwest GP, Inc., a Delaware corporation
- -Orion Power New York LP, LLC, a Delaware limited liability company
- -Orion Power New York, GP, Inc., a Delaware corporation

-Orion Power Midwest, L.P., a Delaware limited company, is depicted as 99% owned by Orion Power Midwest, L.P., LLC and 1% owned by Orion Power Midwest GP, Inc. and Twelvepole Creek, LLC, a Delaware limited liability company, is depicted as a wholly-owned subsidiary of Orion Power Midwest, L.P.

-Orion Power New York, L.P., a Delaware limited partnership, is depicted as 99.8% owned by Orion Power New York LP, LLC and .2% owned by Orion Power New York, GP, Inc.

-Astoria Generating Company, L.P., a Delaware limited partnership, is depicted as 99% owned by Orion Power New York LP, LLC and 1% owned by Orion Power New York GP, Inc.

-Erie Boulevard Hydropower, L.P., a Delaware limited partnership,⁽¹⁾ and Carr Street Generating Station, LP, a Delaware limited partnership,⁽¹⁾ are depicted as 99% owned by Orion Power New York LP, LLC and 1% owned by Orion Power New York GP, Inc.

The following are depicted as wholly-owned subsidiaries of Orion Power Operating Services, Inc.:

-Orion Power Operating Services Midwest, Inc., a Delaware corporation
- -Orion Power Operating Services Astoria, Inc., a Delaware corporation
- -Orion Power Operating Services Coldwater, Inc., a Delaware corporation⁽¹⁾
- -Orion Power Operating Services Carr Street, Inc., a Delaware corporation⁽¹⁾
- -Midwest Ash Disposal, Inc., a Delaware corporation
- -OPOS MidAtlantic, Inc., a Delaware corporation

The following are depicted as wholly-owned subsidiaries of Orion Power Development Company, Inc.:

-OPD Group, Inc., a Delaware corporation
- -Orion Power Atlantic, Inc., a Delaware corporation
- -Liberty Member, LLC, a Delaware limited liability company
- -MidAtlantic Liberty, LLC, a Delaware limited liability company
- -Liberty MidAtlantic, LLC, a Delaware limited liability company
- -Eddystone Power, LLC, a Delaware limited liability company

The following are depicted as wholly-owned subsidiaries of OPD Group, Inc.:

-Beaver River, LLC, a Delaware limited liability company
- -Grane Creek, LLC, a Delaware limited liability company
- -Free State Electric, LLC, a Delaware limited liability company

-Orion Power Atlantic LLC, a Florida limited liability company, is depicted as a wholly-owned subsidiary of Orion Power Atlantic, Inc. and Orion Power Atlantic, Ltd., a Florida limited partnership, is depicted as 99.99% owned by Orion Power Atlantic Inc. and .01% owned by Orion Power Atlantic, Ltd.

-Liberty Electric PA, LLC, a Delaware limited liability company,⁽¹⁾ is depicted as 49% owned by Liberty Member, LLC, 49% owned by Liberty MidAtlantic, LLC, 1% owned by MidAtlantic Liberty, LLC and 1% owned by Eddystone Power, LLC. Liberty Electric Power, LLC, a Delaware limited liability company,⁽¹⁾ is depicted as a wholly-owned subsidiary of Liberty Electric PA, LLC.

(1) These subsidiaries are crossed-out on the organizational chart.

Pages A-8 contains the July 2000 organizational chart showing Reliant Energy, Incorporated, a Texas corporation, as the parent company with the following entities depicted as its wholly- owned subsidiaries:

-Reliant Energy Solutions, Inc., a Delaware corporation
- -Reliant Energy Thermal Systems, Inc., a Delaware corporation
- -ReliantEnergy.com, Inc., a Delaware corporation
- -Reliant Energy Resources Corp., a Delaware corporation
- -Reliant Energy International, Inc., a Delaware corporation
- -Reliant Energy Wholesale Service Company, a Delaware corporation
- -Reliant Energy Power Generation, Inc., a Delaware corporation
- -Reliant Energy Trading Exchange, Inc., a Delaware corporation
- -Houston Industries FinanceCo GP, LLC, a Delaware limited liability company
- -Reliant Energy FinanceCo II GP, LLC, a Delaware limited liability company
- -Reliant Energy FinanceCo III GP, LLC, a Delaware limited liability company
- -Reliant Energy FinanceCo IV GP, LLC, a Delaware limited liability company
- -Houston Industries Funding Company, a Delaware company
- -GuideStreet Inc., a Delaware corporation
- -HL&P Capital Trust, a Delaware business trust
- -HL&P Capital Trust II, a Delaware business trust
- -REI Trust I, a Delaware business trust
- -REI Trust II, a Delaware business trust
- -HL&P Receivables, Inc., a Delaware corporation
- -Reliant Energy Transition Bond Company LLC, a Delaware limited liability company
- -Reliant Energy Investment Management, Inc., a Delaware corporation
- -Reliant Energy Communications, Inc., a Delaware corporation
- -Reliant Energy Power Systems, Inc., a Delaware corporation
- -Reliant Energy Properties, Inc., a Delaware corporation
- -Reliant Energy Products, Inc., a Delaware corporation
- -Reliant Energy Ventures, Inc., a Delaware corporation
- -Reliant Energy Water, Inc., a Delaware corporation
- -Houston Lighting & Power Company*, an inactive Texas name saver corporation
- -NorAm Energy Corp.*, an inactive Delaware name saver corporation
- -Houston Industries Incorporated*, an inactive Texas name saver corporation
- -Utility Rail Services, Inc.*, a Delaware corporation
- -Houston Industries Energy (UK), Inc.*, a Delaware corporation

-Northwind Houston LLC, a Delaware limited liability company, is depicted as 75% owned by Reliant Energy Thermal Systems, Inc.

-Reliant Energy Thermal Systems (Delaware), Inc., a Delaware corporation, is depicted as a wholly-owned subsidiary of Reliant Energy Thermal Systems, Inc.

-Northwind Houston LP, a Delaware limited partnership, is depicted as 74.61% owned by Reliant Energy Thermal Systems (Delaware), Inc.

The following are depicted as wholly-owned subsidiaries of Reliant Energy Resources Corp.:

-Reliant Energy Retail, Inc., a Delaware corporation
- -Reliant Energy Consumer Group, Inc., a Delaware corporation
- -Entex Gas Marketing Company, a Texas company
- -Industrial Gas Supply Corporation, a Texas corporation
- -Louisiana Unit Gas Transmission Company, a Texas company
- -Unit Gas Transmission Company, a Texas company

-ALG Gas Supply Company, a Delaware corporation
- -Allied Materials Corporation, a Texas corporation
- -Entex Fuels, Inc., a Texas corporation
- -Entex NGV, Inc., a Delaware corporation
- -Minnesota Intrastate Pipeline Company, a Delaware corporation
- -Arkansas Louisiana Finance Corporation, a Delaware corporation
- -Arkla Finance Corporation, a Delaware corporation
- -National Furnace Company, a Texas company
- -NorAm Financing I, a Delaware business trust
- -Arkla Industries Inc., a Delaware corporation*
- -NorAm Utility Services, Inc., a Delaware corporation
- -Arkla Products Company, a Delaware corporation*
- -Intex, Inc., a Texas corporation*
- -Entex Gas Resources Corp., a Texas corporation
- -Entex Oil & Gas Co., a Texas company*
- -United Gas, Inc., a Texas name saver corporation*
- -Reliant Energy Gas Transmission Company, a Delaware corporation
- -NorAm Funds Management, Inc., a Delaware corporation
- -Mississippi River Transmission Corporation, a Delaware corporation
- -Illinois Gas Transmission Company, a Delaware company
- -Reliant Energy Intrastate Holdings, LLC, a Delaware limited liability company
- -Reliant Energy Pipeline Services, Inc., a Delaware corporation
- -Reliant Energy Trading and Transportation Group, Inc., a Texas corporation
- -Reliant Energy Field Services, Inc., a Delaware corporation
- -Blue Jay Gas Company, a Delaware corporation*
- -Reliant Energy Services, Inc., a Delaware corporation
- -Reliant Energy Services International, Inc., a Delaware corporation
- -Reliant Energy Europe Trading & Marketing, Inc., a Delaware corporation
- -Reliant Energy Hub Services, Inc., a Delaware corporation*

-NorAm Funds Management. Inc., a Delaware corporation, is depicted as 75% owned by Reliant Energy Gas Transmission Company

-MRT Services Company, a Delaware company, is depicted as a wholly-owned subsidiary of Mississippi River Transmission Corporation

-Pine Pipeline Acquisition Company, a Delaware limited liability company, is depicted as 81.4% owned by Reliant Energy Intrastate Holdings, LLC

-Reliant Energy OQ, LLC, a Delaware limited liability company, is depicted as a wholly-owned subsidiary of Reliant Energy Pipeline Services, Inc.

-Reliant Energy Gas Processing, Inc., a Delaware corporation, is depicted as a wholly-owned subsidiary of Reliant Energy Field Services, Inc.

The following are depicted as wholly-owned subsidiaries of Reliant Energy Services, Inc.:

-Reliant Energy Services Channelview, LLC, a Delaware limited liability company
- -Reliant Energy Services Desert Basin, LLC, a Delaware limited liability company
- -Reliant Energy Services Mid-Stream, LLC, a Delaware limited liability company
- -Reliant Energy Services New Mexico, LLC, a Delaware limited liability company
- -MRT Energy Marketing Company, a Delaware company

-Reliant Energy Services Canada, Ltd., a Canadian corporation, is depicted as a wholly-owned

subsidiary of Reliant Energy Services International, Inc.

-Reliant Energy Trading & Marketing, B.V., a Netherland limited liability company, is depicted as a wholly-owned subsidiary of Reliant Energy Europe Trading & Marketing, Inc.

-Reliant Energy Trading & Marketing GmbH, a German corporation, is depicted as a wholly-owned subsidiary of Reliant Energy Trading & Marketing, B.V. *

-Energy Platform Trading Holding Company, Inc., a Delaware corporation, is depicted as 16% owned by Reliant Energy Trading Exchange, Inc.

-Reliant Energy FinanceCo III LP, a Delaware limited partnership, is depicted as 99% owned by REI and 1% owned by Reliant Energy FinanceCo III GP, LLC

-Reliant Energy FinanceCo IV LP, a Delaware limited partnership, is depicted as 99% owned by REI and 1% owned by Reliant Energy FinanceCo IV GP, LLC

-Insync Internet Services, Incorporated, a Texas corporation, Reliant Energy Communications, (Delaware), LLC, a Delaware limited liability company and Reliant Energy Communications, (Texas), LLC, a Delaware limited liability company, are depicted as wholly-owned subsidiaries of Reliant Energy Communications, Inc.

-Reliant Energy Communications Networks, LP, a Delaware limited partnership, is depicted as 99% owned Reliant Energy Communications, (Delaware), LLC and 1% owned by Reliant Energy Communications, (Texas), LLC

-UFI Services, Inc., a Delaware corporation, is depicted as a wholly-owned subsidiary of Utility Rail Services, Inc.*

Reliant Energy Foundation, a Texas non-profit corporation, STP Nuclear Operating Company, a Texas non-profit corporation, and AMT Land, Inc., a Delaware corporation, are reflected on the organizational chart under the heading “Other”.

* Inactive

Pages A-9 contains the July 2000 organizational chart showing Reliant Energy, Incorporated, a Texas corporation, as the parent company of Reliant Energy International, Inc., with the following entities depicted as wholly- owned subsidiaries of Reliant Energy International, Inc.:

-Reliant Energy Argentine Holdings Ltd, a Cayman Islands entity
- -Reliant Energy Light, Inc., a Delaware corporation ⁽²⁾
- -Reliant Energy Brazil Ventures Ltd., a Cayman Islands entity*
- -Reliant Energy Colombia Ltd., a Cayman Islands entity
- -Reliant Energy Caribe Ltd., a Cayman Islands entity
- -Reliant Energy Salvador Holding Company Ltd., a Cayman Islands entity
- -Reliant Energy Holdings Ltd., a Cayman Islands entity*
- -Reliant Energy Outsource Ltd., a Cayman Islands entity*
- -Worldwide Electric Holdings B.V., a Netherlands entity*
- -HI Energy Holdings I B.V., a Netherlands entity*
- -Reliant Energy International II, Inc., a Delaware corporation⁽²⁾
- -Reliant Energy International Services, Inc., a Delaware corporation
- -Reliant Energy Brazil Tiete Ltd., a Cayman Islands entity
- -Reliant Energy Brazil Ltd., a Cayman Islands entity*
- -Reliant Energy International Holdings, LLC, a Delaware limited liability company

The following are depicted as being 99% owned by Reliant Energy International, Inc.:

-Reliant Energy Argentina, S.A. (EWG), an Argentine entity⁽¹⁾
- -Reliant Energy Santiago del Estero, S.A., an Argentine entity⁽¹⁾
- -Reliant Energy Brasil, Ltda., a Brazilian entity⁽¹⁾

-Reliant Energy Columbia Ltda., a Columbian entity (1% owned by Reliant Energy International Holdings, LLC

-Reliant Energy Argener S.A., an Argentine entity (EWG), is depicted as 51% owned by Reliant Energy Argener S.A.and 49% owned by Reliant Energy Argentine Holdings Ltd.

-Reliant Energy Opco S.A., an Argentine entity (EWG), is depicted as 99% owned by Reliant Energy Argentina S.A. ⁽¹⁾

-Empresa Distribudora de Electricidad de Santiago del Estero S.A., an Argentine entity (FUCO), is depicted as 90% owned by Reliant Energy Santiago del Estero, S.A.

-Reliant Energy Cayman Holdings, Ltd., a Cayman Islands entity, and Reliant Energy Cayman Investments Ltd., a Cayman Islands entity, are depicted as wholly-owned subsidiaries of Reliant Energy Light, Inc.

-Reliant Energy Cayman Acquisitions Ltd., a Cayman Islands entity, is depicted as 99% owned by Reliant Energy Cayman Holdings Ltd. and 1% owned by Reliant Energy Cayman Investments Ltd.

-Reliant Energy Cayman Ltd., a Cayman Islands entity, ⁽²⁾ is depicted as 99% owned by Reliant Energy Cayman Holdings Ltd., and 1% owned by Reliant Energy Cayman Investments Ltd.

-Light-Seviços de Electricidad S.A., a Brazilian entity (FUCO) ⁽²⁾, is depicted as 11% owned by Reliant Energy Cayman Ltd., and 1% owned by Reliant Energy Cayman Acquisitions Ltd.

-Light Gás Ltda., a Brazilian entity, ⁽²⁾ is depicted as 99% owned by Light-Seviços de Electricidad S.A

-Eletropaulo-Metropolitana Electricidade de São Paulo, S.A., a Brazilian

entity, ⁽²⁾ is depicted as 31% owned by Light Gás Ltda.

-Reliant Energy International Brasil Ltda., a Brazilian entity,* is depicted as 99% owned by Reliant Energy Brazil Ltd. ⁽¹⁾

-HIE Brasil Rio Sul Ltda., a Brazilian entity,* is depicted as 20% owned by Reliant Energy International Brasil Ltda. and 80% owned by Light-Seviços de Electricidad S.A.

-Light Overseas Investments Limited, a Brazilian entity, and Light Sinergia Ltda., a Brazilian entity, are depicted as wholly-owned subsidiaries of HIE Brasil Rio Sul Ltda.

-Light Telecom Ltda., a Brazilian entity, and Light Energy S.A., a Brazilian entity, are depicted as 99% owned by HIE Brasil Rio Sul Ltda.

-Lir Energy Limited, a Cayman Islands entity, is depicted as 80% owned by HIE Brasil Rio Sul Ltda.

-Valle Energy Ventures, Inc., a Cayman Islands entity,⁽²⁾ is depicted as 50% owned by Reliant Energy Colombia Ltd.

-Empresa de Energía del Pacífico S.A. E.S.P. {EPSA}, a Columbian entity, is depicted as 44.7% owned by Valle Energy Ventures, Inc., and 6% owned by Reliant Energy Columbia Ltd.

-Central Hidroelectrica del Rio Anchicayá S.A. E.S.P., a Columbian entity (FUCO), is depicted as 99% owned by Empresa de Energía del Pacífico S.A. E.S.P.

-Compañia de Electricidad de Tuluá S.A. E.S.P., a Columbian entity (FUCO), is depicted as 86% owned by Empresa de Energía del Pacífico S.A. E.S.P.

-Gases de Occidente S.A. E.S.P., a Columbian entity (FUCO), is depicted as 7% owned by Empresa de Energía del Pacífico S.A. E.S.P.

-Interfconexión Electrica S.A., a Columbian entity (FUCO), is depicted as 5% owned by Empresa de Energía del Pacífico S.A. E.S.P.

-Sociedad Promotora de la Termoelectrica para el Suroccidente Columbian S.A., a Columbian entity, is depicted as 17% owned by Empresa de Energía del Pacífico S.A. E.S.P.

-HIEDC Holdings Ltd., a Cayman Islands entity, is depicted as 50% owned by Reliant Energy Caribe Ltd.

-Caribe Energy Holdings Ltd., a Cayman Islands entity, is depicted as a wholly-owned subsidiary of HIEDC Holdings Ltd.

-Electrificadora de la Costa Atlántica S.A. E.S.P., a Columbian entity (FUCO), is depicted as 70% owned by Caribe Energy Holdings Ltd.

-Electrificadora del Caribe S.A. E.S.P., a Columbian entity (FUCO), is depicted as 69% owned by Caribe Energy Holdings Ltd.

-El Salvador Energy Holdings, a Cayman Islands entity, is depicted as 50% owned by Reliant Energy

Salvador Holding Company Ltd.

