Reliant Energy Reports Third Quarter 2008 Results

Reliant Energy, Inc. reported open EBITDA of $105 million for the third quarter of 2008, compared to $443 million for the third quarter of 2007. The decline was primarily due to lower retail contribution margin from the effects of Hurricane Ike, which includes lower sales volumes, the sale of excess supply at a loss and the cancellation of planned price increases.

Adjusted EBITDA, which includes the effect of historical and operational wholesale hedges and gains on sales of assets and emission and exchange allowances, was $239 million for the third quarter of 2008, compared to $443 million for the third quarter of 2007. The improvement in historical and operational hedges was offset by the decline in retail contribution margin mentioned above.

"We are experiencing a series of unprecedented events in our industry and the economy as a whole,” said Mark Jacobs, president and chief executive officer. "It is important to step back from the financial turmoil and recognize that we have two valuable businesses, one with a diverse portfolio of wholesale generation assets and another with a strong and loyal retail customer franchise.” Jacobs added, "In September we announced a plan to unwind the credit-enhanced retail structure with Merrill Lynch and raise additional capital to support the transition. The Board of Directors is reviewing strategic alternatives to improve upon this plan.”

The loss from continuing operations before income taxes for the third quarter of 2008 was $1,600 million, compared to income of $224 million for the third quarter of 2007. The 2008 GAAP results include net unrealized losses from energy derivatives of $1,694 million. The reported numbers for 2007 include net unrealized losses from energy derivatives of $28 million.

Open EBITDA was $339 million for the first nine months of 2008, compared to $750 million for the same period of 2007. The decline was primarily due to lower retail contribution margin resulting from extraordinary market conditions in ERCOT in the second quarter combined with the financial impact of Hurricane Ike in the third quarter. Adjusted EBITDA was $610 million for the first nine months of 2008, compared to $689 million for the same period of 2007. Improvement in historical and operational hedges partially offset the decline in retail contribution margin. Free cash flow provided by continuing operations was $47 million for the first nine months of 2008, compared to a free cash flow provided by continuing operations of $8 million for the same period in 2007.

The loss from continuing operations before income taxes for the first nine months of 2008 was $418 million, compared to income of $180 million for the first nine months of 2007. The 2008 GAAP results include net unrealized losses from energy derivatives of $566 million and a $37 million charge for western states litigation and similar settlements. The reported numbers for 2007 include net unrealized gains from energy derivatives of $168 million, a $22 million charge for western states litigation and similar settlements and a $72 million charge for debt extinguishments. Operating cash flow from continuing operations was $261 million for the first nine months of 2008, compared to $332 million for the same period of 2007.

OUTLOOK

Reliant Energy’s outlook is based on forward commodity prices as of September 26, 2008 and includes a range for the retail segment contribution margin. The outlook also assumes an orderly unwind of the credit-enhanced retail structure, completion of the previously announced $1 billion of new capital commitments and a wind-down of the commercial and industrial part of the retail business, and also includes other assumptions and estimates by Reliant Energy.

As previously announced, the Board of Directors is conducting a full review of strategic alternatives to enhance stockholder value. The objective of this process is to consider a full range of possible strategic actions to determine the best alternative for enhancing stockholder value. The possible strategic actions include, but are not limited to, the sale of all or substantially all of Reliant Energy as well as the sale of some or all of our retail business. The outlook does not reflect these possible strategic actions.

The outlook range for open EBITDA is $305 to $355 million, $748 to $823 million and $855 to $930 million for the years ending December 31, 2008, 2009 and 2010, respectively. The outlook range for adjusted EBITDA, which includes the impact of historical and operational wholesale hedges and gains on the sales of assets and emission and exchange allowances, net is $728 to $778 million, $886 to $961 million and $902 to $977 million for the same periods. The outlook range for free cash flow provided by continuing operations is ($46) to $4 million, $440 to $516 million and $578 to $657 million for the years ending December 31, 2008, 2009 and 2010, respectively.

