Reliant Energy Announces Clean-Coal Power Plant for Pennsylvania

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-- WITH PHOTO -- TO BUSINESS AND ENERGY EDITORS:

Reliant Energy Announces Clean-Coal Power Plant for Pennsylvania

PENNSYLVANIA, HOUSTON AND ARMAGH, Mar. 19 -/E-Wire/-- Reliant Energy Seward LLC, an unregulated unit of Reliant Energy's Wholesale Group, today announced it is planning to build a power generation plant in western Pennsylvania using the latest clean-coal technology.

(Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20010319/DAM003 )

"The new plant will help clean up the environment, create and retain jobs, and provide a reliable supply of power for the state," said Curt Morgan, president, East Region, Reliant Energy Wholesale Group, based in Houston.

Using circulating fluidized bed (CFB) clean-coal technology, the new 520-megawatt facility will be built at the company's Seward Power Plant in Indiana County, Pa. (Editor's note: A description of CFB technology is attached.) The existing plant will be retired when the new facility begins commercial operation in 2004.

Environmental Benefits Morgan said the CFB technology is an excellent fit for several reasons:

"The technology will allow the use of waste coal as the primary fuel source, providing an opportunity to clean up piles of waste coal, which are abundant in the area. Any coal required to supplement the waste coal is expected to be purchased from the Pennsylvania market," he said.

In the plant's first 15 years, more than 40 million tons of coal refuse will be removed from sites in Cambria, Indiana, and Somerset counties. Additional sites in other nearby counties also are under consideration. In all, more than 100 million tons of waste coal could be removed during the life of the project.

Removing the waste coal not only will beautify the landscape, but also it will remove a significant source of acid discharge from the Kiskiminetas- Conemaugh River watersheds, enhancing the efforts of environmental groups working to clean up the waterway, the company said.

Even the ash produced at the plant will be used beneficially. Alkaline ash will be returned to many of the waste-coal sites to chemically neutralize remaining acids.

Use of the CFB technology also will improve air quality, according to the company, providing yet another environmental advantage. Air emissions will decrease significantly despite the fact that the station will be 2 1/2 times larger and, unlike the existing plant, the new station will run almost continuously.

Significant Economic Benefits Equally important are the economic benefits provided by the facility.

Operation of the new plant will directly and indirectly preserve about 130 jobs and, according to a study by The Pennsylvania State University, create more than 400 new ones, primarily in trucking, truck maintenance, and coal-handling. At peak construction, the project will create an estimated 700 construction jobs.

State Financing Critical "The project could not have been built without help from the state, which is providing $400 million in tax-exempt bonds over three years through the Pennsylvania Economic Development Financing Authority," said Joe Bob Perkins, president and chief operating officer of Reliant Energy Wholesale Group. Repayment of the bonds will be made from project profits, not from electricity customers.

"We've received excellent support from all quarters in our efforts to make this project a reality," Perkins said. "We're grateful to Governor Tom Ridge, U.S. Rep. John Murtha, Secretary James Seif of the Pennsylvania Department of Environmental Protection, Secretary Samuel A. McCullough of the Pennsylvania Department of Community and Economic Development, the Indiana County Development Corp., and governmental and conservation groups in Cambria, Indiana, and Somerset counties, all of which championed our cause."

"The Seward project is really three great stories rolled into one," according to Secretary McCullough. He said it offers "more jobs for Pennsylvania families, a reliable supply of additional power, and a cleaner environment."

Next Steps Reliant Energy filed an application with the Pennsylvania Department of Environmental Protection for an air permit for the project in June 2000, as well as with the East Wheatfield Township for a building permit late last month. Construction of the project, which will take approximately 36 months, will begin upon receipt of these and other state and national permits.

ALSTOM Power, of Windsor, Conn., has partnered with Duke Fluor-Daniel, Inc., of Charlotte, N.C. to build the 520-megawatt CFB plant for Reliant Energy. The ALSTOM Power CFB clean-coal technology has been developed to provide a safe, efficient way to burn the waste coal.

About Reliant Energy Reliant Energy (NYSE: REI), based in Houston, is an international energy services and energy delivery company with approximately $29 billion in annual revenue and assets totaling more than $32 billion. The company has a presence in most of the major power regions of the U.S. It also has power generation and wholesale trading and marketing operations in Western Europe. Reliant Energy has nearly 27,000 megawatts of power generation in operation in the U.S. and Western Europe and has announced acquisitions and development projects that will add nearly 4,000 megawatts.