-Empresa Eléctrica de Oriente S.A. de C.V., an El Salvadorian entity (FUCO), is depicted as 89% owned by El Salvador Energy Holdings

-Compañia de Alumbrado Eléctrico de San Salvador, S.A. de C.V., a El Salvadorian entity, is depicted as 75% owned by El Salvador Energy Holdings

-Distribuidora Eléctricade Usulután S. de E.M., an El Salvadorian entity (FUCO), is depicted as 98% owned by Compañia de Alumbrado Eléctrico de San Salvador, S.A. de C.V.

-Empresa Salvadoreña de Energia S.A. de C.V., an El Salvadorian public limited company and limited partnership, is depicted as 25% owned by Empresa Eléctrica de Oriente S.A. de C.V. and 25% owned by Compañia de Alumbrado Eléctrico de San Salvador, S.A. de C.V.

-Reliant Energy El Salvador, S.A. de C.V., an El Salvadorian entity, is depicted as 99% owned by Reliant Energy International Holdings, LLC, a Delaware limited liability company and 1% owned by REII

-Venus Generation El Salvador, a Cayman Islands entity, is depicted as 50% owned by Reliant Energy Outsource Ltd.

-Reliant Energy India, Inc., a MAU entity, HIE Ford Heights, Inc., a Delaware corporation, and HIE Fulton, Inc., a Delaware corporation, are depicted as wholly-owned subsidiaries of Reliant Energy International II, Inc.

-Reliant Energy Rain, Inc., a MAU entity, is depicted as a wholly-owned subsidiary of Reliant Energy India, Inc.

-Rain Calcining Limited (FUCO), an Indian entity, is depicted as 25% owned by Reliant Energy Rain, Inc.

(1)	Law requires at least two shareholders of record; Reliant Energy International exercises beneficial ownership of all shares.
(2)	This stock has been pledged to secure financing
*	Inactive
EWG:	Exempt Wholesale Generator under Energy Policy Act of 1992
FUCO:	Foreign Utility Company under Energy Policy Act of 1992

Page A-10 contains the July 2000 organizational chart showing Reliant Energy, Incorporated, a Texas corporation, as the parent company to Reliant Energy Power Generation, Inc. (“REPG”), a Delaware corporation and the following entities as wholly-owned by REPG:

-Reliant Energy Sabine (Delaware), Inc., a Delaware corporation
- -Reliant Energy Sabine (Texas), Inc., a Delaware corporation
- -Reliant Energy Deer Park, Inc., a Delaware corporation
- -Reliant Energy Channelview (Delaware) LLC, a Delaware limited liability company
- -Reliant Energy Channelview (Texas), LLC, a Delaware limited liability company
- -Reliant Energy Renewables, Inc., a Delaware corporation
- -Reliant Energy Northeast Holdings, Inc., a Delaware corporation
- -Reliant Energy Mid-Atlantic Development, Inc., a Delaware corporation
- -Reliant Energy McHenry Holding Corp., a Delaware corporation
- -Reliant Energy Shelby Holding Corp., a Delaware corporation
- -Reliant Energy Aurora Holding Corp., a Delaware corporation
- -Reliant Energy Florida Holdings, LLC, a Delaware limited liability company
- -Reliant Energy California Holdings, LLC, a Delaware limited liability company
- -El Dorado Energy, LLC (EWG), a Delaware limited liability company
- -Reliant Energy Desert Basin, LLC (EWG), a Delaware limited liability company
- -Reliant Energy Power Operations I, Inc., a Delaware corporation
- -Reliant Energy Power Operations II, Inc., a Delaware corporation
- -Reliant Energy Development Services, Inc., a Delaware corporation
- -Reliant Energy Capital (Europe), Inc., a Delaware corporation

and

-Sabine Cogen, LP (QF), a Delaware limited partnership, is depicted as 49% owned by Reliant Energy Sabine (Delaware), Inc. and 51% owned by Reliant Energy Sabine (Texas), Inc.

-Reliant Energy Channelview LP, a Delaware limited partnership, is depicted as 99% owned by Reliant Energy Channelview (Delaware) LLC and 1% owned by Reliant Energy Channelview (Texas) LLC

The following are depicted as wholly-owned subsidiaries of Reliant Energy Renewables, Inc.:

-Reliant Energy Renewables Holdings, LLC, a Delaware limited liability company
- -Reliant Energy Renewables Atascocita GP, LLC, a Delaware limited liability company
- -Reliant Energy Renewables Bluebonnet GP, LLC, a limited liability company
- -Reliant Energy Renewables Coastal Plains GP, LLC, a Delaware limited liability company
- -Reliant Energy Renewables Comal County GP, LLC, a Delaware limited liability company
- -Reliant Energy Renewables Conroe, GP, LLC, a Delaware limited liability company
- -Reliant Energy Renewables Eastside GP, LLC, a Delaware limited liability company
- -Reliant Energy Renewables Hillside GP, LLC, a limited liability company
- -Reliant Energy Renewables Lacy Lakeview GP, LLC, a Delaware limited liability company
- -Reliant Energy Renewables Pecan Praire GP, LLC, a Delaware corporation
- -Reliant Energy Renewables Security, GP, LLC, a Delaware limited liability company
- -Reliant Energy Renewables Temple GP, LLC, a Delaware limited liability company
- -Reliant Energy Renewables Wilkinson County GP, LLC, a Delaware limited liability company

and

-Reliant Energy Renewables Atascocita, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Renewables Holdings, LLC, and 1% owned by Reliant Energy Renewables Atascocita GP, LLC

-Reliant Energy Renewables Bluebonnet, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Renewables Holdings, LLC and 1% owned by Reliant Energy Renewables Bluebonnet GP, LLC

-Reliant Energy Renewables Coastal Plains, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Renewable Holdings, LLC and 1% owned by Reliant Energy Coastal Plains GP, LLC

-Reliant Energy Renewables Comal County, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Renewables Holdings, LLC and 1% owned by Reliant Energy Renewables Comal County GP, LLC

-Reliant Energy Renewables Conroe, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Renewables Holdings, LLC and 1% owned by Reliant Energy Conroe, GP, LLC

-Reliant Energy Renewables Eastside, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Renewables Holdings, LLC and 1% owned by Reliant Energy Eastside GP, LLC

-Reliant Energy Renewables Hillside, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Renewables Holdings, LLC and 1% owned by Reliant Energy Renewables Eastside GP, LLC

-Reliant Energy Renewables Lacy Lakeview, LP, a limited partnership, is depicted as being 99% owned by Reliant Energy Renewable Holdings, LLC and 1% owned by Reliant Energy Renewables Lacy Lakeview GP, LLC

-Reliant Energy Renewables Pecan Praire, LP, a limited partnership, is depicted as being 99% owned by Reliant Energy Renewable Holdings, LLC and 1% owned by Reliant Energy Renewables Pecan Praire GP, LLC

-Reliant Energy Renewables Security, LP, a limited partnership, is depicted as being 99% owned by Reliant Energy Renewable Holdings, LLC and 1% owned by Reliant Energy Renewables Security GP, LLC

-Reliant Energy Renewables Temple, LP, a limited partnership, is depicted as being 99% owned by Reliant Energy Renewable Holdings, LLC and 1% owned by Reliant Energy Renewables Temple GP, LLC

-Reliant Energy Renewables Williamson County, LP, a limited partnership, is depicted as being 99% owned by Reliant Energy Renewable Holdings, LLC and 1% owned by Reliant Energy Renewables Williamson County GP, LLC

-Reliant Energy Northeast Generation, Inc., a Delaware corporation, is depicted as being a wholly-owned subsidiary of Reliant Energy Northeast Holdings, Inc.

-Reliant Energy Maryland Holdings, LLC (EWG), a Delaware limited liability company, Reliant Energy Mid-Atlantic Power Holdings, LLC (EWG), a Delaware limited liability company, Reliant Energy Mid-Atlantic Power Services, Inc., a Delaware corporation, and Reliant Energy New Jersey Holdings, LLC (EWG), are depicted as being wholly-owned subsidiaries of Reliant Energy Northeast Generation, Inc.

-Reliant Energy Northeast Management Company, a Pennsylvania company, is depicted as being wholly-owned by Reliant Energy Mid-Atlantic Power Holdings, LLC

-Reliant Energy McHenry I, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy McHenry Holdings Corp. and 1% owned by Reliant Energy McHenry Development Corp.

-Reliant Energy McHenry II, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy McHenry Holding Corp. and 1% owned by Reliant Energy McHenry Development Corp.

-Reliant Energy McHenry County, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy McHenry II and 1% owned by Reliant Energy McHenry I, LP

-Reliant Energy Shelby I, LP, a Delaware limited partnership, is 99% owned by Reliant Energy Shelby Holding Corp. and 1% owned by Reliant Energy Shelby Development Corp.

-Reliant Energy Shelby II, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Shelby Holding Corp. and 1% owned by Reliant Energy Shelby Development Corp.

-Reliant Energy Shelby County, LP (EWG), a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Shelby II, LP and 1% owned by Reliant Energy Shelby I, LP

-Reliant Energy Shelby County II, LP, is depicted as being 99% owned by Reliant Energy Shelby II, LP and 1% owned by Reliant Energy Shelby I, LP

-Reliant Energy Aurora I, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Aurora Holding Corp. and 1% owned by Reliant Energy Aurora Development Corp.

-Reliant Energy Aurora II, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Aurora Holding Corp. and 1% owned by Reliant Energy Aurora Development Corp.

-Reliant Energy Aurora, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Aurora II, LP and 1% owned by Reliant Energy Aurora I, LP

-Reliant Energy Indian River, LLC (EWG), a Delaware limited liability company, Reliant Energy Osceola Holding Co. I, LLC, a Delaware limited liability company, and Reliant Energy Osceola Holding Company II, LLC, a Delaware limited liability company, are depicted as being wholly-owned subsidiaries of Reliant Energy Florida Holdings, LLC

-Reliant Energy Osceola, LLC (EWG), a Delaware limited liability company, is depicted as being 50% owned by Reliant Energy Osceola Holding Co. I, LLC and 50% owned by Reliant Energy Osceola Holding Co. II, LLC

-Reliant Energy Coolwater, LLC (EWG), a Delaware limited liability company, Reliant Energy Ellwood, LLC (EWG), a Delaware limited liability company, Reliant Energy Etiwanda, LLC (EWG), a Delaware limited liability company, Reliant Energy Mandalay, LLC (EWG), a Delaware limited liability company and Reliant Energy Ormond Beach, LLC (EWG), a Delaware limited liability company, are depicted as being wholly-owned subsidiaries of Reliant Energy California Holdings, LLC

-Reliant Energy Europe, Inc., a Netherlands entity, is depicted as being wholly-owned by Reliant Energy Capital (Europe), Inc.

-Reliant Energy Wholesale (Europe) Holdings BV, a Netherlands entity, is depicted as being wholly-owned by Reliant Energy (Europe), Inc.

-Reliant Energy Wholesale (Europe) CV, a Netherlands entity, is depicted as being wholly-owned by Reliant Energy Wholesale (Europe) Holdings BV

-Reliant Energy Wholesale (Europe) Holdings II CV, a Netherlands entity, is depicted as being depicted as 99.5% owned by Reliant Energy Wholesale (Europe) CV and .5% owned by Reliant Energy Wholesale (Europe) Holdings BV

-Reliant Energy UNA, BV, a Netherlands entity, is depicted as being 52% owned by Reliant Energy Wholesale (Europe) CV and 48% owned by Reliant Energy Wholesale (Europe) Holdings II CV

-N.V. UNA, a Netherlands entity, is depicted as being wholly-owned by Reliant Energy UNA, BV

EWG:	Exempt Wholesale Generator under Energy Policy Act of 1992
QF:	Qualifying Facility under Public Utility Regulatory Policies Act of 1978

Page A-11 contains the January 2001 organizational chart showing Reliant Energy, Incorporated, a Texas corporation, as the parent company, with the following entities depicted as its wholly-owned subsidiaries:

-Reliant Energy Thermal Systems, Inc., a Delaware corporation
- -Reliant Energy Resources Corp., a Delaware corporation
- -Reliant Energy International, Inc., a Delaware corporation
- -Reliant Resources, Inc., a Delaware corporation
- -Houston Industries FinanceCo GP, LLC, a Delaware limited liability company
- -Reliant Energy FinanceCo II GP, LLC, a Delaware limited liability company
- -Reliant Energy FinanceCo III GP, LLC, a Delaware limited liability company
- -Reliant Energy FinanceCo IV GP, LLC, a Delaware limited liability company
- -Houston Industries Funding Company, a Delaware company
- -HL&P Capital Trust I, a Delaware business trust
- -HL&P Capital Trust II, a Delaware business trust
- -REI Trust I, a Delaware business trust
- -REI Trust II, a Delaware business trust
- -HL&P Receivables, Inc., a Delaware corporation
- -Reliant Energy Transition Bond Company LLC, a Delaware limited liability company
- -Reliant Energy Investment Management, Inc., a Delaware corporation
- -Reliant Energy MergerCo, Inc., a Delaware corporation
- -Reliant Energy Power Systems, Inc., a Delaware corporation
- -Reliant Energy Properties, Inc., a Delaware corporation
- -Reliant Energy Products, Inc., a Delaware corporation
- -Reliant Energy Regco, Inc., a Delaware corporation
- -Reliant Energy Tegco, Inc., a Delaware corporation
- -Reliant Energy Water, Inc., a Delaware corporation
- -Houston Lighting & Power Company*, a Texas company
- -NorAm Energy Corp.*, a Delaware corporation
- -Houston Industries Incorporated*, a Texas corporation
- -Utility Rail Services, Inc.*, a Delaware corporation
- -Houston Industries Energy (UK), Inc.*, a Delaware corporation

-Northwind Houston L.L.C., a Delaware limited liability company, is depicted as being 75% owned by Reliant Energy Thermal Systems, Inc.

-Reliant Energy Thermal Systems (Delaware), Inc., a Delaware corporation, is depicted as being wholly-owned by Reliant Energy Thermal Systems, Inc.

-Northwind Houston L.P., a Delaware limited partnership, is depicted as being 74.61% owned by Reliant Energy Thermal Systems (Delaware), Inc.

-Entex Gas Resources Corp., a Texas corporation, Entex Gas Marketing Company, a Texas company, Industrial Gas Supply Corporation, a Texas corporation, Louisiana Unit Gas Transmission Company, a Texas company, Unit Gas Transmission Company, a Delaware company, Reliant Energy Consumer Group, Inc., a Delaware corporation, ALG Gas Supply Company, a Delaware company, Allied Materials Corporation, a Texas corporation, Entex Fuels, Inc., a Texas corporation, Entex NGV, Inc., a Delaware corporation, Minnesota Intrastate Pipeline Company, a Delaware company, Arkansas Louisiana Finance Corporation, a Delaware corporation, National Furnace Company, a Texas company, NorAm Financing I, a Delaware business trust, Arkla Industries Inc.*, a Delaware corporation, NorAm Utility Services, Inc.*, a Delaware corporation, Arkla Products Company*, a Delaware company, Intex, Inc.*, a Texas corporation, Reliant Energy Retail, Inc.*, a Delaware corporation, Entex Oil & Gas Co.*, a Texas company, United Gas, Inc.*, a Texas corporation, Reliant

Energy Gas Transmission Company, a Delaware company, Mississippi River Transmission Corporation, a Delaware corporation, Illinois Gas Transmission Company, a Delaware company, Reliant Energy Intrastate Holdings, LLC, a Delaware limited liability company, Reliant Energy Pipeline Services, Inc., a Delaware corporation, Reliant Energy Trading and Transportation Group, Inc., a Texas corporation, Reliant Energy Field Services, Inc., a Delaware corporation, Blue Jay Gas Company*, a Delaware company, MRT Energy Marketing Company, a Delaware company, Reliant Energy Hub Services, Inc.*, a Delaware corporation, are depicted as being wholly-owned by Reliant Energy Resources Corp.

-Reliant Energy Retail Interests, Inc.*, a Delaware corporation, is depicted as being wholly-owned by Reliant Energy Retail, Inc.

-MRT Services Company, a Delaware company, and MRT Holdings, Inc., a Delaware corporation and MRT Holdings, Inc., a Delaware corporation, are depicted as being wholly-owned by Mississippi River Transmission Corporation

-Pine Pipeline Acquisition Company, LLC, a Delaware limited liability company, is depicted as being 81% owned by Reliant Energy Intrastate Holdings, LLC

-Reliant Energy OQ, LLC, a Delaware limited liability company, is wholly-owned by Reliant Energy Pipeline Services, Inc.

-OQ Partners, a Texas partnership is depicted as being 50% owned by Reliant Energy OQ, LLC

-Reliant Energy Field Services Holdings, Inc., a Delaware corporation, and Reliant Energy Gas Processing, Inc., a Delaware corporation, are depicted as being wholly-owned by Reliant Energy Field Services, Inc.

-Houston Industries FinanceCo LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy, Incorporation, and 1% owned by Houston Industries FinancCo GP, LLC

-Reliant Energy FinanceCo II LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy, Incorporation, and 1% owned by Reliant Energy FinanceCo II GP, LLC

-Reliant Energy FinanceCo III LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy, Incorporation, and 1% owned by Reliant Energy FinanceCo III GP, LLC

-Reliant Energy FinanceCo IV LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy, Incorporation, and 1% owned by Reliant Energy FinanceCo IV GP, LLC

-UFI Services, Inc., a Delaware corporation is depicted as being wholly-owned by Utility Rail Services, Inc.

-STP Nuclear Operating Company, a Texas nonprofit corporation, and AMT Land, Inc., a Delaware associated company, are reflected on the organizational chart under the heading “Other”.

