Texas Genco Holdings, Inc. , an 81 percent owned subsidiary of CenterPoint Energy, Inc. , today reported net income of $33 million, or $0.42 per share for the quarter ended June 30, 2003, compared to a net loss of $18 million, or $0.23 per share for the same period of 2002.

For the six months ended June 30, 2003, income before cumulative effect of accounting change was $22 million, or $0.28 per share, compared to a loss of $53 million, or $0.66 per share for the same period of 2002. Net income for the six months ended June 30, 2003 was $121 million, or $1.52 per share which reflects the benefit from the cumulative effect of accounting change of $99 million, or $1.24 per share, from the implementation of SFAS No. 143, "Accounting for Asset Retirement Obligations." This compares to a net loss of $53 million, or $0.66 per share for the same period of 2002.

Revenues for the second quarter of 2003 increased significantly compared to the same period of 2002 primarily due to higher capacity auction revenues. Operating expenses increased in the quarter due to higher natural gas and purchased power costs and increased operation and maintenance expenses, partially offset by reduced taxes other than income taxes. Operation and maintenance expenses increased due to outage costs associated with baseload generation units, including $4 million related to an unplanned outage at Unit 1 of the company's 30.8 percent interest in the South Texas Project Electric Generating Station (STP) nuclear facility. In addition, higher pension, employee benefit and technical support costs contributed to the increase in operation and maintenance expenses. The company estimates that the added cost of replacement energy associated with the STP Unit 1 outage negatively impacted gross margin by approximately $20 million for the quarter.

"Wholesale electricity prices were much higher in 2003 due to substantially higher natural gas prices which led to increased capacity auction revenues for our baseload products," said David Tees, president and chief executive officer of Texas Genco. "As a result, we had a considerable increase in our revenues, margins and earnings per share. We continue to be very pleased with Texas Genco's progress and the efforts of our employees to run our plants safely and efficiently."

The company declared its second quarterly dividend of $0.25 per share of common stock on May 8, 2003.

2003 OUTLOOK

The company has previously provided earnings guidance for 2003 of $1.10 to $1.30 per share. Taking into account much improved auction prices, and despite the impact of unplanned plant outages, the company now expects to achieve the high end of the guidance range.

WEBCAST OF EARNINGS CONFERENCE CALL

The management of Texas Genco will host an earnings conference call on Tuesday, July 29, 2003, at 9:00 a.m. Central time. Interested parties may listen to a live, audio broadcast of the conference call at www.txgenco.com/investor.html . A replay of the call can be accessed approximately two hours after the completion of the call, and will be archived on the web site for at least one year.

Texas Genco Holdings, Inc., based in Houston, Texas, is one of the largest wholesale electric power generating companies in the United States with over 14,000 megawatts of generation capacity. It sells electric generation capacity, energy and ancillary services in one of the nation's largest power markets, the Electric Reliability Council of Texas (ERCOT). Texas Genco has one of the most diversified generation portfolios in Texas, using natural gas, oil, coal, lignite, and uranium fuels. The company owns and operates 60 generating units at 11 electric power-generating facilities and owns a 30.8 percent interest in a nuclear generating plant. Texas Genco currently is a majority-owned subsidiary of CenterPoint Energy, Inc. For more information, visit our web site at www.txgenco.com .

This news release includes forward-looking statements. Actual events and results may differ materially from those projected. Factors that could affect actual results include the timing and impact of future regulatory and legislative decisions, effects of competition, weather variations, changes in CenterPoint Energy's or Texas Genco's business plans, financial market conditions, the timing and extent of changes in commodity prices, particularly natural gas, and other factors discussed in CenterPoint Energy's and Texas Genco's filings with the Securities and Exchange Commission.

                        Texas Genco Holdings, Inc.
                  Statements of Consolidated Operations
                          (Thousands of Dollars)
                               (Unaudited)

                                        Quarter Ended     Six Months Ended
                                           June 30,            June 30,
                                       2003      2002      2003      2002

  Revenues:
    Energy revenues                  $378,402  $306,327  $602,166  $546,809
    Capacity and other revenues       200,109   107,321   334,932   192,486
      Total                           578,511   413,648   937,098   739,295

  Expenses:
    Fuel costs                        349,318   295,241   557,307   476,224
    Purchased power                    22,974     4,258    34,968    52,624
    Operation and maintenance         105,301    78,906   210,651   173,615
    Depreciation and amortization      39,391    38,601    78,470    78,932
    Taxes other than income taxes      11,483    25,764    22,774    38,778
      Total                           528,467   442,770   904,170   820,173
  Operating Income (Loss)              50,044   (29,122)   32,928   (80,878)

  Other Income                          1,089     2,902     1,289     2,904
  Interest Expense                      2,822     7,962     5,625    15,951


  Income (Loss) Before Income Taxes    48,311   (34,182)   28,592   (93,925)

  Income Tax Benefit (Expense)        (15,018)   15,890    (6,181)   40,939

  Income (Loss) Before Cumulative
   Effect of Accounting Change         33,293   (18,292)   22,411   (52,986)

  Cumulative Effect of Accounting
   Change, net of tax                     ---       ---    98,910       ---

  Net Income (Loss) Attributable to
   Common Shareholders                $33,293  $(18,292) $121,321  $(52,986)


  Basic and Diluted Earnings Per
   Common Share:
    Income (Loss) Before Cumulative
     Effect of Accounting Change        $0.42    $(0.23)    $0.28    $(0.66)
    Cumulative Effect of Accounting
     Change, net of tax                   ---       ---      1.24       ---
    Net Income (Loss) Attributable to
     Common Shareholders                $0.42    $(0.23)    $1.52    $(0.66)

  Dividends Declared per Common
   Share                                $0.25      $---     $0.50      $---

  Weighted Average Common Shares
   Outstanding (000):
    - Basic                            80,000    80,000    80,000    80,000
    - Diluted                          80,000    80,000    80,000    80,000

Reference is made to the Notes to the Consolidated Financial Statements contained in the Annual Report on Form 10-K of Texas Genco Holdings, Inc.

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SOURCE: Texas Genco Holdings, Inc.