Reliant Energy's retail marketing and distribution operations serve nearly 4 million electricity and natural gas customers in the U.S., and its Internet infrastructure and communications company serves business customers in Texas.

For more information about Reliant Energy, visit the company's website at www.reliantenergy.com.

/NOTE TO EDITORS: Circulating Fluidized Bed [CFB] Technology

Fluid bed combustion is a clean-coal technology capable of reliably burning waste coal to produce steam and electricity while meeting stringent environmental requirements.

The term "fluidized bed" refers to the fact that large amounts of air are blown into the furnace through nozzles in the bottom. Much like popcorn in a hot-air popper, the waste coal is suspended in air as it is burned. A mixing and remixing of the fuel ensures that everything is burned thoroughly.

Fluidized bed systems have three big advantages over traditional methods of burning fuel: 1. A CFB can use fuels such as waste coal, which have no other value. 2. The system removes sulfur and turns it into gypsum, the same product used in wallboard. 3. The low firing temperature reduces the formation of nitrogen oxides, which contribute to the formation of ground-level ozone.

The Reliant Energy Seward project is believed to be the largest power plant in the world burning waste coal using CFB technology. The facility also will be the first major coal-fired power plant built in Pennsylvania since 1980.

More Technical Information

The heart of a CFB system is a vertical chamber called the furnace. Fuel is fed into the furnace where it is burned to produce heat. The walls of the furnace are made of tubes containing water. These tubes absorb the heat from the burning fuel, in turn heating the water and converting it to steam. The steam is sent to a steam turbine. A steam turbine and generator convert the energy of the steam to electrical energy.

A CFB uses a unique process to capture the sulfur dioxide gas produced when fuel is burned. In addition to the fuel, fine-grained limestone is fed into the furnace. The limestone reacts with the sulfur dioxide gas to form gypsum, the same material used in wallboard.

The fuel and limestone are actually suspended [or fluidized, in technical terms] in the air as the fuel burns. The air lifts partly burned fuel and limestone out of the top of the furnace. At the outlet of the furnace, cyclones separate the solids from the hot air stream. A cyclone uses centrifugal force to separate the solids. These solids are returned to the bottom of the furnace, where the fuel again burns and the limestone is used again to capture more sulfur dioxide. This continuous recycling of solids rises in the boiler and is captured in the cyclones and returned to the furnace, thus the term "circulating."

Some of the heat from the hot air leaving the cyclones is captured in more water-filled tubes to make additional steam. The cooled gases are further cleaned in a device called a baghouse. The baghouse is a fabric filter that acts like a vacuum cleaner bag. The cooled and cleaned air is returned into the environment.

An individual piece of fuel is eventually completely burned, leaving only ash, and an individual piece of limestone has been fully converted to gypsum and cannot capture any more sulfur dioxide. To keep the system in equilibrium, new fuel and limestone are continuously added to the furnace, and ash and solid gypsum [the exhausted limestone] are removed from the bottom of the furnace and the baghouse. The removed solids are disposed of safely in a landfill or used for other purposes such as soil stabilization.

CFB technology has major benefits to the environment. Because a CFB operates at lower temperatures than other types of power plants burning solid fuels, nitrogen oxide emissions are lower. The use of limestone to capture sulfur dioxide, combined with the filters to remove fine particles from the exhaust air, make a CFB one of the cleanest ways to burn waste coal and other solid fuels.

A properly designed CFB can burn a wide range of fuels, including coal, waste coals, petroleum coke, oil shale, hardwood and even paper sludge. CFB units have operated with high reliability in the United States and worldwide for more than 20 years. The success of this advanced clean-coal technology makes it ideal for the clean and economical generation of steam and electricity./

media, Richard Wheatley, Houston, [REDACTED-PHONE], or Cindy Abram,

Johnstown, Pa., [REDACTED-PHONE], or investors, Dennis Barber, [REDACTED-PHONE], all

/Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20000309/DATH030

http://www.newscom.com/cgi-bin/prnh/20010319/DAM003

AP Archive: http://photoarchive.ap.org

PRN Photo Desk, [REDACTED-PHONE] or [REDACTED-PHONE]/

/Company News On-Call: http://www.prnewswire.com/comp/419090.html or fax,

[REDACTED-PHONE], ext. 419090

http://reliantenergy.com

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