News Releases

NRG Announces Voluntary Chapter 11 Filing 

MINNEAPOLIS - Xcel Energy (NYSE:XEL) announced that its wholly-owned subsidiary, NRG Energy, Inc., and certain of NRG's U.S. affiliates (NRG) today filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code to restructure their debt. Neither Xcel Energy nor any of Xcel Energy's other subsidiaries were included in the filing.

NRG's filing included its Plan of Reorganization. The plan incorporates the terms of an overall settlement previously announced among NRG, Xcel Energy and members of NRG's major creditor constituencies that provides for payments by Xcel Energy to NRG and its creditors of up to $752 million. A plan support agreement reflecting the settlement has been signed by Xcel Energy, NRG, holders of approximately 40% in principal amount of NRG's long-term notes and bonds along with two NRG banks who serve as co-chairs of the Global Steering Committee for the NRG bank lenders. This agreement will become fully effective upon execution by holders of approximately an additional ten percent in principal amount of NRG's long-term notes and bonds and by a majority of NRG bank lenders representing at least two-thirds in principal amount of NRG's bank debt. Xcel Energy expects the requisite signatures will be obtained promptly.

"I believe that this is a very positive step for Xcel Energy and its shareholders," said Wayne Brunetti, chairman, president and chief executive officer of Xcel Energy. "This is the latest step in NRG's restructuring process, which was started last year, and will provide significant benefits, many of which I have discussed in the past."

• It reduces the risks and uncertainty surrounding NRG, which have negatively affected Xcel Energy's stock price. Although no one can predict with certainty the outcome of a Chapter 11 proceeding, we believe the settlement contains terms that greatly reduce our exposure to any material claims.
• The settlement payments of up to $752 million by Xcel Energy should not require the issuance of additional equity. We expect to finance the settlement with cash-on-hand at the Xcel Energy holding company level and with funds from the tax benefit associated with the write-off of our investment in NRG.
• It will free our management to concentrate its energies on running our core utility business and restoring our financial strength.
• It will improve our financial structure. Following NRG's Chapter 11 filing, Xcel Energy ceased including NRG as a consolidated subsidiary in its financial statements and instead will report NRG under the equity method. This change will result in Xcel Energy's common equity as a percentage of its capitalization increasing to approximately 40%. In fact, we hope this could pave the way for a potential upgrade of the credit ratings of our operating utilities and the Xcel Energy holding company.

The terms of the settlement with NRG's major creditors are basically the same as the terms of the tentative settlement reported on March 26, 2003. $350 million would be paid at or shortly following the effective date of the NRG Plan of Reorganization. It is expected that this $350 million payment would be made prior to year-end 2003. An additional $50 million would be paid on January 1, 2004, and all or any part of such payment could be made, at Xcel Energy's election, in Xcel Energy common stock. Up to $352 million would be paid in the second quarter of 2004.

Consummation of the settlement is contingent upon, among other things, the following:

• The effective date of the NRG Plan of Reorganization occurring on or prior to December 15, 2003;
• The final Plan of Reorganization approved by the Bankruptcy Court and related documents containing terms satisfactory to Xcel Energy, NRG and various groups of the NRG creditors;
• The receipt of releases in favor of Xcel Energy from holders of at least 85 percent of the general unsecured claims held by NRG's creditors; and
• The receipt by Xcel Energy of all necessary regulatory and other approvals.

"Since many of the required conditions are not within Xcel Energy's control, we cannot state with certainty that the settlement will be effectuated." Brunetti said. "Nevertheless, I am optimistic at this time that the settlement will be implemented."

"The actions today, along with the improvement of our common equity ratio, should also enhance our chances of obtaining the requisite waiver from the SEC to permit us to declare and pay the dividend that we wanted to declare in March." The operating and impairment losses at NRG over the past 12 months have caused significant reductions in Xcel Energy's retained earnings. Under the Public Utility Holding Company Act, a registered holding company, such as Xcel Energy, cannot declare or pay a dividend when retained earnings are less than the prospective dividend, unless the company receives a waiver from the SEC. In December 2002, Xcel Energy applied to the SEC for the necessary waiver permitting Xcel Energy to declare and pay dividends in the event of negative retained earnings. However, at this time, the SEC has not ruled on the request.

NRG filed its voluntary petitions in the United States Bankruptcy Court for the Southern District of New York. As of December 31, 2002, NRG had consolidated companywide (filing and nonfiling entities combined) assets of $10.9 billion and liabilities of $11.6 billion. None of NRG's operations outside the U.S. are included in the filing. A complete list of the entities included in the filing is available on NRG's website, www.nrgenergy.com.

Forward Language

This release includes forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements include statements that are intended to be identified in this document by the words "anticipate," "estimate," "expect," "projected," "forecast," "objective," "outlook," "possible," "potential" and similar expressions. Actual results may vary materially. Factors that could cause actual results to differ materially include, but are not limited to: general economic conditions, including the availability of credit, actions of rating agencies and their impact on access to capital; business conditions in the energy industry; competitive factors; unusual weather; changes in federal or state legislation; regulation; currency translation and transaction adjustments; the higher degree of risk associated with Xcel Energy's nonregulated businesses compared with Xcel Energy's regulated business; risks related to operations of NRG during its reorganization; actions by the bankruptcy court; actions by NRG's creditors; the plan support agreement becoming effective; actions by regulators, including the SEC under PUHCA; and the other risk factors listed from time to time by Xcel Energy in reports filed with the SEC, including Exhibit 99.01 to Xcel Energy's report on Form 10-K for the year ending Dec. 31, 2002.

This information is not given in connection with any sale, offer for sale or offer to buy any security.

CONTACT: Xcel Energy, Minneapolis
Investor Relations:
R J Kolkmann, 612/215-4559
or
P A Johnson, 612/215-4535
or
Media inquiries:
Xcel Energy media relations, 612/215-5300
www.xcelenergy.com