* Inactive

Page A-12 contains the January 2001 organizational chart showing Reliant Resources, Inc., a Delaware corporation, as the parent company, with the following entities depicted as its wholly-owned subsidiaries:

-Reliant Energy Communications, Inc., a Delaware corporation
- -Reliant Energy Ventures, Inc., a Delaware corporation
- -Reliant Energy Broadband, Inc., a Delaware corporation
- -Guidestreet, Inc., a Delaware corporation
- -Reliant Energy Net Ventures, Inc., a Delaware corporation
- -Reliant Resources International Services, Inc., a Delaware corporation
- -Arkla Finance Corporation, a Delaware corporation
- -Reliant Energy.com, Inc., a Delaware corporation
- -Reliant Energy Retail Holdings, LLC, a Delaware limited liability company
- -Reliant Energy Services, Inc., a Delaware corporation
- -Reliant Energy Services International, Inc., a Delaware corporation
- -Reliant Energy Europe Trading & Marketing, Inc., a Delaware corporation
- -Reliant Energy Power Generation, Inc., a Delaware corporation
- -Reliant Energy Wholesale Service Company, a Delaware company
- -Reliant Energy Trading Exchange, Inc., a Delaware corporation

and

-Insync Internet Services, Incorporated, a Texas corporation, Reliant Energy Communications (Delaware), LLC, a Delaware limited liability company, and Reliant Energy Communications (Texas), LLC, a Delaware limited liability company, are depicted as being wholly-owned by Reliant Energy Communication, Inc.

-Reliant Energy Communications, Networks, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Communications (Delaware), LLC and 1% owned by Reliant Energy Communications (Texas), LLC

-Reliant Energy Customer Care Services, LLC, a Delaware limited liability company, Reliant Energy Retail Services, LLC, a Delaware limited liability company, Reliant Energy Solutions, LLC, a Delaware limited liability company, and StarEn Power, LLC, a Delaware limited liability company, are depicted as being wholly-owned by Reliant Energy Retail Holdings, LLC

-Reliant Energy Services Channelview, LLC, a Delaware limited liability company, Reliant Energy Services Desert Basin, LLC, a Delaware limited liability company, Reliant Energy Services Mid-Stream, LLC, a Delaware limited liability company, Reliant Energy Services New Mexico, LLC, a Delaware limited liability company, and Reliant Energy Services Holdings, Inc., a Delaware corporation, are depicted as being wholly-owned by Reliant Energy Services, Inc.

-Reliant Energy Services Canada, Ltd., a Canadian corporation, is depicted as being a wholly-owned subsidiary of Reliant Energy Services International, Inc.

-Reliant Energy Trading & Marketing, B.V., a Netherlands entity, is depicted as being a wholly-owned subsidiary of Reliant Energy Europe Trading & Marketing, Inc.

-Reliant Energy Trading & Marketing GmbH, a German entity, is depicted as being wholly-owned by Reliant Energy Trading & Marketing B.V.

-Energy Platform Trading Holding Company, Inc., a Delaware corporation, is depicted as being 16% owned by Reliant Energy Trading Exchange, Inc.

-Reliant Resources Foundation, a Texas non-profit corporation, is reflected on the organizational chart under the heading “Other”.

Page A-13 contains the January 2001 organizational chart showing Reliant Resources, Inc. (“RRI”), a Delaware corporation, as the parent company to Reliant Energy Power Generation, Inc. (“REPG”), a Delaware corporation and the following entities wholly-owned subsidiaries by REPG:

-Reliant Energy Sabine (Delaware), Inc., a Delaware corporation
- -Reliant Energy Sabine (Texas), Inc., a Delaware corporation
- -Reliant Energy Deer Park, Inc., a Delaware corporation
- -Reliant Energy Channelview (Delaware) LLC, a Delaware limited liability company
- -Reliant Energy Channelview (Texas), LLC, a Delaware limited liability company
- -Reliant Energy Renewables, Inc., a Delaware corporation
- -Reliant Energy Northeast Holdings, Inc., a Delaware corporation
- -Reliant Energy Mid-Atlantic Development, Inc., a Delaware corporation
- -Reliant Energy McHenry Holding Corp., a Delaware corporation
- -Reliant Energy Shelby Holding Corp., a Delaware corporation
- -Reliant Energy Aurora Holding Corp., a Delaware corporation
- -Reliant Energy Choctaw County, LLC, a Delaware corporation
- -Reliant Energy Florida Holdings, LLC, a Delaware limited liability company
- -Reliant Energy California Holdings, LLC, a Delaware limited liability company
- -El Dorado Energy, LLC (EWG), a Delaware limited liability company
- -Reliant Energy Arrow Canyon, LLC, a Delaware limited liability company
- -Reliant Energy Bighorn, LLC, a Delaware limited liability company
- -Reliant Energy Colusa County, LLC, a Delaware limited liability company
- -Reliant Energy Desert Basin, LLC, a Delaware limited liability company
- -Reliant Energy Sunrise, LLC, a Delaware limited liability company
- -Reliant Energy Power Operations I, Inc., a Delaware corporation
- -Reliant Energy Power Operations II, Inc., a Delaware corporation
- -Reliant Energy Development Services, Inc., a Delaware corporation
- -Reliant Energy Capital (Europe), Inc., a Delaware corporation

and

-Sabine Cogen, LP, a Delaware limited partnership, is depicted as being 49% owned by Reliant Energy Sabine (Delaware), Inc. and 51% owned by Reliant Energy Sabine (Texas), Inc.

-Reliant Energy Channelview LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Channelview (Delaware) LLC and 1% owned by Reliant Energy Channelview (Texas) LLC

-Reliant Energy Renewables Holdings, LLC, a Delaware limited liability company, Reliant Energy Renewables Atascocita GP, LLC, a Delaware limited liability company, Reliant Energy Renewables Bluebonnet GP, LLC, a limited liability company, Reliant Energy Renewables Coastal Plains GP, LLC, a Delaware limited liability company, Reliant Energy Renewables Comal County GP, LLC, a Delaware limited liability company, Reliant Energy Renewables Conroe, GP, LLC, a Delaware limited liability company, Reliant Energy Renewables Eastside GP, LLC, a Delaware limited liability company, Reliant Energy Renewables Hillside GP, LLC, a limited liability company, Reliant Energy Renewables Lacy Lakeview GP, LLC, a Delaware limited liability company, Reliant Energy Renewables Pecan Praire GP, LLC, a Delaware limited liability company, Reliant Energy Renewables Security, GP, LLC, a Delaware limited liability company, Reliant Energy Renewables Temple GP, LLC, a Delaware limited liability company and Reliant Energy Renewables Wilkinson

County GP, LLC, a Delaware limited liability company are depicted as being wholly-owned by Reliant Energy Renewables, Inc.

and

-Reliant Energy Renewables Atascocita, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Renewables Holdings, LLC, and 1% owned by Reliant Energy Renewables Atascocita GP, LLC

-Reliant Energy Renewables Bluebonnet, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Renewables Holdings, LLC and 1% owned by Reliant Energy Renewables Bluebonnet GP, LLC

-Reliant Energy Renewables Coastal Plains, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Renewable Holdings, LLC and 1% owned by Reliant Energy Coastal Plains GP, LLC

-Reliant Energy Renewables Comal County, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Renewables Holdings, LLC and 1% owned by Reliant Energy Renewables Comal County GP, LLC

-Reliant Energy Renewables Conroe, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Renewables Holdings, LLC and 1% owned by Reliant Energy Conroe, GP, LLC

-Reliant Energy Renewables Eastside, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Renewables Holdings, LLC and 1% owned by Reliant Energy Eastside GP, LLC

-Reliant Energy Renewables Hillside, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Renewables Holdings, LLC and 1% owned by Reliant Energy Renewables Eastside GP, LLC

-Reliant Energy Renewables Lacy Lakeview, LP, a limited partnership, is depicted as being 99% owned by Reliant Energy Renewable Holdings, LLC and 1% owned by Reliant Energy Renewables Lacy Lakeview GP, LLC

-Reliant Energy Renewables Pecan Praire, LP, a limited partnership, is depicted as being 99% owned by Reliant Energy Renewable Holdings, LLC and 1% owned by Reliant Energy Renewables Pecan Praire GP, LLC

- Reliant Energy Renewables Security, LP, a limited partnership, is depicted as being 99% owned by Reliant Energy Renewable Holdings, LLC and 1% owned by Reliant Energy Renewables Security GP, LLC

-Reliant Energy Renewables Temple, LP, a limited partnership, is depicted as being 99% owned by Reliant Energy Renewable Holdings, LLC and 1% owned by Reliant Energy Renewables Temple GP, LLC

-Reliant Energy Renewables Williamson County, LP, a limited partnership, is depicted as being 99% owned by Reliant Energy Renewable Holdings, LLC and 1% owned by Reliant Energy Renewables Williamson County GP, LLC

-Reliant Energy Northeast Generation, Inc., a Delaware corporation, is depicted as being wholly-owned by Reliant Energy Northeast Holdings, Inc.

-Reliant Energy Atlantic, LLC, a Delaware limited liability company, Reliant Energy Erie West, LLC, a Delaware limited liability company, Reliant Energy Hunterstown, LLC, a Delaware limited liability company, Reliant Energy Portland, LLC, a Delaware limited liability company, Reliant Energy Seward, LLC, a Delaware limited liability company, and Reliant Energy Titis, LLC, a Delaware limited liability company are depicted as being wholly-owned by Reliant Energy Mid-Atlantic Development, Inc.

-Reliant Energy Keystone Fuels, LLC and Reliant Energy Mid-Atlantic Power Holdings, LLC are depicted as being wholly-owned by Reliant Energy Northeast Generation, Inc.

-Reliant Energy Maryland Holdings, LLC, a Delaware limited liability company, Reliant Energy Mid-Atlantic Power Services, Inc., a Delaware corporation, Reliant Energy New Jersey Holdings, LLC, a Delaware limited liability company and Reliant Energy Northeast Management Company, a Pennsylvania company, are depicted as being wholly-owned by Reliant Energy Mid-Atlantic Power Holdings, LLC

-Reliant Energy McHenry Development Corp., a Delaware corporation, is depicted as being wholly-owned by Reliant Energy McHenry Holding Corp.

-Reliant Energy McHenry I, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy McHenry Holding Corp. and 1% owned by Reliant Energy McHenry Development Corp.

-Reliant Energy McHenry II, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy McHenry Holding Corp. and 1% owned by Reliant Energy Henry Development Corp.

-In addition, Reliant Energy McHenry County, LP, a limited partnership, is 99% owned by Reliant Energy McHenry II, LP and 1% owned by Reliant Energy McHenry I, LP

-Reliant Energy Shelby Development Corp., a Delaware corporation, is depicted as being wholly-owned by Reliant Energy Shelby Holding Corp.

-Reliant Energy Shelby I, LP, a Delaware limited partner, is depicted as being 99% owned by Reliant Energy Shelby Holding Corp. and 1% owned by Reliant Energy Shelby Development Corp.

-Reliant Energy Shelby II, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Shelby Holding Corp. and 1% owned by Reliant Energy Shelby Development Corp.

-In addition, Reliant Energy Shelby County, LP and Reliant Energy Shelby County II, LP are both depicted as being 99% owned by Reliant Energy Shelby II, LP and 1% owned by Reliant Energy Shelby I, LP

-Reliant Energy Aurora Development Corp., a Delaware corporation, is depicted as being a wholly-owned subsidiary of Reliant Energy Aurora Holding Corp.

-Reliant Energy Aurora I, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Aurora Holding Corp. and 1% owned by Reliant Energy Aurora Development Corp.

-Reliant Energy Aurora II, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Aurora Holding Corp. and 1% owned by Reliant Energy Aurora Development Corp.

-In addition, Reliant Energy Aurora, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Aurora II, LP and 1% owned by Reliant Energy Aurora I, LP

-Reliant Energy Indian River, LLC, a Delaware limited liability company, Reliant Energy Osceola, LLC, a Delaware limited liability company, and Reliant Energy Osceola Holding Co. II, LLC, a Delaware limited liability company, are depicted as being wholly-owned by Reliant Energy Florida Holdings, LLC

-In addition, Reliant Energy Osceola, LLC, a Delaware limited liability company, is depicted as being 50% owned by Reliant Energy Osceola Holding Co.II, LLC and 50% owned by Reliant Energy Osceola Holding Co. I, LLC

-Reliant Energy Coolwater, LLC (EWG), a Delaware limited liability company, Reliant Energy Ellwood, LLC (EWG), a Delaware limited liability company, Reliant Energy Etiwanda, LLC (EWG), a limited liability company, Reliant Energy Mandalay, LLC (EWG), a limited liability company, and Reliant Energy Ormond Beach, LLC (EWG), a limited liability company are depicted as being wholly-owned by Reliant Energy California Holdings, LLC

-Reliant Energy Europe, Inc., a Netherlands entity, is depicted as being wholly-owned by Reliant Energy Capital (Europe), Inc.

-Reliant Energy Wholesale (Europe) Holdings B.V., a Netherlands entity, is depicted as being wholly-owned by Reliant Energy Wholesale (Europe) Holdings, BV

-Reliant Energy Wholesale (Europe) CV, a Netherlands entity, is depicted as being 99.5% owned by Reliant Energy Europe, Inc. and 0.5% owned by Reliant Energy Wholesale (Europe) Holdings BV

-In addition, Reliant Energy Wholesale (Europe) Holdings II CV, a Netherlands entity, is depicted as being 99.5% owned by Reliant Energy Europe, Inc. and 0.5% owned by Reliant Energy Wholesale (Europe) Holdings BV

-Reliant Energy UNA, BV, a Netherlands entity, is depicted as being 52% owned by Reliant Energy Wholesale (Europe) CV and 48% owned by Reliant Energy UNA, BV

-N.V. Una, a Netherlands entity, is depicted as being wholly-owned by Reliant Energy UNA, BV

EWG: Exempt Wholesale Generator under Energy Policy Act of 1992

Page A-14 contains the January 2001 organizational chart showing Reliant Energy International, Inc. (“REII”), a Delaware corporation, as a wholly-owned subsidiary of Reliant Energy, Incorporated (“REI”), a Texas corporation, as the parent company, with the following entities depicted as wholly-owned subsidiaries of REII:

-Reliant Energy Light Inc., a Delaware corporation
- -Reliant Energy Brazil Ventures Ltd.*, a Cayman Islands entity
- -Reliant Energy Brazil Tiete Ltd.*, a Cayman Islands entity
- -Reliant Energy Brazil Ltd.*, a Cayman Islands entity
- -Reliant Energy International Services, Inc., a Delaware corporation
- -Reliant Energy Salvador Holding Company Ltd., a Cayman Islands entity
- -Reliant Energy Holdings Ltd., a Cayman Islands entity
- -Reliant Energy Outsource Ltd.*, a Cayman Islands entity
- -Reliant Energy International Holdings, LLC, a Delaware limited liability partnership
- -Worldwide Electric Holdings B.V.*, a Netherlands entity
- -HI Energy Holdings I B.V.*, a Netherlands entity
- -Reliant Energy International II, Inc., a Delaware corporation

and

-Reliant Energy Santiago del Estero, S.A., an Argentine entity, is depicted as being 99%¹ owned by REII

-Empresa Distribuidora de Electricidad de Santiago del Estero S.A. (EDESE), an Argentine entity, is depicted as being 90% owned by Reliant Energy Santiago del Estero

-Reliant Energy Argentine Holdings Ltd. (FUCO¹), a Cayman Islands entity, and Reliant Energy Cayman Investments Ltd., a Cayman Islands entity, are depicted as being wholly-owned by Reliant Energy Cayman Holdings Ltd.

-Reliant Energy Argentina S.A. (EWG), an Argentine entity, is depicted as being 99% owned by Reliant Energy Cayman Holdings Ltd.

-Reliant Energy Argener S.A., an Argentine entity, is depicted as being 49% owned by Reliant Energy Argentine Holdings Ltd. and 51% owned by Reliant Energy Argentina S.A.

and

-Reliant Energy Opco S.A.(EWG), an Argentine entity, is depicted as being 99% owned by Reliant Energy Argentine S.A.

-Reliant Energy Cayman Holdings Ltd., a Cayman Islands entity, is depicted as being wholly-owned by Reliant Energy Light, Inc.

-Reliant Energy Cayman Acquisitions Ltd, a Cayman Islands entity, and Reliant Energy Cayman Ltd., a Cayman Islands entity, are depicted as being wholly-owned by Reliant Energy Cayman Investments Ltd.

-Reliant Energy Brasil, Ltda.*, a Brazilian limited liability company, is depicted as being 99%¹ owned by REII

-Reliant Energy International Brasil Ltda.*, a Brazilian entity, is depicted as being 99%¹ owned by Reliant Energy Brazil Ltd.

-HIE Brazil Rio Sul Ltda.*, a Brazilian entity, is depicted as being 20% owned by Reliant Energy Brazil Ltd.

-Reliant Energy Columbia Ltda, a Columbian entity, is depicted as being 99%¹ owned by REII and 1% by Reliant Energy International Holdings, LLC

-Reliant Energy El Salvador, S.A. de C.V., an El Salvadorian entity, is depicted as being 1% owned by REII and 99% owned by Reliant Energy International Holdings, LLC

-Venus Generation El Salvador*, a Cayman Islands entity, is depicted as being 50% owned by Reliant Energy Outsource Ltd.

-Reliant Energy India, Inc., a MAU entity, HIE Ford Heights, Inc., a Delaware corporation, and HIE Fulton, Inc., a Delaware corporation, are depicted as being wholly-owned by Reliant Energy International II, Inc.

-Reliant Energy Rain, Inc, a MAU entity, is depicted as being wholly-owned by Reliant Energy India, Inc.

and

-Rain Calcining Limited (FUCO²), an Indian entity, is depicted as being 25% owned by Reliant Energy Rain, Inc.

