GWF renegotiates California power contracts

PARSIPPANY, N.J., Aug. 27, 2002 — PSEG Global confirmed recently that its joint venture GWF Energy LLC (GWF) has successfully renegotiated terms and conditions to supply power to the state of California from three new peaker facilities located on the major transmission line known as NP15.

The agreement settles all issues in California. As a result, PSEG Global will continue with construction of its Tracy Station and proceed with financing of all three projects.

The three facilities are:

* The Hanford Energy Park, an approximate 90 MW peaker with 2 LM 6000 turbines, which began operation in September 2001.

* The Henrietta Energy Park, an approximate 90 MW peaker with 2 LM 6000 turbines that began operation in July 2002.

* The Tracy Energy Station, an approximate 160 MW peaker facility that is targeted to start operation in the second quarter of 2003. The Tracy Station received approval from the California Energy Commission in July. Construction of the facility is under way.

The California Department of Water Resources (CDWR) will continue to purchase power from the Hanford and Henrietta facilities through December 2011 and from the Tracy facility through October 2012.

The renegotiated contracts lower prices and reduce the committed hours of operation. They also settle outstanding issues including PSEG Global’s claims of force majeure issues and will result in the withdrawal of the complaints filed at FERC by the California Public Utilities Commission (CPUC) and the California Energy Oversight Board.

“This resolves any and all issues regarding PSEG Global facilities in California. The end result is a win-win for both sides with better prices and secured power for the state of California and business certainty for PSEG Global,” said David Seabrook, vice president corporate development, PSEG Global. “Our two plants have been key components in meeting California’s energy needs both last year and this summer and the Tracy plant will help bring increased energy security to the state next year. The plants will also deliver solid returns to PSEG Global for its investment.”

GWF is owned by a partnership of PSEG Global located in Parsippany, New Jersey, and Harbert Cogen located in Birmingham, Alabama. In addition to the three new facilities, affiliates of GWF own and operate seven other small power generating facilities in Central and Northern California.

PSEG Global develops, acquires, owns and operates electric generation and distribution facilities and engages in power production and distribution in selected U.S. and international markets. PSEG Global is a direct subsidiary of PSEG Energy Holdings and an indirect subsidiary of PSEG.

Source: PSEG Global

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