Power Engineering - Mirant reasserts that it operated legally, appropriately and with approval in western power market

ATLANTA, June 11, 2002 -- Following the recent release of transcripts by Xcel Energy Inc., Mirant on Monday reasserted that its operations were in full compliance with the rules of the Western power market and that comments contained in the transcripts refer to routine, legitimate activities fully disclosed to the Federal Energy Regulatory Commission (FERC) in Mirant's May 22, 2002 filing.

The transcripts are of conversations held in the summer and fall of 2000 between employees of Southern Company Energy Marketing (now Mirant Americas Energy Marketing, a Mirant subsidiary), and employees of Public Service Company of Colorado (PSCo), a subsidiary of Xcel Energy Inc.

"The scheduling to load and other market-related activities discussed between these employees were legal, appropriate and within the rules of the Western power market as established by FERC and the California Independent System Operator (Cal ISO)," said Marce Fuller, president and chief executive officer, Mirant. "The data related to these transactions were fully disclosed to FERC in our filing of May 22, 2002. In short, there is no new information in these transcripts."

Mirant acknowledges that the informal dialog contained in the transcripts can be easily misinterpreted. The company notes that the conversation is between employees working to increase California's power supply and relieve congestion on an over-stressed transmission system. Data prove that the conversations pertain to transactions in which fewer than 10,000 megawatt hours were scheduled to load. Mirant traded more than 500 million-megawatt hours in 2000 - 2001. Data provided to FERC in Mirant's May 22 filing show that the actions of the employees resulted in power being generated and delivered, and congestion relieved.

To facilitate the transactions and help PSCo sell power into California, Mirant performed a scheduling coordination function for the company. Mirant provided this service as it had the ability to schedule generation for sale in California in shorter time periods than PSCo.

Mirant notes that companies, such as itself, perform these services to ensure system reliability. Companies scheduling to load have no ability to set the price at which they sell generation. Additional generation scheduled to load increases supply in real-time markets thereby lowering real-time prices.

In its May 22, 2002 filing and corresponding news release, Mirant stated that with the knowledge and support of the Cal ISO, it scheduled electrical load and an equal amount of generation despite the fact that the company, and the Cal ISO, knew the actual load would be zero.

"As we have stated, we scheduled load because California utilities routinely under-forecasted electricity demand," said Fuller. "We also scheduled load to improve the availability and efficiency of our power plants in the state, and to ensure the overall reliability of the regional system. Again, this action is within the rules designed by the Cal ISO and FERC to govern the Western power market."

Mirant has also complied in full to subsequent inquiries made by FERC. In its May 31st, 2002 filing to FERC, Mirant denied conducting power and gas wash trades following an additional, thorough investigation.

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