Certain ownership amounts are rounded.
(1)	Law requires at least two shareholders of record; Reliant Energy International exercises beneficial ownership of all shares
*	Inactive
EWG:	Exempt Wholesale Generator under Energy Policy Act of 1992
FUCO:	Foreign Utility Company under Energy Policy Act of 1992
QF:	Qualifying Facility under Public Utility Regulatory Policies Act of 1978

Page A-15 contains the April 2001 organizational chart showing Reliant Energy, Incorporated (“REI”), a Texas corporation, as the parent company, with the following entities depicted as its wholly-owned subsidiaries:

-Reliant Energy Thermal Systems, Inc., a Delaware corporation
- -Reliant Energy Resources Corp., a Delaware corporation
- -Reliant Energy International, Inc., a Delaware corporation
- -Reliant Resources, Inc., a Delaware corporation
- -Houston Industries FinanceCo GP, LLC, a Delaware limited liability company
- -Reliant Energy FinanceCo II GP, LLC, a Delaware limited liability company
- -Reliant Energy FinanceCo III GP, LLC, a Delaware limited liability company
- -Reliant Energy FinanceCo IV GP, LLC, a Delaware limited liability company
- -Houston Industries Funding Company, a Delaware company
- -HL&P Capital Trust I, a Delaware business trust
- -HL&P Capital Trust II, a Delaware business trust
- -REI Trust I, a Delaware business trust
- -REI Trust II, a Delaware business trust
- -HL&P Receivables, Inc., a Delaware corporation
- -Reliant Energy Transition Bond Company LLC, a Delaware limited liability company
- -Reliant Energy Investment Management, Inc., a Delaware corporation
- -Reliant Energy Power Systems, Inc., a Delaware corporation
- -Reliant Energy Properties, Inc., a Delaware corporation
- -Reliant Energy Products, Inc., a Delaware corporation
- -Reliant Energy Regco, Inc., a Delaware corporation
- -Reliant Energy Tegco, Inc., a Delaware corporation
- -Reliant Energy Water, Inc., a Delaware corporation
- -Houston Lighting & Power Company*, a Texas company
- -NorAm Energy Corp.*, a Delaware corporation
- -Houston Industries Incorporated*, a Texas corporation
- -Utility Rail Services, Inc.*, a Delaware corporation
- -Houston Industries Energy (UK), Inc.*, a Delaware corporation

and

-Pantellos Corporation, a Delaware corporation, is depicted as being 7.35% owned by REI

-Northwind Houston L.L.C., a Delaware limited liability company, is depicted as being 75% owned by Reliant Energy Thermal Systems, Inc.

-Reliant Energy Thermal Systems (Delaware), Inc., a Delaware corporation, is depicted as being wholly-owned by Reliant Energy Thermal Systems, Inc.

-Northwind Houston L.P., a Delaware limited partnership, is depicted as being 74.61% owned by Reliant Energy Thermal Systems (Delaware), Inc.

and

-Entex Gas Resources Corp., a Texas corporation, Entex Gas Marketing Company, a Texas company, Industrial Gas Supply Corporation, a Texas corporation, Louisiana Unit Gas Transmission Company, a Texas company, Unit Gas Transmission Company, a Delaware company, Reliant Energy Consumer Group, Inc., a Delaware corporation, ALG Gas Supply Company, a Delaware company, Allied Materials Corporation, a Texas corporation, Entex Fuels, Inc., a Texas corporation, Entex NGV, Inc., a Delaware corporation, Minnesota Intrastate Pipeline Company, a Delaware company, Arkansas

Louisiana Finance Corporation, a Delaware corporation, National Furnace Company, a Texas company, NorAm Financing I, a Delaware business trust, Arkla Industries Inc.*, a Delaware corporation, NorAm Utility Services, Inc., a Delaware corporation, Arkla Products Company*, a Delaware company, Intex, Inc.*, a Texas corporation, Reliant Energy Funds Management, Inc.*, a Delaware corporation, Reliant Energy Retail, Inc.*, a Delaware corporation, Entex Oil & Gas Co.*, a Texas company, United Gas, Inc.*, a Texas corporation, Reliant Energy Gas Transmission Company, a Delaware company, Mississippi River Transmission Corporation, a Delaware corporation, Illinois Gas Transmission Company, a Delaware company, Reliant Energy Intrastate Holdings, LLC, a Delaware limited liability company, Reliant Energy Pipeline Services, Inc., a Delaware corporation, Reliant Energy Trading and Transportation Group, Inc., a Texas corporation, Reliant Energy Field Services, Inc., a Delaware corporation, Blue Jay Gas Company*, a Delaware company, MRT Energy Marketing Company, a Delaware company, Reliant Energy Hub Services, Inc.*, a Delaware corporation are depicted as being wholly-owned by Reliant Energy Resources Corp.

-Reliant Energy Retail Interests, Inc., a Delaware corporation, is depicted as being wholly-owned by Reliant Energy Retail, Inc.

-MRT Services Company, a Delaware company, and MRT Holdings, Inc., a Delaware corporation, are depicted as being wholly-owned by Mississippi River Transmission Corporation

-Pipe Pipelines Acquisition Company, LLC, a Delaware limited liability company, is depicted as being 81% owned by Reliant Energy Intrastate Holdings, LLC

-Reliant Energy OQ, LLC, a Delaware limited liability company, is depicted as being wholly-owned by Reliant Energy Pipeline Services, Inc.

and

-OQ Partners, a Texas partnership, is depicted as being 50% owned by Reliant Energy Pipeline Services, Inc.

-Reliant Energy Field Services Holdings, Inc., a Delaware corporation, and Reliant Energy Gas Processing, Inc., a Delaware corporation, are depicted as being wholly-owned by Reliant Energy Field Services, Inc.

-Houston Industries FinanceCo LP, a Delaware limited partnership, is depicted as being 99% owned by REI, and 1% owned by Houston Industries FinanceCo GP, LLC

-Reliant Energy FinanceCo II LP, a Delaware limited partnership, is depicted as being 99% owned by REI, and 1% owned by Reliant Energy FinanceCo II GP, LLC

-Reliant Energy FinanceCo III LP, a Delaware limited partnership, is depicted as being 99% owned by REI, and 1% owned by Reliant Energy FinanceCo III GP, LLC

and

-Reliant Energy FinanceCo IV LP, a Delaware limited partnership, is 9 depicted as being 9% owned by REI, and 1% owned by Reliant Energy FinanceCo IV GP, LLC

-Reliant Energy MergerCo, Inc., a Delaware corporation, is depicted as being wholly-owned by Reliant Energy Regco, Inc.

and

-UFI Services, Inc.*, a Delaware corporation, is depicted as being wholly-owned by Utility Rail Services, Inc.

-STP Nuclear Operating Company, a Texas non-profit corporation, and AMT Land, Inc., a Delaware corporation, are reflected on the organizational chart under the heading “Other”.

Page A-16 contains the April 2001 organizational chart showing Reliant Resources, Inc. (“RRI”), a Delaware corporation, as a subsidiary of Reliant Energy, Incorporated (“REI”), a Texas corporation, as the parent company, with the following entities depicted as wholly-owned subsidiaries of RRI:

-Reliant Energy Communications, Inc., a Delaware corporation
- -Reliant Energy Ventures, Inc., a Delaware corporation
- -Reliant Energy Broadband, Inc., a Delaware corporation
- -Guidestreet, Inc., a Delaware corporation
- -Reliant Energy Net Ventures, Inc., a Delaware corporation
- -Reliant Resources International Services, Inc., a Delaware corporation
- -Arkla Finance Corporation, a Delaware corporation
- -Reliant Energy.com, Inc., a Delaware corporation
- -Reliant Energy Retail Holdings, LLC, a Delaware limited liability company
- -Reliant Energy Services, Inc., a Delaware corporation
- -Reliant Energy Services International, Inc., a Delaware corporation
- -Reliant Energy Europe Trading & Marketing, Inc., a Delaware corporation
- -Reliant Energy Power Generation, Inc., a Delaware corporation
- -Reliant Energy Wholesale Service Company, a Delaware company
- -Reliant Energy Trading Exchange, Inc., a Delaware corporation

and

-Insync Internet Services, Incorporated, a Texas corporation, Reliant Energy Communications (Delaware), LLC, a Delaware limited liability company, and Reliant Energy Communications (Texas), LLC, a Delaware limited liability company, are depicted as being wholly-owned by Reliant Energy Communication, Inc.,

-In addition, Reliant Energy Communications, Networks, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Communications (Delaware), LLC and 1% owned by Reliant Energy Communications (Texas), LLC

-Itron, Inc., a Washington corporation, is depicted as being 8.38% owned by Reliant Energy Venture, Inc.

-Reliant Energy Customer Care Services, LLC, a Delaware limited liability company, Reliant Energy Retail Services, LLC, a Delaware limited liability company, Reliant Energy Solutions, LLC, a Delaware limited liability company, StarEn Power, LLC, a Delaware limited liability company, and New Texas Energy Company, a Delaware corporation, are depicted as being wholly-owned by Reliant Energy Retail Holdings, LLC

-Reliant Energy Services Channelview, LLC, a Delaware limited liability company, Reliant Energy Services Desert Basin, LLC, a Delaware limited liability company, Reliant Energy Services Mid-Stream, LLC, a Delaware limited liability company, Reliant Energy Services New Mexico, LLC, a Delaware limited liability company, and Reliant Energy Services Holdings, Inc., a Delaware corporation, are depicted as being wholly-owned by Reliant Energy Services, Inc.

and

-Reliant Energy Services Canada, Ltd., a Canadian corporation, is depicted as being a wholly-owned subsidiary of Reliant Energy Services International, Inc.

-Reliant Energy Trading & Marketing, B.V., a Netherlands entity, is depicted as being a wholly-

owned subsidiary of Reliant Energy Europe Trading & Marketing, Inc.

and

-Reliant Energy Trading & Marketing GmbH, a German entity, is depicted as being wholly-owned by Reliant Energy Trading & Marketing B.V.

-Energy Platform Trading Holding Company, Inc., a Delaware corporation, is depicted as being 16% owned by Reliant Energy Trading Exchange, Inc.

-Reliant Resources Foundation, a Texas non-profit corporation, is reflected on the organizational chart under the heading “Other”.

Page A-17 contains the April 2001 organizational chart showing Reliant Resources, Inc. (“RRI”), a Delaware corporation, as the parent company to Reliant Energy Power Generation, Inc. (“REPG”), a Delaware corporation, and the following entities as wholly-owned by REPG:

-Reliant Energy Sabine (Delaware), Inc., a Delaware corporation
- -Reliant Energy Sabine (Texas), Inc., a Delaware corporation
- -Reliant Energy Deer Park, Inc., a Delaware corporation
- -Reliant Energy Channelview (Delaware) LLC, a Delaware limited liability company
- -Reliant Energy Channelview (Texas), LLC, a Delaware limited liability company
- -Reliant Energy Renewables, Inc., a Delaware corporation
- -Reliant Energy Northeast Holdings, Inc., a Delaware corporation
- -Reliant Energy Mid-Atlantic Development, Inc., a Delaware corporation
- -Reliant Energy McHenry Holding Corp., a Delaware corporation
- -Reliant Energy Shelby Holding Corp., a Delaware corporation
- -Reliant Energy Aurora Holding Corp., a Delaware corporation
- -Reliant Energy Choctaw County, LLC, a Delaware corporation
- -Reliant Energy Florida Holdings, LLC, a Delaware limited liability company
- -Reliant Energy California Holdings, LLC, a Delaware limited liability company
- -El Dorado Energy, LLC (EWG), a Delaware limited liability company
- -Reliant Energy Arrow Canyon, LLC, a Delaware limited liability company
- -Reliant Energy Bighorn, LLC, a Delaware limited liability company
- -Reliant Energy Colusa County, LLC, a Delaware limited liability company
- -Reliant Energy Desert Basin, LLC, a Delaware limited liability company
- -Reliant Energy Sunrise, LLC, a Delaware limited liability company
- -Reliant Energy Power Operations I, Inc., a Delaware corporation
- -Reliant Energy Power Operations II, Inc., a Delaware corporation
- -Reliant Energy Development Services, Inc., a Delaware corporation
- -Reliant Energy Capital (Europe), Inc., a Delaware corporation

and

-Sabine Cogen, LP, a Delaware limited partnership, is depicted as being 49% owned by Reliant Energy Sabine (Delaware), Inc. and 51% owned by Reliant Energy Sabine (Texas), Inc.

-Reliant Energy Channelview LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Channelview (Delaware) LLC and 1% owned by Reliant Energy Channelview (Texas) LLC

-Reliant Energy Renewables Holdings, LLC, a Delaware limited liability company, Reliant Energy Renewables Atascocita GP, LLC, a Delaware limited liability company, Reliant Energy Renewables Bluebonnet GP, LLC, a limited liability company, Reliant Energy Renewables Coastal Plains GP, LLC, a Delaware limited liability company, Reliant Energy Renewables Comal County GP, LLC, a Delaware limited liability company, Reliant Energy Renewables Conroe, GP, LLC, a Delaware limited liability company, Reliant Energy Renewables Eastside GP, LLC, a Delaware limited liability company, Reliant Energy Renewables Hillside GP, LLC, a limited liability company, Reliant Energy Renewables Lacy Lakeview GP, LLC, a Delaware limited liability company, Reliant Energy Renewables Pecan Praire GP, LLC, a Delaware limited liability company, Reliant Energy Renewables Security, GP, LLC, a Delaware limited liability company, Reliant Energy Renewables Temple GP, LLC, a Delaware limited liability company and Reliant Energy Renewables Wilkinson

County GP, LLC, a Delaware limited liability company are depicted as being wholly-owned by Reliant Energy Renewables, Inc.

and

-Reliant Energy Renewables Atascocita, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Renewables Holdings, LLC, and 1% owned by Reliant Energy Renewables Atascocita GP, LLC

-Reliant Energy Renewables Bluebonnet, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Renewables Holdings, LLC and 1% owned by Reliant Energy Renewables Bluebonnet GP, LLC

-Reliant Energy Renewables Coastal Plains, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Renewable Holdings, LLC and 1% owned by Reliant Energy Coastal Plains GP, LLC

-Reliant Energy Renewables Comal County, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Renewables Holdings, LLC and 1% owned by Reliant Energy Renewables Comal County GP, LLC

-Reliant Energy Renewables Conroe, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Renewables Holdings, LLC and 1% owned by Reliant Energy Conroe, GP, LLC

-Reliant Energy Renewables Eastside, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Renewables Holdings, LLC and 1% owned by Reliant Energy Eastside GP, LLC

-Reliant Energy Renewables Hillside, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Renewables Holdings, LLC and 1% owned by Reliant Energy Renewables Eastside GP, LLC

-Reliant Energy Renewables Lacy Lakeview, LP, a limited partnership, is depicted as being 99% owned by Reliant Energy Renewable Holdings, LLC and 1% owned by Reliant Energy Renewables Lacy Lakeview GP, LLC

-Reliant Energy Renewables Pecan Praire, LP, a limited partnership, is depicted as being 99% owned by Reliant Energy Renewable Holdings, LLC and 1% owned by Reliant Energy Renewables Pecan Praire GP, LLC

-Reliant Energy Renewables Security, LP, a limited partnership, is depicted as being 99% owned by Reliant Energy Renewable Holdings, LLC and 1% owned by Reliant Energy Renewables Security GP, LLC

-Reliant Energy Renewables Temple, LP, a limited partnership, is depicted as being 99% owned by Reliant Energy Renewable Holdings, LLC and 1% owned by Reliant Energy Renewables Temple GP, LLC

-Reliant Energy Renewables Williamson County, LP, a limited partnership, is depicted as being 99% owned by Reliant Energy Renewable Holdings, LLC and 1% owned by Reliant Energy Renewables Williamson County GP, LLC

Reliant Energy Northeast Generation, Inc., a Delaware corporation, is depicted as being wholly-owned by Reliant Energy Northeast Holdings, Inc.

-Reliant Energy Atlantic, LLC, a Delaware limited liability company, Reliant Energy Erie West, LLC, a Delaware limited liability company, Reliant Energy Hunterstown, LLC, a Delaware limited liability company, Reliant Energy Portland, LLC, a Delaware limited liability company, Reliant Energy Seward, LLC, a Delaware limited liability company, and Reliant Energy Titis, LLC, a Delaware limited liability company, are depicted as being wholly-owned by Reliant Energy Mid-Atlantic Development, Inc.

-Reliant Energy Keystone Fuels, LLC and Reliant Energy Mid-Atlantic Power Holdings, LLC are depicted as being wholly-owned by Reliant Energy Northeast Generation, Inc.

-Reliant Energy Maryland Holdings, LLC, a Delaware limited liability company, Reliant Energy Mid-Atlantic Power Services, Inc., a Delaware corporation, Reliant Energy New Jersey Holdings, LLC, a Delaware limited liability company and Reliant Energy Northeast Management Company, a Pennsylvania company, are depicted as being wholly-owned by Reliant Energy Mid-Atlantic Power Holdings, LLC

-Reliant Energy McHenry Development Corp., a Delaware corporation, is depicted as being wholly-owned by Reliant Energy McHenry Holding Corp.

-Reliant Energy McHenry I, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy McHenry Holding Corp. and 1% owned by Reliant Energy McHenry Development Corp.

-Reliant Energy McHenry II, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy McHenry Holding Corp. and 1% owned by Reliant Energy Henry Development Corp.

-In addition, Reliant Energy McHenry County, LP, a limited partnership, is depicted as being 99% owned by Reliant Energy McHenry II, LP and 1% owned by Reliant Energy McHenry I, LP

-Reliant Energy Shelby Development Corp., a Delaware corporation, is depicted as being wholly-owned by Reliant Energy Shelby Holding Corp.

-Reliant Energy Shelby I, LP, a Delaware limited partner, is depicted as being 99% owned by Reliant Energy Shelby Holding Corp. and 1% owned by Reliant Energy Shelby Development Corp.

