Reliant Energy, Incorporated today announced that it has received notice from the trustee of its 2.0 percent Zero-Premium Exchangeable Subordinated Notes due 2029 (ZENS) that holders of 943,900 ZENS exercised their right to exchange their ZENS for cash by notice dated July 26, 2002. Holders of the ZENS submitted for exchange will receive a cash payment for each ZENS calculated as 95 percent of the exchange market value of the reference shares. There are 1.5 reference shares of AOL Time Warner common stock for each ZENS security and the exchange market value is calculated using the average NYSE closing price per share of AOL Time Warner common stock on the five trading days following the notice date. Payment will be made by Reliant Energy no later than ten trading days following the notice date.

Reliant Energy owns the reference shares of AOL Time Warner common stock and may elect to liquidate such holdings to make estimated aggregate cash payments of $15 million based on the closing market price of AOL Time Warner common stock on July 26, 2002. The average price used to calculate the cash payments may differ from the closing price on July 26, 2002.

This press release is required by the indenture relating to the ZENS.

Reliant Energy, based in Houston, Texas, is an international energy services and energy delivery company. The company has nearly 31,000 megawatts of power generation in operation in the U.S. and nearly 3,500 megawatts of power generation in Western Europe. Reliant Energy's retail marketing and distribution operations serve approximately four million electricity and natural gas customers in the U.S. More information on Reliant Energy can be found on its web site at http://www.reliantenergy.com/ .

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SOURCE: Reliant Energy, Incorporated