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Reliant executive calls for federal restructuring

HOUSTON, Texas, Nov. 29, 2000–Robert Harvey, vice chairman Reliant Energy Inc., says the window has closed on market conditions fostering deregulation of the electricity industry.

�The market environment was driving the move toward competition,� he said. �The abundant and low cost capacity just needed access.�

That is no longer the case, Harvey told the Arthur Andersen symposium, “Energy in the new Economy”. There is no longer excess capacity, which given fair access to the grid, could help drive down prices paid by consumers.

The process has slowed and resulted in an incomplete transition to competition in the wholesale electricity market. Problems remain with access to transmission lines owned by utilities, he says.

�Even that piece (wholesale market) has a long way to go,� says Harvey. �On the retail level, competition is going even slower, because it�s a flawed patchwork model.�

To get the process moving again, Harvey suggests the following:

� Adopt federal restructuring legislation for both public and privately owned wholesale power.

� Ensure a proactive and procompetitive Federal Energy Regulatory Commission.

� Establish true retail competition. Real-time pricing must be available to consumers to prompt the required demand response.

� Balance environmental interests with the need for new capacity.

� Continue restructuring of the companies in the electricity industry in order to capture more economies.

� Continue separation of vertically integrated companies into generation, transmission, and distribution units followed by consolidation among those pieces.

For more information about the symposium, visit Arthur Anderson’s web site at http://www.energysymposium.com/.