-Reliant Energy Shelby II, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Shelby Holding Corp. and 1% owned by Reliant Energy Shelby Development Corp.

-In addition, Reliant Energy Shelby County, LP and Reliant Energy Shelby County II, LP are both depicted as being 99% owned by Reliant Energy Shelby II, LP and 1% owned by Reliant Energy Shelby I, LP

-Reliant Energy Aurora Development Corp., a Delaware corporation, is depicted as being a wholly-owned subsidiary of Reliant Energy Aurora Holding Corp.

-Reliant Energy Aurora I, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Aurora Holding Corp. and 1% owned by Reliant Energy Aurora Development Corp.

-Reliant Energy Aurora II, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Aurora Holding Corp. and 1% owned by Reliant Energy Aurora Development Corp.

-In addition, Reliant Energy Aurora, LP, a Delaware limited partnership, is depicted as being 99% owned by Reliant Energy Aurora II, LP and 1% owned by Reliant Energy Aurora I, LP

-Reliant Energy Indian River, LLC, a Delaware limited liability company, and Reliant Energy Osceola, LLC, a Delaware limited liability company, are depicted as being wholly-owned by Reliant Energy Florida Holdings, LLC

-In addition, Reliant Energy Osceola, LLC, a Delaware limited liability company, is depicted as being 50% owned by Reliant Energy Osceola Holding Co. II, LLC and 50% owned by Reliant Energy Osceola Holding Co. I, LLC

-Reliant Energy Coolwater, LLC (EWG), a Delaware limited liability company, Reliant Energy Ellwood, LLC (EWG), a Delaware limited liability company, Reliant Energy Etiwanda, LLC (EWG), a limited liability company, Reliant Energy Mandalay, LLC (EWG), a limited liability company, and Reliant Energy Ormond Beach, LLC (EWG), a limited liability company are depicted as being wholly-owned by Reliant Energy California Holdings, LLC

-Reliant Energy Europe, Inc., a Netherlands entity, is depicted as being wholly-owned by Reliant Energy Capital (Europe), Inc.

-Reliant Energy Wholesale (Europe) Holdings B.V., a Netherlands entity, is depicted as being wholly-owned by Reliant Energy Wholesale (Europe) Holdings, BV

-Reliant Energy Wholesale (Europe) CV, a Netherlands entity, is depicted as being 99.5% owned by Reliant Energy Europe, Inc. and 0.5% owned by Reliant Energy Wholesale (Europe) Holdings BV

-In addition, Reliant Energy Wholesale (Europe) Holdings II CV, a Netherlands entity, is depicted as being 99.5% owned by Reliant Energy Europe, Inc. and 0.5% owned by Reliant Energy Wholesale (Europe) Holdings BV

-Reliant Energy UNA, BV, a Netherlands entity, is depicted as being 52% owned by Reliant Energy Wholesale (Europe) CV and 48% owned by Reliant Energy UNA, BV

-N.V. Una, a Netherlands entity, is depicted as being wholly-owned by Reliant Energy UNA, BV

EWG: Exempt Wholesale Generator under Energy Policy Act of 1992

Page A-18 contains the April 2001 organizational chart showing Reliant Energy, Incorporated, a Texas corporation, as the parent company of Reliant Energy International, Inc., a Delaware corporation, and the following entities depicted as wholly-owned subsidiaries of Reliant Energy International, Inc.:

-Reliant Energy Light Inc., a Delaware corporation
- -Reliant Energy Brazil Ventures Ltd.*, a Cayman Islands entity
- -Reliant Energy Brazil Tiete Ltd.*, a Cayman Islands entity
- -Reliant Energy Brazil Ltd.*, a Cayman Islands entity
- -Reliant Energy International Services, Inc., a Delaware corporation
- -Reliant Energy Salvador Holding Company Ltd., a Cayman Islands entity
- -Reliant Energy Holdings Ltd., a Cayman Islands entity
- -Reliant Energy Outsource Ltd.*, a Cayman Islands entity
- -Reliant Energy International Holdings, LLC, a Delaware limited liability partnership
- -Worldwide Electric Holdings B.V.*, a Netherlands entity
- -HI Energy Holdings I B.V.*, a Netherlands entity
- -Reliant Energy International II, Inc., a Delaware corporation

and

-Reliant Energy Santiago del Estero, S.A., an Argentine entity,⁽¹⁾ is depicted as being 99%owned by REII

-Empresa Distribuidora de Electricidad de Santiago del Estero S.A. (EDESE), an Argentine entity, is depicted as being 90% owned by Reliant Energy Santiago del Estero

-Reliant Energy Argentine Holdings Ltd. (FUCO), a Cayman Islands entity, and Reliant Energy Cayman Investments Ltd., a Cayman Islands entity, are depicted as being wholly-owned by Reliant Energy Cayman Holdings Ltd.

-Reliant Energy Argentina S.A. (EWG), an Argentine entity, is depicted as being 99% owned by Reliant Energy Cayman Holdings Ltd.

-Reliant Energy Argener S.A., an Argentine entity, is depicted as being 49% owned by Reliant Energy Argentine Holdings Ltd. and 51% owned by Reliant Energy Argentina S.A.

and

-Reliant Energy Opco S.A. (EWG), an Argentine entity, ⁽¹⁾ is depicted as being 99% owned by Reliant Energy Argentine S.A.

-Reliant Energy Cayman Holdings Ltd., a Cayman Islands entity, is depicted as being wholly-owned by Reliant Energy Light, Inc.

-Reliant Energy Cayman Acquisitions Ltd, a Cayman Islands entity, and Reliant Energy Cayman Ltd., a Cayman Islands entity, are depicted as being wholly-owned by Reliant Energy Cayman Investments Ltd.

-Reliant Energy Brasil, Ltda.*, a Brazilian entity, ⁽¹⁾ is depicted as being 99% owned by REII

-Reliant Energy International Brasil Ltda.*, a Brazilian entity, ⁽¹⁾ is depicted as being 99% owned by Reliant Energy Brazil Ltd.

-HIE Brazil Rio Sul Ltda.*, a Brazilian entity, is depicted as being 20% owned by Reliant Energy Brazil Ltd.

-Reliant Energy Columbia Ltd, a Columbian entity, is depicted as being 99% owned by REII and 1% by Reliant Energy International Holdings, LLC

-Reliant Energy El Salvador, S.A. de C.V., an El Salvadorian entity, is depicted as being 1% owned by REII and 99% owned by Reliant Energy International Holdings, LLC

-Venus Generation El Salvador*, a Cayman Islands entity, is depicted as being 50% owned by Reliant Energy Outsource Ltd.

-Reliant Energy India, Inc., a MAU entity, HIE Ford Heights, Inc., a Delaware corporation, and HIE Fulton, Inc., a Delaware corporation, are depicted as being wholly-owned by Reliant Energy International II, Inc.

-Reliant Energy Rain, Inc, a MAU entity, is depicted as being wholly-owned by Reliant Energy India, Inc.

and

-Rain Calcining Limited (FUCO), an Indian entity, is depicted as being 25% owned by Reliant Energy Rain, Inc.

Certain ownership amounts are rounded.
(1)	Law requires at least two shareholders of record; Reliant Energy International exercises beneficial ownership of all shares
*	Inactive
EWG:	Exempt Wholesale Generator under Energy Policy Act of 1992
FUCO:	Foreign Utility Company under Energy Policy Act of 1992
QF:	Qualifying Facility under Public Utility Regulatory Policies Act of 1978

EXHIBIT B
Settlement and Release of Claims Agreement

FERC REFUND ALLOCATION MATRIX

B-1

Exhibit B — FERC Refund Allocation Matrix

Allocation of Refunds from Reliant
Effective date distribution

	REFUND			Emissions				Gas Adder				TOTAL (A)		REFUNDS				Emissions				Gas Adder				TOTAL (B)			Pre October (C)				TOTAL (D) =
	Oct 2 - Jan 17			Oct 2 - Jan 17				Oct 2 - Jan 17				Oct 2 - Jan 17		Jan 18 - Jun 20				Jan 18 - Jun 20				Jan 18 - Jun 20				Jan 18 - Jun 20			May 1 - Oct 1 *				A+B+C
Pacific Gas and Electric Company		0.5820	136,188,975		0.4074	(4,860,732	)		0.4074	(19,881,691	)				—	—			—	—			—	—						0.3767	22,406,006
Southern California Edison Company		0.2522	59,002,172		0.3367	(4,016,794	)		0.3367	(16,429,780	)				—	—			—	—			—	—						0.3483	20,489,146
San Diego Gas & Electric		0.1171	27,397,212		0.0701	(836,124	)		0.0701	(3,419,969	)				—	—			—	—			—	—						0.0664	3,930,073
California Department of Water Resources — CERS		—	—		—	—			—	—					0.9594	37,335,918			0.8968	(2,397,900	)		0.8988	(12,600,600	)					—	—
Salt River Project		0.0188	4,360,679		0.0181	(216,107	)		0.0181	(883,938	)				—	—			0.0001	(367	)		0.0001	(1,961	)					0.0199	1,180,070
Aquita Power Corporation		0.0076	1,783,140		—	—			—	—					0.0007	25,297			—	—			—	—						—	—
Arizona Public Service Company		0.0058	1,346,022		0.0038	(45,664	)		0.0038	(186,780	)				—	—			0.0003	(911	)		0.0003	(4,925	)					0.0050	294,274
New Energy Inc.		0.0023	545,416		0.0054	(64,990	)		0.0054	(265,827	)				—	—			0.0015	(4,110	)		0.0015	(22,214	)					0.0164	971,440
COTP / COTB		0.0039	905,790		0.0441	(525,918	)		0.0441	(2,151,146	)				—	—			0.0347	(92,713	)		0.0347	(501,112	)					0.0436	2,582,178
Automated Power Exchange		0.0033	769,530		0.0060	(70,992	)		0.006	(290,378	)				—	—			0.0036	(9,637	)		0.0036	(52,066	)					0.0060	473,025
American Electric Power Service Corporation		0.0029	679,179		—	—			—	—					0.0013	50,638			—	—			—	—						—	—
California Polar Power Brokers LLC		0.0019	450,477		0.0007	(8,803	)		0.0007	(35,187	)				—	—			0.0000	(88	)		0.0000	(475	)					0.0008	44,961
City of Anaheim		—	—		0.0017	(20,257	)		0.0017	(82,858	)				—	—			0.0057	(15,150	)		0.0057	(81,884	)					0.0093	547,551
Enron Power Marketing, Inc (1)		—	—		0.0351	(418,321	)		0.0351	(1,711,045	)				0.0213	822,201			0.0141	(37,636	)		0.0141	(203,433	)					0.0308	1,824,795
City of Riverside		0.0004	90,254		0.0054	(64,392	)		0.0054	(263,379	)				—	—			0.0078	(21,136	)		0.0078	(114,239	)					0.0085	505,773
Minova Energy Partners, Inc		0.0010	240,190		0.0002	(2,956	)		0.0002	(12,092	)				0.0000	919			0.0000	—			0.0000	(3	)					0.0004	22,060
City of Pasadena		—	—		0.0007	(8,892	)		0.0007	(35,551	)				—	—			0.0024	(8,538	)		0.0024	(36,336	)					0.0043	252,544
Pacific Gas and Electric Energy Services Company		—	—		—	—			—	—					—	—			—	—			—	—						0.0025	147,206
Strategic Energy, LLC		0.0007	157,027		0.0007	(8,773	)		0.0007	(35,885	)				0.0000	934			0.0018	(4,738	)		0.0018	(25,611	)					0.0000	2,345
Sempra Energy Trading Corporation		—	—		—	—			—	—					—	—			—	—			—	—						0.0015	87,132
British Columbia Power Exchange Corporation		—	—		0.0057	(67,730	)		0.0057	(277,035	)				0.0039	149,150			0.0001	(286	)		0.0001	(1,548	)					0.0051	302,234
Sacramento Municipal Utility District		—	—		0.0008	(10,010	)		0.0008	(40,943	)				—	—			0.0000	(66	)		0.0000	(354	)					0.0020	116,516
MDAS INTERTIE ID		0.0002	43,856		—	—			—	—					—	—			—	—			—	—						—	—
El Paso Power Services Company		—	—		—	—			—	—					0.0021	81,374				—				—						—	—
City of Banning		0.0001	24,309		0.0004	(4,751	)		0.0004	(19,434	)				—	—			0.0006	(1,622	)		0.0006	(8,788	)					0.0006	37,159
City of Azusa		0.0000	6,295		0.001	(12,264	)		0.0010	(50,184	)				—	—			0.0011	(2,858	)		0.0011	(15,446	)					0.0011	65,509
Western Area Power Admin.-Redding		—	—		—	—			—	—					0.0004	16,368			0.0001	(324	)		0.0001	(1,751	)					—	—
City of Seattle, City Light Department		—	—		0.0004	(5,198	)		0.0004	(21,280	)				0.0001	3,505			0.0001	(170	)		0.0001	(918	)					0.0004	25,921
Louisville Gas and Electric Company		—	—		—	—			—	—					—	—			—	—			—	—						0.0000	1,449
Transalta Energy Marketing Inc.		—	—		—	—			—	—					0.0001	2,979			—	—			—	—						—	—
Reliant Energy Services, Inc.		—	—		0.0000	(1	)		0.0000	(2	)				—	—			0.0000	(1	)		0.0000	(4	)					0.0000	1,296
Puget Sound Energy		—	—		—	—			—	—					0.0000	524			—	—			—	—						—
PECO Energy Company		—	—		—	—			—	—					0.0000	292			—	—			—	—						—
Constellation Power Source Inc.		—	—		—	—			—	—					0.0000	172			—	—			—	—						—
City of Burbank, Public Service Department		—	—		—	—			—	—					0.0000	48			—	—			—	—						—
Turlock Irrigation District		—	—		—	—			—	—					0.0000	25			—	—			—	—						—
PP&L Montana		—	—		—	—			—	—					0.0000	9			—	—			—	—						—
Public Service Company of Colorado		—	—		—	—			—	—					0.0000	8			—	—			—	—						—
Public Service Company of New Mexico		—	—		—	—			—	—					0.0000	5			—	—			—	—						—
Arizona Electric Power		—	—		—	—			—	—					0.0000	4			—	—			—	—						—
Entergy-Koch Energy Trading, Inc.		—	—		—	—			—	—					0.0000	2			—	—			—	—						—
Calpine Energy Services, LP		—	—		—	—			—	—					—	—			0.0000	(26	)		0.0000	(138	)					—
Williams Energy Marketing and Trading		—	—		0.0000	(252	)		0.0000	(1,030	)				—	—			0.0000	(24	)		0.0000	(130	)					0.0000	627
Northern California Power Agency		—	—		0.0014	(16,297	)		0.0014	86,857					—	—			0.0015	(4,000	)		0.0015	(21,620	)					0.0013	77,544
PacifiCorp		—	—		0.0010	(12,151	)		0.0010	(49,702	)				—	—			0.0002	(508	)		0.0002	(2,745	)					0.0009	52,838
Coral Power, LLC		—	—		0.0009	(11,152	)		0.0009	(45,814	)				—	—			0.0014	(3,627	)		0.0014	(19,603	)					0.0009	53,446
City of Vernon		—	—		0.0052	(62,128	)		0.0052	(254,113	)				—	—			0.0058	(14,921	)		0.0058	(80,880	)					0.0050	293,973
Idaho Power Company		—	—		0.0009	(10,401	)		0.0009	(42,545	)				0.0006	23,618			0.0004	(1,035	)		0.0004	(5,597	)					0.0005	29,958
Dynegy Power Marketing, Inc.		—	—		0.0018	(21,283	)		0.0018	(87,052	)				—	—			0.0009	(2,489	)		0.0009	(13,340	)					0.0015	88,823
Western Area Power Administration (WAPA/WAMP)		—	—		0.0051	(61,218	)		0.0051	(250,399	)				—	—			0.0060	(16,089	)		0.0060	(86,854	)					0.0040	236,368
California Department of Water Resources — (SWP)		—	—		0.0391	(466,254	)		0.0391	(1,907,103	)				—	—			0.0131	(34,957	)		0.0131	(188,943	)					0.0341	2,019,960
LESS: Enron Power Marketing, Inc. allocation 1																(822,201	)										(822,291	)			(1,824,795	)		(2,846,986	)
Net Total Allocated Refund of Refund			233,990,533			(11,930,403	)			(48,796,536	)		173,261,595			37,691,774				(2,872,883	)			(14,452,310	)		20,565,576				57,339,205			251,186,376

1. Enron’s share of 2,646,996 is moved to California Parties account and not included in Net Total Allocated Refunds.

2. Additional relief of $259 million cash will be allocated to California Parties and is not reflected in this matrix.

3. Oct 2 — Jan 17 Refunds’ include PX DA/DO Refunds through January 31, 2001.

4. A participant who owes to the market refunds or payables according to Exhibits ISO-30 and CPX-51 in the EL 00-95 (phase II) proceeding shall receive a deemed distribution by off-set of the payables or refunds it is determined to owe to the ISO and/or PX.

5. The allocation of gas and emission adders will be subject to true up based on a final order on rehearing or appeal regarding the allocation of such costs. Participants who owe gas or emissions adders that exceed their refunds will not be required to pay such excess until the date FERC requires participants to pay gas and emissions in the Refund Proceeding.

6. SCE and SDG&E shares in the refund period (October 2, 200 to January 17, 2001) require the adjustment for SDG&E’s 20% ownership of SONGS (2.35% increase in SCE’s share and 2.35% decreases in SDG&E’s share) through the Cal Parties Refund Escrow instructions. This results in an adjustment of $5,496,778 which SCE’s share is increased to $64,643,185 and SDG&E’s share is decreased to $21,572,341 at Column AG.

7. Allocation percentages rounded to four decimal (for display purposes only).

B-2

EXHIBIT C
Settlement and Release of Claims Agreement

DEEMED DISTRIBUTION PARTICIPANTS

Pacific Gas and Electric Company
British Columbia Power Exchange Corporation
Sempra Energy Trading Corporation
Puget Sound Energy
El Paso Power Services Company
Idaho Power Company
City of Pasadena
Transalta Energy Marketing Inc.
Constellation Power Source Inc.
Automated Power Exchange
PECO Energy Company
Western Area Power Admin.-Redding

C-1

EXHIBIT D
Settlement and Release of Claims Agreement

LOCAL GOVERNMENTAL PARTIES’ ALLOCATION MATRIX

The City and County of San Francisco	$	666,666.00
The City of Oakland;	$	666,667.00
The County of Santa Clara	$	666,667.00
The County of Contra Costa;	$	666,667.00
Valley Center Municipal Water District	$	245,673.12
Padre Dam Municipal Water District	$	126,007.28
Ramona Municipal Water District	$	164,702.82
Helix Water District	$	105,115.07
Vista Irrigation District	$	48,175.90
Yuima Municipal Water District	$	81,285.11
Fallbrook Public Utility District	$	46,187.56
Borrego Water District	$	34,762.60
Metropolitan Transit Development Board	$	—
San Diego Trolley, Inc.	$	—
San Diego Transit Corporation	$	—
Sweetwater Authority	$	81,423.54
Total	$	3,600,000.00

D-1

EXHIBIT E
Settlement and Release of Claims Agreement

NOTICE REQUIREMENTS

INDIVIDUALS AND ADDRESSES FOR NOTICE

(See Section 15.1)

If to the Reliant Parties:

Michael L. Jines
Senior Vice President, General Counsel and Corporate Secretary
Reliant Energy, Inc.
12th Floor
1000 Main Street
Houston, TX 77002
Telephone: (713) 497-7465
Facsimile: (713) 497-0116
E-Mail: mjines@reliant.com

With a copy to:

Jerry J. Langdon
Executive Vice President, Public & Regulatory Affairs
and Corporate Compliance Officer
Reliant Energy, Inc.
1000 Main Street
Houston, TX 77002
Telephone: (713) 497-3014
Facsimile: (713) 497-9131
E-Mail: jlangdon@reliant.com

If to OMOI:

Robert Pease
Office of Market Oversight and Investigations
Federal Energy Regulatory Commission
888 1st Street, NE
Washington, DC 20426
Telephone: (202) 502-8131
Facsimile: (202) 208-0057
E-Mail: Robert.Pease@ferc.gov

With a copy to:

Lee Ann Watson
Office of Market Oversight and Investigations
Federal Energy Regulatory Commission
888 1st Street, NE
Washington, DC 20426
Telephone: (202) 502-6317
Facsimile: (202) 208-0057
E-Mail: LeeAnn.Watson@ferc.gov

E-1

If to PG&E:

Joshua Bar-Lev
Physical address:
PG&E Legal Department
77 Beale Street
San Francisco, CA 94120
Mailing address:
Mail Code B30A
P.O. Box 7442
San Francisco, CA 94120-7442
Telephone: 415 973-4507
Facsimile: (415) 973-5520
E-Mail: jxb7@pge.com

With a copy to:

Stan Berman
Heller Ehrman LLP
701 Fifth Avenue, Suite 6100
Seattte, WA 98104-7098
Telephone: (206) 389-4276
Facsimile: (206) 515-8927
E-Mail: sberman@hewm.com

If to SCE:

Russell Swartz
Southern California Edison Company
2244 Walnut Grove Avenue
Rosemead, CA 91770
Telephone: (626) 302-3925
Facsimile: (626) 302-1904
E-Mail: russell.swartz@sce.com

With a copy to:

Richard Roberts
Steptoe & Johnson LLP
1330 Connecticut Avenue, N.W.
Washington, DC 20036-1795
Telephone: (202) 429-6756
Facsimile: (202) 429-3902
E-Mail: rroberts@steptoe.com

If to SDG&E:

Don Garber
San Diego Gas & Electric Company
101 Ash Street
San Diego, CA 92101-3017
Telephone: (619) 699-5027
Facsimile: (619) 696-4539
E-Mail: dgarber@sempra.com

E-2

If to California Attorney General:

Ken Alex
Supervising Deputy Attorney General
Attorney General’s Office
California Department of Justice
P.O. Box 70550
1515 Clay St., 20th Fl.
Oakland, CA 94612-0550
Telephone: (510) 622-2137
Facsimile: (510) 622- 2270
E-Mail: ken.alex@doj.ca.gov

if to CERS:

Peter S. Garris
Deputy Director
California Department of Energy Resources Scheduling
3310 El Camino Avenue, Suite 120
Sacramento, CA 95821
Telephone: (916) 574-2733
Facsimile: (916) 574-0301
E-Mail: pgarris@water.ca.gov

With a copy to:

Nancy Saracino
Office of the Chief Counsel
1416 Ninth Street, Room 1118
Sacramento, CA 95814
Telephone: (916) 653-7084
Facsimile: (916) 654-9822
E-Mail: nsaracin@water.ca.gov

If to CEOB:

Erik Saltmarsh
California Electricity Oversight Board
770 L Street, Suite 1250
Sacramento, CA 95814
Telephone: (916) 322-8601
Facsimile: (916) 322-8591
E-Mail: esaltmarsh@eob.ca.gov

If to CPUC:

Elizabeth McQuillan
California Public Utilities Commission
Legal Division, Room 4107-12
505 Van Ness Avenue
San Francisco, CA 94102
Telephone: (415) 703-1471
Facsimile: (415) 703-2262
E-Mail: emm@cpuc.ca.gov

E-3

If to Oregon Attorney General:

Caren Rovics
Senior Assistant Attorney General
Oregon Department of Justice
1162 Court Street NE
Salem, OR 97310-4096
Telephone: (503) 947-4333
Facsimile: (503) 378-5017
E-Mail: caren.rovics@doj.state.or.us

If to Washington Attorney General:

Brady R. Johnson, Assistant Attorney General
Office of the Washington Attorney General
900 Fourth Avenue, Suite 2000 TB14
Seattle, WA 98164
Telephone: (206) 389-2848
Facsimile: (206) 587-5636
E-Mail: BradyJ@ATG.WA.GOV

If to the California Class::

Frank J. Janecek
Lerach Coughlin Stoia Geller Rudman & Robbins LLP
655 West Broadway, Suite 1900
San Diego, CA 92101-3301
Telephone: (619) 231-1058
Facsimile: (619) 231-7423
E-Mail: FRANKJ@lerachlaw.com

If to Egger Class:

Matthew J. Zevin
Stanley, Mandel & Iola, L.L.P.
550 West C Street, Suite 1600
San Diego, California 92101
Telephone: (619) 235-5306
Facsimile: (815) 377-8419
E-Mail: mzevin@smi-law.com

If to the Local Governmental Parties:

Frank J. Janecek
Lerach Coughlin Stoia Geller Rudman & Robins LLP
655 West Broadway, Suite 1900
San Diego, CA 92101-3301
Telephone: (619) 231-1058
Facsimile: (619) 231-7423
E-Mail: FRANKJ@lerachlaw.com

E-4

EXHIBIT F
Settlement and Release of Claims Agreement

FORM OF NOTICE OF ELECTION TO PARTICIPATE IN SETTLEMENT

[CAPTION]

NOTICE OF ELECTION

TO PARTICIPATE IN

SETTLEMENT

     Pursuant to Section 9.1 of the Settlement and Release of Claims Agreement (the “Agreement”) dated October ___, 2005 by and among the Reliant Parties, OMOI, the California Parties, the Additional claimants,¹ and others,                                                              hereby gives notice that it elects to become an Opt-In Participant.                                                              states that it is a Market Participant and acknowledges that, by such election, it will have the applicable rights and obligations under the Agreement as an Opt-In Participant, but shall not be a Party or a Settling Claimant.

     Electronic copies of this notice are being served on each person designated on (i) the ListServ established for FERC Docket Nos. EL00-95, et al. and (ii) the ListServ established for FERC Docket Nos. EL03-180, et al.

Respectfully submitted,

¹ Capitalized terms in this notice have the meaning provided in the Agreement.

F-1

CERTIFICATE OF SERVICE

     I hereby certify that I have this day served an electronic copy of the foregoing document upon each person designated on the ListServs established in Docket Nos. EL00-95, et al., EL03-137, et al., and EL03-180, et al., and served a paper copy via first class mail upon each person designated on the official service list compiled by the Secretary in Docket No. EL03-59.

     Dated at Washington, D.C. this 14^th day of October, 2005.

/s/ Joseph E. Stubbs  

Joseph E. Stubbs 

Steptoe & Johnson LLP
1330 Connecticut Avenue, N.W.
Washington, D.C. 20036
(202) 429-6463 

F-2

EXHIBIT G
Settlement and Release of Claims Agreement

RELIANT CORPORATE CREDIT AND DEBT AGREEMENTS REFERENCED IN
SECTION 11.4.2

• Two Indentures dated as of July 1, 2003 among Reliant Energy, Inc., a Delaware corporation (the “Company”), the Guarantors and Wilmington Trust Company, as Trustee, and the First Supplemental Indenture, dated as of December 22, 2004, among the Company, the Guarantors and Wilmington Trust Company, as trustee

• Second Amended and Restated Credit and Guaranty Agreement, dated as of December 22, 2004, by and among Reliant Energy, Inc., (the “Company”) and the other Loan parties referred to therein; the Lenders referred to therein; Bank of America, N.A., as Administrative Agent and as Collateral Agent; Barclays Bank, PLC and Deutsche Bank Securities Inc., as syndication agents for the Lenders; and Goldman Sachs Credit Partners L.P. and Merrill Lynch Capital Corporation, as documentation agents for the Lenders

• Guarantees issued by Reliant Energy, Inc. of Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Bonds (Reliant Energy Seward, LLC Project)

• Credit and Guaranty Agreement dated as of October [7], 2005, by and among Reliant Energy, Inc., (the “Company”) and other Loan parties referred to therein; the Lenders referred to therein, and Deutsche Bank AG, New York Branch, as Administrative Agent.

• Note that all of the above are covered by a single Security Agreement dated as of July 1, 2003, as amended, and are subject to a Collateral Trust Agreement dated as of July 1, 2003

G-1

EXHIBIT H
Settlement and Release of Claims Agreement

LETTER AGREEMENT REGARDING REPAYMENT OF CLASS ACTION
ATTORNEYS’ FEES

The law firm of                      agrees to repay $                     in fees, and $                     in costs if the attorneys’ fee and cost order dated                      in [case name] is reduced (to the extent of any such reduction) or overturned on appeal within ten calendar days of the order on appeal. This law firm also agrees to be subject to the jurisdiction of the San Diego Superior Court in this matter and agrees that failure to repay fees and costs may be enforced by motion. I am authorized to sign this agreement on behalf of the principals (partners, shareholders, etc.) of the above-named law firm.

[name]

H-1

EX-10.68

Exhibit 10.68B

RRI Long-Term Incentive Plan 2004 - 2006 Cycle Supplement to Define RRI Long-Term Performance Metrics 21145 ©2004 Reliant Resources Proprietary and Confidential Information

RRI Long-Term Incentive Plan (2004-2006) Deliver Superior Customer Value Defend Houston mass market customer base Residential market share (customers) Number of ESIID's flowing power as a % of the total market ESIID's available. Small C&I market share (volume) Annualized volume as a % of the total market volume available. Retain/grow rest of ERCOT customer base Residential # of customers Total number of new customer enrollments during each quarter excludes TX Star. Residential cost to acquire ($/customer) Total acquisition marketing dollars (including sign up incentives) divided by total # of customers acquired. Residential monthly attrition The % of flowing ESIID's lost on a monthly basis. Total ERCOT market share Number of ESIID's flowing power as a % of the total market ESIID's available. Small C&I total signed annualized volume (mWh) Total amount of new load enrollments during each quarter. Large C&I market share (volume) - ERCOT only Annualized volume as a % of the total market volume available. Large C&I gross margin ($/mWh) - ERCOT Weighted average # of deals signed during the quarter. Large C&I gross margin ($/mWh) - PJM Weighted average # of deals signed during the quarter. Build brand value and customer reputation Customer satisfaction (Houston) A high level satisfaction metric. Respondents indicating that they are very satisfied or somewhat satisfied with Reliant Energy as their provider. Customer satisfaction (non Houston) Customer service satisfaction Brand awareness - TXU Respondents indicating some degree of familiarity with Reliant Energy to aided and unaided survey questions. Brand awareness - CPL Respondents indicating some degree of familiarity with Reliant Energy to aided and unaided survey questions. Brand consideration - TXU Respondents indicating they would consider Reliant over other major competitors. Brand consideration - CPL Respondents indicating they would consider Reliant over other major competitors. Align generation assets to direct customers Total mWh hedged through non-OTC transactions % Originated transaction mWh sold over total portfolio mWhs generated. Gross margin ($/mWh) Weighted average # of deals signed during the quarter. Metric was not maintained in 2003. Operate assets effectively Plant availability % One less (planned and unplanned outage hours over 8,760 hours). Equivalent forced outage rate % (EFOR %) Unplanned outage hours over (service hours plus unplanned outage hours). Plant O&M plus maintenance and environmental CAPEX Average hedge duration Total mWh hedged over average monthly portfolio production. ©2004 Reliant Resources Proprietary and Confidential Information

RRI Long-Term Incentive Plan (2004-2006) Achieve Financial Flexibility Strong balance sheet Adjusted net debt / EBITDA Adjusted net debt is debt less cash and cash equivalent, plus off balance sheet debt. Implied corporate rating (Moodys/S&P/Fitch) Strong operating profile EPS - adjusted ($/diluted share) Adjusted for special items as defined for SEC reporting purposes. Total operating costs ($MM) O&M, bad debt, selling & marketing, G&A, taxes other than income. Operating cash flows, net of capital expenditures ($MM) Outstanding reputation P/E and EV/Adjusted EBITDA Bond spread Analyst coverage and rating Rating scale: 1 = strong; 3 = hold; 5 = strong sell # of top 50 institutions holding RRI stock ©2004 Reliant Resources Proprietary and Confidential Information

RRI Long-Term Incentive Plan (2004-2006) Build a Great Company to Work For Living the Reliant values How we act How we work How we create value Outstanding organizational performance Organizational alignment with vision and strategic goals Employee motivation High company pride Individual pride Institutional pride Online annual employee survey with results and analysis performed by outside vendor. Select vendor by end of Q2 2004, initiate survey by end of Q3 2004. Survey designed to measure: Living the Reliant values Achievement of outstanding organization performance Employee pride Employee view of company reputation Metrics needed for compliance with annual survey required by the Office of Ethics and Compliance charter (separately reported results) Establish baseline metrics based on survey responses from 2004. Metrics include internal benchmark, and comparison to representative normative external data from vendor database. ©2004 Reliant Resources Proprietary and Confidential Information

RRI Long-Term Incentive Plan (2004-2006) Build a Great Company to Work For (Continue) Providing Safe Work Place Safety performance index Total case incident rate (TCIR) Environmental performance index weighting of various safety goals set individually by the East and West regions. Scoring is based on a "threshold" (50 points), "goal" (100 points) and "maximum" (150 points), with a proration between the "threshold" and "maximum" points based on actual performance rate reflecting total number of recordable non-fatal injuries and illnesses per 100 full-time workers that a site has experienced in a given time frame measure of environmental compliance with scoring based on a "threshold" (50 points), "goal" (100 points) and "maximum" (150 points). Points are deducted from the "maximum" score for items such as wastewater permit violations, air permit violations, uncollected environmental data, oil or chemical spills, poor housekeeping or agency enforcement activity ©2004 Reliant Resources Proprietary and Confidential Information

RRI Long-Term Incentive Plan (2004-2006) Build a Great Company to Work For (Continue) Company reputation Community Investors: GMI (Governance Metrics International) ISS (Industrial Shareholder Services) Regulators/Legislators Compliance Legal Regulatory Considering incorporation into ongoing marketing survey. GMI scale: 1.0 = lowest; 10 = highest Index ranking represents the % of companies in the Russell 3,000 Index that RRI outperformed, updated annually. Industry ranking represents the % of the companies in the utilities group that RRI outperformed, updated annually. Number of formal formal complaints filed; stated goals for regulatory milestones (I.e. claw back; refund cases, etc.; success in intervening in legislative efforts. Based on complaints filed by or other actions taken by regulators, permit violations and agency findings of noncompliance. Statistical data on the number of requests, timelines on meeting such requests and the number of documents provided. ©2004 Reliant Resources Proprietary and Confidential Information

EX-10.99

Exhibit 10.99

NON-EMPLOYEE DIRECTORS’ COMPENSATION PROGRAM
Effective January 1, 2010

Purpose: This document sets forth the compensation program for non-employee members (“Directors”) of the Board of Directors (“Board”) of RRI Energy, Inc. (the “Company”). Employee members of the Board do not participate in this program or otherwise earn compensation for their service on the Board.

Principles:

• Total compensation is reviewed annually and compared to independent market data

• In general, the intent is to target between the 50^th and 75^th percentile of relevant market data.

• The targeted pay mix is approximately 50% cash and 50% equity, before considering cash retainers for Committee Chairmen and the additional cash retainer for the Chairman.

Cash Compensation:

Annual Retainers

• Chairman: $185,000.

• Directors other than the Chairman: $85,000.

• Committee Chairperson Additional Retainer: $7,500.

Fees for Meeting Attendance

• If the total number of Board and Committee meetings attended exceeds 25 in a calendar year, Directors will receive an additional $2,000 meeting fee for each meeting attended over 25.

Deferral Option

• Directors may elect to defer part or all of their cash retainers under the RRI Energy, Inc. Deferral and Restoration Plan. Elections to defer cash retainers must be made annually (on a form prepared by the Company) before the end of the calendar year prior to the calendar year in which the fees are earned (or for initial eligibility to participate in the plan, within 30 days of becoming a Director). An election to defer payment of cash retainer is irrevocable and cannot be changed.

Equity Compensation:

• Initial grant upon appointment or election to the Board: Restricted Stock Units (“RSUs”) valued at $75,000 (based on the fair market value of Company stock on the grant date).

• Annual grant: RSUs valued at $90,000 (based on the fair market value of Company stock on the grant date).

• All RSUs will be granted pursuant to the terms and conditions of the RRI Energy, Inc. 2002 Long Term Incentive Plan.

• The RSUs will be fully vested upon grant and will be paid in shares of Company stock as soon as practicable after the Director leaves the Board; provided, however, that

1

Directors may elect to defer payment of part or all of the RSUs to a later date. Elections to defer payment must be made annually (on a form prepared by the Company) before the end of the calendar year prior to the calendar year in which the services are provided by the Director for which the RSUs are earned and granted (or for initial eligibility to participate, within 30 days of becoming a Director). An election to defer payment of RSUs is irrevocable and cannot be changed.

• Directors may also elect (on a form prepared by the Company) before the end of the calendar year prior to the calendar year in which the RSUs are granted (or for initial eligibility, within 30 days of becoming a director) to have up to one-third of the RSUs paid in cash rather than stock (based on fair market value of the stock as of the payment date).

Administrative:

• Annual cash retainers will be paid (unless deferred) in four equal installments with each installment paid following the end of each calendar quarter in which they are earned.

• Meeting fees, if any, will be paid following the end of the calendar quarter in which they are earned.

• The annual grant of RSUs will be made as of the date of the annual shareholders’ meeting for services to be provided as a Board member during the next 12 months following the date of the shareholders’ meeting.

• New directors appointed to the Board between annual shareholders’ meetings will receive a pro rata annual grant.

2

2010 RESTRICTED STOCK UNITS
DIRECTORS’ DEFERRAL ELECTION FORM
(see 2010 Cash Retainers Directors Deferral Election Form
for election to defer cash retainers)

DEFERRALS:

Directors’ annual grants of Restricted Stock Units (“RSUs”) are vested upon the date of grant but are not paid (and shares issued) until Directors leave the Board. Directors may elect to defer payment of all or a portion of the RSUs to a date later than the date they leave the Board. An election to defer will apply to both the RSUs and cash settlement amounts, if any. Elections to defer RSUs granted for the 2010 calendar year must be made by completing this form and returning it to Allison Cunningham in the enclosed self-addressed envelope on or before December 31, 2009. An election to defer payment of RSUs granted in 2010 beyond the date when you leave the Board is irrevocable and cannot be changed.

DISTRIBUTION:

You may elect to have your RSUs distributed (1) in a lump sum in any one of the first five calendar years following the calendar year during which you cease to be a Director or (2) in five annual installments commencing in the calendar year following the calendar year during which you cease to be a Director. For example, you could elect to have your deferred RSUs pay out in a lump sum two years after the year you leave the Board or you could elect five annual installments beginning in the year following the year you leave the Board. If you do not make a valid election, your RSUs will be paid to you in a lump sum within 90 days after you cease to be a Director.

ACCOUNT:

Until the payment date, your RSUs will be reflected by a credit to a bookkeeping account evidencing the unfunded and unsecured right to receive the RSUs.

CASH SETTLEMENT:

You may also elect to have up to one-third of your RSUs paid in cash rather than stock (based on the fair market value of the stock as of the payment date), regardless of whether you make an election to defer payment of RSUs to a date after you leave the Board. Elections to receive a cash settlement must be made by completing this form and returning it to Donna Hashaw in the enclosed self-addressed envelope before December 31, 2009. An election to receive a cash settlement is irrevocable and cannot be charged.

PART A
ELECTIONS (select one)

No RSU deferral/No cash settlement — I elect not to defer payment of my RSUs beyond the time when I leave the Board and I elect not to receive cash settlement of any RSUs. My RSUs will be paid in shares of Company common stock within 90 days following the date I cease to be a Director (“Normal Payment Date”).

No RSU deferral/With cash settlement — I elect not to defer payment of my RSUs beyond the time I leave the Board and I elect to receive a portion (not to exceed 33%) of my RSUs as a cash settlement. My RSUs will be paid in a combination of shares of Company common stock and cash on the Normal Payment Date (Complete Part B below for percentage of RSUs to be paid in cash.)

1

2010 RSU Directors’ Deferral Election Form
Page 2

RSU deferral/No cash settlement — I elect to defer payment of all or a portion of my RSUs beyond the time I leave the Board and I elect not to receive cash settlement of any RSUs. The deferred portion of my RSUs will be paid in shares of Company common stock on the date(s) selected by me (with the remaining portion of my RSUs (if any) paid on the Normal Payment Date). This election is irrevocable and cannot be changed. (Complete Part C below to defer payment of RSUs.)

RSU deferral/With cash settlement — I elect to defer payment of all or a portion of my RSUs beyond the time when I leave the Board and I elect to receive a portion (not to exceed one-third) of my RSUs as a cash settlement. The deferred portion of my RSUs will be paid in the same combination of shares of Company common stock and cash as the remaining portion on the date(s) elected by me (with the remaining portion of my RSUs (if any) paid on the Normal Payment Date). This election is irrevocable and cannot be changed. (Complete Parts B and C for percentage of RSUs to be paid in cash and to defer payment of my RSUs.)

PART B
CASH SETTLEMENT

I elect to receive cash settlement of a portion of my RSUs not to exceed 33% (enter 1% to 33% in whole percentages).

Percentage                   %  

PART C
RSU DEFERRAL ELECTION

DEFERRAL PERCENTAGES — Percentage of RSUs to be paid out on a date later than the Normal Payment Date (enter 1% to 100% (in whole percentages)) (if less than 100%, the remainder will be paid out on the Normal Payment Date)

Percentage                   %  

FORM OF DISTRIBUTION — You may elect to receive the deferred percentage of your RSUs elected above in the form of a lump sum or five annual installments (check one). If you elect annual installment payments, your payments will commence as soon as practicable after June 30 (but in no event later than December 31) of the calendar year following the calendar year during which you cease to be a Director.

Lump sum                     
Five Annual Installments                     

DISTRIBUTION YEAR — If you elected to receive the deferred percentage of your RSUs in a lump sum, then you must specify the calendar year during which the lump sum payment will be made. This may be the first, second, third, fourth or fifth year following the year during which you cease to be a Director. Payment will be made as soon as administratively practicable after June 30 (but in no event later than December 31) of the calendar year selected.

Enter 1^st, 2^nd, 3^rd, 4^th or 5^th year

Year of distribution                     

Please return your completed election form on or before December 31, 2009 to Allison Cunningham in the enclosed envelope.

Signature:                                        

Date:                                        

2

2010 CASH RETAINERS
DIRECTORS’ DEFERRAL ELECTION FORM
(See 2010 Restricted Stock Units Directors’ Deferral Election Form
for elections to defer equity awards)

Board members may elect to defer all or a portion of their cash retainers under the RRI Energy, Inc. Deferral and Restoration Plan (“Deferral Plan”). Elections to defer cash for the 2010 calendar year must be made by completing this form and returning it to Allison Cunningham in the enclosed self-addressed envelope on or before December 31, 2009. If the form is not received by that date you will not be able to defer any cash retainers for 2010. The election to defer 2010 cash retainers is irrevocable and cannot be changed. Cash meeting fees, if any, are not subject to deferral.

DEFERRALS:

• You may defer up to 100 percent of your 2010 cash retainers.

• The percentage you elect will remain the same for the entire 2010 calendar year.

DISTRIBUTIONS:

• You will be able to choose a distribution option for each calendar year for which you elect to defer cash compensation.

• You may elect to have your account balance for each deferral year distributed as a lump sum or as five annual installments.

• As long as you are still a Board member, distributions of cash deferrals cannot be made for at least three years after the deferral year. For example, the earliest you may elect to receive distribution of 2010 cash deferrals would be 2014. Distribution would be made as soon as administratively practicable after June 30 of the distribution year elected (but in no event later than December 31st of the distribution year).

• Upon leaving the Board, your cash account balance will be paid to you as a lump sum within 90 days after a period of six months following the date you cease to be a Board member (regardless of your elected distribution option).

INVESTMENT OPTIONS:

• You must direct the deemed investment of your deferrals into one or more of the investment funds listed on Part C of this form.

• You may change your deemed investments or change the investment allocation of your current deferrals on a daily basis.

• To handle your deemed investments, you can go to www.vanguard.com. You must register for online access to your account. The plan number is 072562. You can also call Vanguard 24 hours a day at 1-800-523-1188 and use the automated system or speak to a Vanguard Participant Services Associate.

Deferrals under the program represent an unfunded promise to pay. Assets are not protected in the event of bankruptcy or insolvency and are subject to the claims of the Company’s creditors. If you elect to participate, your deferral elections are irrevocable.

The above is a summary of some of the provisions of the RRI Energy, Inc. Deferral and Restoration Plan, Deferred Compensation Program. If there is a conflict between this summary and the plan document, the plan document governs. RRI Energy, Inc., reserves the right to amend or terminate the Deferral Plan from time to time and at any time at its discretion.

1

2010 Cash Directors’ Deferral Election Form
Page 2

PART A
DEFERRAL ELECTION (select one)

I elect not to defer any of my 2010 cash retainers. (No further action needed.)

I elect to defer all or a portion of my 2010 cash retainers. This election is irrevocable and cannot be changed.
(You must complete Parts B and C)

PART B
CASH DEFERRAL ELECTION

1. RETAINER DEFERRAL PERCENTAGE (1% to 100%)

Percentage                     

2.	FORM OF PAYMENT (complete both below)
	DISTRIBUTION PAYMENTS — You may elect to receive your deferred cash as a lump sum or as five annual installments.

Lump Sum                     
Five Annual Installments                     

DISTRIBUTION YEAR — You may elect to receive your lump sum distribution or have your installment payments begin during any year after 2013. Please enter the calendar year you elect for your lump sum payment or for your installment payments to commence.

Year                     

2

2010 Cash Directors’ Deferral Election Form
Page 3

PART C
CASH RETAINERS INVESTMENT OPTIONS

Your deferrals may be allocated among one or more of the following fund options. Allocations must be in increments of 1% and the total percentages must add up to 100%. You can obtain information on the funds by logging on to www.vanguard.com. You can also call 1-800-523-1188. You will need the plan number which is 072562. Please elect your Investment Allocation percentages below:

	Allocation
		%
TARGET RETIREMENT FUNDS
Vanguard Target Retirement 2050 Fund
Vanguard Target Retirement 2045 Fund
Vanguard Target Retirement 2040 Fund
Vanguard Target Retirement 2035 Fund
Vanguard Target Retirement 2030 Fund
Vanguard Target Retirement 2025 Fund
Vanguard Target Retirement 2020 Fund
Vanguard Target Retirement 2015 Fund
Vanguard Target Retirement 2010 Fund
Vanguard Target Retirement 2005 Fund
Vanguard Target Retirement Income Fund
LIFESTRATEGY® FUNDS
Vanguard LifeStrategy Conservative Growth Fund
Vanguard LifeStrategy Moderate Growth Fund
Vanguard LifeStrategy Growth Fund
CORE FUNDS
Vanguard Prime Money Market Fund
PIMCO Total Return Fund—Administrative Class
Vanguard Total Bond Market Index Fund
Vanguard Inflation-Protected Securities Fund
T. Rowe Price Equity Income Fund—Advisor Class
Vanguard Windsor™ II Fund
Vanguard 500 Index Fund
Vanguard Total Stock Market Index Fund
Davis New York Venture Fund—Class A
American Funds Growth Fund of America— Class A
Vanguard Dividend Growth Fund
Vanguard Growth Equity Fund
Neuberger Berman Genesis Fund—Trust Class
Turner Small Cap Growth Fund—Class I
American Funds New Perspective Fund— Class A
Artisan International Fund—Investor Class
American Funds EuroPacific Growth Fund—Class A
Vanguard Total international Stock I Index Fund

Please return your completed election form on or before December 31, 2009 to Allison Cunningham in the enclosed envelope.

Signature 

Date 

Vanguard, LifeStrategy, Windsor, and VOICE are trademarks of The Vanguard Group, Inc. All other marks are the exclusive property of their respective owners.

3

EX-10.100

Exhibit 10.100

RRI ENERGY, INC.
2002 LONG TERM INCENTIVE PLAN
RESTRICTED STOCK UNIT AWARD AGREEMENT

     Pursuant to this award agreement (the “Agreement”), as of ______, 2009, RRI Energy, Inc.(the “Company”) hereby grants to «LEGAL» (the “Director”), «stock_units» Restricted Stock Units. The number of units is subject to adjustment as provided in Section 15 of the RRI Energy, Inc. 2002 Long Term Incentive Plan (the “Plan”), subject to the terms, conditions and restrictions described in the Plan and in this Agreement.

1. Relationship to the Plan; Definitions.

(a)	This grant of Restricted Stock Units is subject to all of the terms, conditions and provisions of the Plan and administrative interpretations thereunder, if any, which have been adopted by the Committee and are in effect on this date. If any provision of this Agreement conflicts with the express terms of the Plan, the terms of the Plan control and, if necessary, the applicable provisions of this Agreement are deemed amended so as to carry out the purpose and intent of the Plan. References to the Director also include the heirs or other legal representatives of the Director or the Director’s estate.
(b)	Except as defined herein, capitalized terms have the same meanings as under the Plan.
	“Restricted Stock Units” means a Stock Award in units denominated in shares of Common Stock.

2.	Account. This grant of Restricted Stock Units will be implemented by a credit to a bookkeeping account maintained by the Company evidencing the accrual in favor of the Director of the unfunded and unsecured right to receive the Restricted Stock Units granted.
3.	Vesting and Forfeiture. The Restricted Stock Units vest upon grant.
4.	Payment of Restricted Stock Units.

(a)	Unless otherwise provided in subsections (b) and (c) below, within 90 days after the date the Director terminates service as a member of the Board, a number of shares of Common Stock equal to the number of vested Restricted Stock Units will be registered in the Director’s name with the Company’s transfer agent.
(b)	Subsection (a) notwithstanding, prior to or as of December 31st of the calendar year ending prior to the calendar year during which the Director’s services commence for which this Award is granted, the Director may

1

irrevocably elect to have all or a portion of the Restricted Stock Units subject to this Agreement:

(i)	paid in five (5) substantially equal annual installments commencing in the calendar year immediately following the calendar year during which the Director terminates service as a member of the Board, with the remaining installments made in each of the four subsequent calendar years; or
(ii)	paid in a lump sum in any one of the first through fifth calendar years following the calendar year during which the Director terminates service as a member of the Board.

(c) Prior to the end of the calendar year prior to the calendar year in which the Restricted Stock Units are granted, regardless of whether the Award is paid in a lump sum or installments, the Director may elect (on the form prescribed by the Company) that the Company pay the Director up to 33% of the Fair Market Value of the Restricted Stock Units in cash.

5. Notices. For purposes of this Award Agreement, notices and all other communications must be in writing and will be deemed to have been given when personally delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Company:	RRI Energy, Inc. 1000 Main Street Houston, Texas 77002 ATTENTION: Corporate Secretary
If to the Director:	«Director» c/o Corporate Secretary RRI Energy, Inc. 1000 Main Street Houston, Texas 77002

	or to such other address as either party may furnish to the other in writing in accordance with this Section 5.
6.	Successors and Assigns. This Agreement is binding upon and inures to the benefit of the Director, the Company and their respective permitted successors and assigns.
7.	Shareholder Rights. The Director shall have no rights of a shareholder with respect to the Restricted Stock Units unless and until the Director is registered as the holder of shares of Common Stock representing the Restricted Stock Units on the records of the Company.

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8. Section 409A of the Code. It is the intent of the Company and the Director that the provisions of the Plan and this Agreement comply with Section 409A of the Code and will be interpreted and administered consistent therewith. Accordingly, (i) no adjustment to the Award pursuant to Section 15 of the Plan and (ii) no substitutions of the benefits under this Agreement, in each case, shall be made in a manner that results in noncompliance with the requirements of Section 409A of the Code, to the extent applicable

RRI ENERGY, INC.
 

Mark M. Jacobs 

President and Chief Executive Officer 

3

EX-10.101

Exhibit 10.101

2009 LONG TERM INCENTIVE AWARD PROGRAM FOR OFFICERS
RRI ENERGY, INC. 2002 LONG-TERM INCENTIVE PLAN

     1. 2009 Program. This 2009 Long Term Incentive Award Program for Officers (“Program”) has been adopted by the Compensation Committee (“Committee”) of the Board of Directors of RRI Energy, Inc. (the “Company”) pursuant to and subject to the terms and conditions of the RRI Energy, Inc. 2002 Long Term Incentive Plan (“Plan”). Awards under this Program will be made under the 2009 Long Term Incentive Award Agreement (“Agreement”) attached hereto as Exhibit A.

     2. Objectives. The Program is intended to provide incentives to a group of officers who can make a significant contribution to the Company’s strategic objectives.

     3. Relationship to the Plan. This Program is subject to all of the terms, conditions and provisions of the Plan and administrative interpretations thereunder, if any. To the extent any provision herein conflicts with the express terms of the Plan, the terms of the Plan will control.

     4. Definitions. Except as defined in the Agreement, capitalized terms have the same meanings ascribed to them under the Plan.

     5. Eligibility and Participation. The Committee or its delegate will designate the Employees who will participate in this Program and will determine individual awards which will be memorialized in an Agreement with each Participant.

     6. Awards. Awards will consist of Restricted Stock Units and Cash Units.

     7. Vesting.

(a) Unless earlier forfeited or satisfied in accordance with Section 6 of the Agreement, Awards will vest as provided in the Agreement.

(b) In the event a Participant is no longer an employee of the Company for any reason on the Vesting Date, all unvested Awards will be forfeited immediately after termination.

     8. Change in Control. In the event of a Change in Control, all Awards will vest immediately and will be settled by a cash payment as provided in the Agreement.

     9. Effective Date. This Program is effective as of and the Grant Date is June 19, 2009.

RRI ENERGY, INC.
By:	/s/ Karen D. Taylor
	Karen D. Taylor
	Senior Vice President

EXHIBIT A

RRI ENERGY, INC.
2002 LONG TERM INCENTIVE PLAN
2009 LONG TERM INCENTIVE AWARD AGREEMENT

     Pursuant to this award agreement (the “Agreement”), as of June 19, 2009, RRI Energy, Inc.(the “Company”) hereby grants to «LEGAL» (the “Participant”), «stock_units» Restricted Stock Units and «cash_units» Cash Units. The number of units is subject to adjustment as provided in Section 15 of the RRI Energy, Inc. 2002 Long Term Incentive Plan (the “Plan”), subject to the terms, conditions and restrictions described in the Plan and in this Agreement.

1. Relationship to the Plan; Definitions.

(a)	This grant of Restricted Stock Units and Cash Units is subject to all of the terms, conditions and provisions of the Plan and administrative interpretations thereunder, if any, which have been adopted by the Committee and are in effect on this date. If any provision of this Agreement conflicts with the express terms of the Plan, the terms of the Plan control and, if necessary, the applicable provisions of this Agreement are deemed amended so as to carry out the purpose and intent of the Plan. References to the Participant also include the heirs or other legal representatives of the Participant or the Participant’s estate.
(b)	Except as defined herein, capitalized terms have the same meanings as under the Plan.
	Cash Unit means a Cash Award with each unit equal to the Fair Market Value of one share of Common Stock on the Vesting Date.
	Employment means employment with the Company or any of its subsidiaries.
	Restricted Stock Units means a Stock Award in units denominated in shares of Common Stock.
	Vesting Date means June 19, 2012.

2. Account. This grant of Restricted Stock Units and Cash Units will be implemented by a credit to a bookkeeping account maintained by the Company evidencing the accrual in favor of the Participant of the unfunded and unsecured right to receive the Restricted Stock Units and Cash Units granted.

3. Vesting and Forfeiture. Unless earlier forfeited under this Section 3, the Restricted Stock Units and Cash Units vest as of the Vesting Date. If the Participant’s Employment is terminated for any reason prior to the Vesting Date,

2

the Restricted Stock Units and Cash Units will be forfeited immediately after termination.

4. Payment of Restricted Stock Units. Upon the vesting of Participant’s right to receive Restricted Stock Units, a number of shares of Common Stock equal to the number of vested Restricted Stock Units will be registered in the Participant’s name as soon as practicable after the Vesting Date, but in no event later than March 15 of the year immediately following the year during which vesting occurs. The Company will have the right to withhold applicable taxes from any such payment or from other compensation payable to the Participant at the time of such vesting and delivery pursuant to Section 12 of the Plan.

5. Payment of Cash Units. Upon the vesting of Participant’s right to receive Cash Units, the Cash Units will be settled by a cash payment to the Participant as soon as practicable after the Vesting Date, but in no event later than March 15 of the year immediately following the year during which vesting occurs. The Company will have the right to withhold applicable taxes from any such payment or from other compensation payable to the Participant at the time of such vesting and delivery pursuant to Section 12 of the Plan.

6. Cash Payment Upon a Change of Control. Notwithstanding anything herein to the contrary, upon or immediately prior to the occurrence of any Change of Control of the Company prior to the Vesting Date, Participant’s right to receive Restricted Stock Units and Cash Units will vest and will be settled by a cash payment to Participant equal to the product of (i) the Fair Market Value per share of Common Stock on the date immediately preceding the date on which the Change of Control occurs and (ii) the total number of Restricted Stock Units and Cash Units granted. Such cash payment will satisfy the rights of Participant and the obligations of the Company under this Agreement in full.

7. Notices. For purposes of this Agreement, notices and all other communications must be in writing and will be deemed to have been given when personally delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed to the Company at 1000 Main St., Houston, TX 77002, and to the Participant at the address on record for the Participant in the Company’s human resources department or to such other address as either party may furnish to the other in writing in accordance with this Section 7.

8. Successors and Assigns. This Agreement is binding upon and inures to the benefit of the Participant, the Company and their respective permitted successors and assigns.

9. No Employment Guaranteed. Nothing in this Agreement gives the Participant any rights to (or imposes any obligations for) continued employment by the Company or any Subsidiary thereof or successor thereto, nor does it give those entities any rights (or impose any obligations) with respect to continued performance of duties by the Participant.

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10. Shareholder Rights. The Participant shall have no rights of a shareholder with respect to the Restricted Stock Units unless and until the Participant is registered as the holder of shares of Common Stock representing the Restricted Stock Units on the records of the Company.

11. Section 409A of the Code. It is intended that this Agreement and any Awards under this Agreement satisfy the short-term deferral exclusion under Section 409A of the Code.

RRI ENERGY, INC.
	Karen D. Taylor
	Senior Vice President

4

EX-10.104

Exhibit 10.104

OMNIBUS AMENDMENT

RELIANT ENERGY, INC. EXECUTIVE DEFERRAL,
INCENTIVE AND NON-QUALIFIED PLANS

          WHEREAS, Reliant Energy, Inc., a Delaware corporation (the “Company”), maintains and sponsors the following plans (collectively, the “Plans”):

Reliant Resources, Inc. Deferral Plan;
Reliant Energy, Inc. Deferral and Restoration Plan;
Reliant Energy, Inc. Frozen Benefit Restoration Plan;
Reliant Energy, Inc. Successor Deferral Plan;
Reliant Energy, Inc. 2001 Annual Incentive Compensation Plan;
Reliant Energy, Inc. 2002 Annual Incentive Compensation Plan for Executive Officers;
Reliant Energy, Inc. Sales Incentive Plan;
Reliant Energy, Inc. Power of One Incentive Plan;
Reliant Energy, Inc. Commercial Supplemental Incentive Plan;
Reliant Energy, Inc. 2002 Long Term Incentive Plan;
Reliant Energy, Inc. Long Term Incentive Plan;
Reliant Energy, Inc. Employee Stock Purchase Plan;
Reliant Energy, Inc. 2002 Stock Plan; and
Reliant Energy, Inc. Transition Stock Plan;

and

          WHEREAS, the Company has the authority to amend the Plans; and

          WHEREAS, effective as of May 2, 2009, the Company changed its name to RRI Energy, Inc.; and

          WHEREAS, the Company desires to amend the Plans to reflect the change in the Company’s name;

          NOW, THEREFORE, the Company hereby amends the Plans, effective as of May 2, 2009, as follows:

          1. The name of the plan sponsor of each of the Plans shall be changed to RRI Energy, Inc. and each of the Plans is hereby amended by replacing all references in the Plans to

1

“Reliant Energy, Inc.” with “RRI Energy, Inc.” and the Plans are hereby amended as otherwise necessary to reflect the foregoing.

          2. The Plans each are hereby amended to change the name of such Plans by replacing all references in the Plan names to “Reliant Energy, Inc.” with “RRI Energy, Inc.” and the Plans are hereby amended as otherwise necessary to reflect the foregoing.

          IN WITNESS WHEREOF, RRI Energy, Inc. has caused these presents to be executed by its duly authorized officer in a number of copies, all of which shall constitute one and the same instrument, which may be sufficiently evidenced by any executed copy thereof, this 4th day of June 2009, but effective as of the date set forth above.

RRI ENERGY, INC.
By:	/s/ Karen D. Taylor
	Karen D. Taylor
	Senior Vice President-Human Resources

2

EX-10.105

Exhibit 10.105

OMNIBUS AMENDMENT

RELIANT ENERGY, INC. SEVERANCE PLANS

          WHEREAS, Reliant Energy, Inc., a Delaware corporation (the “Company”), maintains and sponsors the following severance plans (collectively, the “Plans”):

     Reliant Energy, Inc. 2003 Involuntary Severance Benefits Plan for Employees with Annual Base Pay $200,000 and Above;

     Reliant Energy, Inc. 2003 Involuntary Severance Benefits Plan for Employees with Annual Base Pay at Least $150,000 but Less than $200,000;

     Reliant Energy, Inc. 2003 Involuntary Severance Benefits Plan for Employees with Annual Base Pay Less than $150,000; and

     Reliant Energy, Inc. Executive Severance Plan;

and

          WHEREAS, the Company has the authority to amend the Plans; and

          WHEREAS, effective as of May 2, 2009, the Company changed its name to RRI Energy, Inc.; and

          WHEREAS, the Company desires to amend the Plans to reflect the change in the Company’s name;

          NOW, THEREFORE, the Company hereby amends the Plans, effective as of May 2, 2009, as follows:

          1. The name of the plan sponsor of each of the Plans shall be changed to RRI Energy, Inc. and each of the Plans is hereby amended by replacing all references in the Plans to “Reliant Energy, Inc.” with “RRI Energy, Inc.” and the Plans are hereby amended as otherwise necessary to reflect the foregoing.

          2. The Plans each are hereby amended to change the name of such Plans by replacing all references in the Plan names to “Reliant Energy, Inc.” with “RRI Energy, Inc.” and the Plans are hereby amended as otherwise necessary to reflect the foregoing.

1

          IN WITNESS WHEREOF, RRI Energy, Inc. has caused these presents to be executed by its duly authorized officer in a number of copies, all of which shall constitute one and the same instrument, which may be sufficiently evidenced by any executed copy thereof, this 4^th day of June 2009, but effective as of the date set forth above.

RRI ENERGY, INC.
By:	/s/ Karen D. Taylor
	Karen D. Taylor
	Senior Vice President-Human Resources

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EX-12.1

EXHIBIT 12.1

RRI ENERGY, INC. AND SUBSIDIARIES
RATIO OF EARNINGS FROM CONTINUING OPERATIONS TO FIXED CHARGES
(Unaudited)

	2009(1)			2008			2007(2)			2006(3)			2005(4)
				(in thousands, except ratio amounts)
Fixed charges:
Interest expense	$	181,354		$	199,590		$	262,410		$	367,887		$	363,606
Capitalized interest		22,616			17,353			4,186			—			120
Interest within rent expense		41,311			42,599			43,653			50,592			51,145
Total fixed charges	$	245,281		$	259,542		$	310,249		$	418,479		$	414,871
Earnings from continuing operations:
Income (loss) from continuing operations before income taxes	$	(604,381	)	$	26,266		$	(361,731	)	$	(590,434	)	$	(929,131	)
(Income) loss of equity investments of unconsolidated subsidiaries		(605	)		(1,198	)		(4,686	)		(5,791	)		(25,458	)
Subtotal		(604,986	)		25,068			(366,417	)		(596,225	)		(954,589	)
Plus —
Fixed charges from above		245,281			259,542			310,249			418,479			414,871
Amortization of capitalized interest		9,554			8,887			8,529			8,459			8,457
Distributed income of equity investees		3,750			3,750			5,500			10,000			5,500
Less —
Capitalized interest		(22,616	)		(17,353	)		(4,186	)		—			(120	)
	$	(369,017	)	$	279,894		$	(46,325	)	$	(159,287	)	$	(525,881	)
Ratio of earnings from continuing operations to fixed charges		—			1.08			—			—			—

(1)	For 2009, our earnings were insufficient to cover our fixed charges by $614 million.
(2)	For 2007, our earnings were insufficient to cover our fixed charges by $357 million.
(3)	For 2006, our earnings were insufficient to cover our fixed charges by $578 million.
(4)	For 2005, our earnings were insufficient to cover our fixed charges by $941 million.

EX-21.1

Exhibit 21.1

SUBSIDIARIES OF RRI ENERGY, INC.
AS OF FEBRUARY 23, 2010

Subsidiary Name	Jurisdiction of Incorporation/Organization
Conemaugh Fuels, LLC*	Delaware
Keystone Fuels, LLC*	Delaware
Orion Power Atlantic, Inc.	Delaware
Orion Power Capital, LLC	Delaware
Orion Power Development Company, Inc.	Delaware
Orion Power Holdings, Inc.	Delaware
Orion Power Marketing and Supply, Inc.	Delaware
Orion Power Midwest GP, Inc.	Delaware
Orion Power Midwest LP, LLC	Delaware
Orion Power Midwest, L.P.	Delaware
Orion Power New York GP, Inc.	Delaware
Orion Power New York LP, LLC	Delaware
Orion Power New York, L.P.	Delaware
Orion Power Operating Services, Inc.	Delaware
Orion Power Operating Services MidWest, Inc.	Delaware
RRI Energy Asset Management, LLC	Delaware
RRI Energy Broadband, Inc.	Delaware
RRI Energy California Holdings, LLC	Delaware
RRI Energy Channelview (Delaware) LLC	Delaware
RRI Energy Channelview (Texas) LLC	Delaware
RRI Energy Channelview LP	Delaware
RRI Energy Communications, Inc.	Delaware
RRI Energy Coolwater, Inc.	Delaware
RRI Energy Corporate Services, LLC	Delaware
RRI Energy Electric Solutions, LLC	Delaware
RRI Energy Ellwood, Inc.	Delaware
RRI Energy Etiwanda, Inc.	Delaware
RRI Energy Florida, LLC	Delaware
RRI Energy IT Trust	Delaware
RRI Energy Key/Con Fuels, LLC	Delaware
RRI Energy Mandalay, Inc.	Delaware
RRI Energy Mid-Atlantic Power Holdings, LLC	Delaware
RRI Energy Mid-Atlantic Power Services, Inc.	Delaware
RRI Energy Northeast Generation, Inc.	Delaware
RRI Energy Northeast Holdings, Inc.	Delaware
RRI Energy Northeast Management Company	Pennsylvania
RRI Energy Ormond Beach, Inc.	Delaware
RRI Energy Power Generation, Inc.	Delaware
RRI Energy Sabine (Delaware), Inc.	Delaware
RRI Energy Sabine (Texas), Inc.	Delaware
RRI Energy Services Channelview LLC	Delaware
RRI Energy Services Desert Basin, LLC	Delaware
RRI Energy Services, Inc.	Delaware
RRI Energy Solutions East, LLC	Delaware
RRI Energy Solutions Northeast, LLC	Delaware
RRI Energy Trading Exchange, Inc.	Delaware
RRI Energy Ventures, Inc.	Delaware
RRI Energy Wholesale Generation, LLC	Delaware
Sabine Cogen, LP*	Delaware
San Gabriel Power Generation, LLC	Delaware

* Indicates subsidiaries not wholly-owned either directly or indirectly.

EX-23.1

EXHIBIT 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors
RRI Energy, Inc.:

We consent to the incorporation by reference in the registration statements on Form S-3 (Nos. 333-107295 and 333-107296) and on Form S-8 (Nos. 333-60124, 333-60328, 333-74754, 333-74790, 333-86608, 333-86610, 333-86612, 333-98273, 333-101471, 333-101473, 333-106097, and 333-106098) of RRI Energy, Inc. of our:

Report dated February 24, 2010, with respect to (i) the consolidated balance sheets of RRI Energy, Inc. as of December 31, 2009 and 2008, and the related consolidated statements of operations, stockholders’ equity and comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2009, and the related financial statement schedule and (ii) the effectiveness of internal control over financial reporting as of December 31, 2009, which report appears in the December 31, 2009 annual report on Form 10-K of RRI Energy, Inc. Our report with respect to the consolidated financial statements refers to a change in accounting for fair value measurements of financial instruments in 2008.

Report dated February 24, 2010, with respect to the consolidated balance sheets of RRI Energy Mid-Atlantic Power Holdings, LLC and subsidiaries as of December 31, 2009 and 2008, and the related consolidated statements of operations, member’s equity and comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2009, which report appears in the December 31, 2009 annual report on Form 10-K of RRI Energy, Inc. Our report with respect to the consolidated financial statements refers to a change in accounting for fair value measurements of financial instruments in 2008.

Report dated February 24, 2010, with respect to the consolidated balance sheets of Orion Power Holdings, Inc. and subsidiaries as of December 31, 2009 and 2008, and the related consolidated statements of operations, stockholder’s equity and comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2009, which report appears in the December 31, 2009 annual report on Form 10-K of RRI Energy, Inc.

KPMG LLP

Houston, Texas
February 24, 2010

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Mark M. Jacobs, certify that:

     1. I have reviewed this Annual Report on Form 10-K of RRI Energy, Inc. (the registrant);

     2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

     4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

     5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 25, 2010	/s/ Mark M. Jacobs
	Mark M. Jacobs
	President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Rick J. Dobson, certify that:

     1. I have reviewed this Annual Report on Form 10-K of RRI Energy, Inc. (the registrant);

     2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

     4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

     5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 25, 2010	/s/ Rick J. Dobson
	Rick J. Dobson
	Executive Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
AND THE CHIEF FINANCIAL OFFICER PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(SUBSECTIONS (a) AND (b) OF SECTION 1350, CHAPTER 63 OF TITLE 18,
UNITED STATES CODE)

     Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) (the Act), Mark M. Jacobs, President and Chief Executive Officer of RRI Energy, Inc. (the Company), and Rick J. Dobson, Executive Vice President and Chief Financial Officer, each hereby certify, to the best of their knowledge:

(a)	the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the Report), fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(b)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 25, 2010	/s/ Mark M. Jacobs
	Mark M. Jacobs
	President and Chief Executive Officer
	/s/ Rick J. Dobson
	Rick J. Dobson
	Executive Vice President and Chief Financial Officer