Open EBITDA Outlook Reconciliation
($ millions)		2007A				2008E				2009E				2010E
Income (loss) from continuing operations before income taxes		$	493			($101)–($51)				$605-$680				$484-$559
Unrealized (gains) losses on energy derivatives			(445	)			231				(265	)			(102	)
Western states litigation and similar settlements			22				37				---				---
Debt extinguishments			73				1				---				---
Depreciation and amortization			424				341				326				320
Interest expense, net			315				219				220				200
Adjusted EBITDA		$	882			$728 - $778				$886-$961				$902-$977
Historical and operational wholesale hedges			92				(339	)			(138	)			(47	)
Gains on sales of assets and emission and exchange allowances, net			(26	)			(84	)			---				---
Open EBITDA		$	948			$305 - $355				$748-$823				$855- 930

Free Cash Flow from Continuing Operations Outlook Reconciliation
($ millions)		2007A				2008E				2009E				2010E
Operating cash flow from continuing operations		$	755			$303-$353				$780 - $856				$757-$836
Western states litigation and similar settlements payments			57				37				---				---
Change in margin deposits, net1			(297	)			(26	)			(45	)			(18	)
Adjusted cash flow provided by continuing operations		$	515			$314-$364				$735 -$811				$739-$818
Maintenance capital expenditures			(85	)			(90	)			(65	)			(79	)
Environmental capital expenditures and capitalized interest2			(104	)			(242	)			(154	)			(20	)
Emission and exchange allowances activity, net			(85	)			(24	)			(27	)			(13	)
Preferred stock dividend			---				(4	)			(49	)			(49	)
Free cash flow provided by (used in) continuing operations		$	241			($46)-$4				$440-$516				$578-$657

1.	Outlook does not include obligations for collateral posting related to the unwind of the credit-enhanced retail structure.
2.	Estimate represents the low end of the range.

NON-GAAP FINANCIAL MEASURES

This press release and the attached financial tables include the following non-GAAP financial measures:

Retail gross margin

Retail contribution margin

Open energy gross margin

Open wholesale gross margin

Open wholesale contribution margin

EBITDA

Adjusted EBITDA

Open EBITDA

Adjusted cash flow provided by continuing operations

Free cash flow provided by continuing operations

Gross debt

A reconciliation of these financial measures and the most directly comparable GAAP measures is included above or in the attached financial tables. Additional information regarding these measures, including a discussion of their usefulness and purpose, is included in the Form 8-K furnished along with this press release. Certain factors that could affect GAAP financial measures are not accessible on a forward-looking basis, but could be material to future reported earnings and cash flows.

WEBCAST OF EARNINGS CONFERENCE CALL

Reliant Energy has scheduled its third quarter 2008 earnings conference call for Friday, November 7, 2008, at 7:00 a.m. CT. Interested parties may listen to a live audio broadcast of the conference call at www.reliant.com in the investors section. A replay of the call can be accessed approximately two hours after the completion of the call. A copy of the presentation accompanying the call is also available at this Website address.

Reliant Energy, Inc. (NYSE:RRI) based in Houston, provides electricity and energy services to retail and wholesale customers in the United States. The company provides service to approximately 1.8 million retail electricity customers primarily in Texas, including residential and small business customers. Reliant also serves commercial, industrial, governmental and institutional customers in Delaware, Illinois, Maryland, New Jersey, New York Pennsylvania, and Washington, D.C.

The company is one of the largest independent power producers in the nation with more than 14,000 megawatts of power generation capacity across the United States. These strategically located generating assets use natural gas, fuel oil and coal. For more information, visit http://www.reliant.com. Reliant Energy, Inc. routinely posts all important information on its web site.

This news release contains "forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements that contain projections, estimates or assumptions about our revenues, income, capital structure and other financial items, and our plans and objectives for future operations or about our future economic performance, transactions and dispositions and financings and approvals related thereto. In many cases you can identify forward-looking statements by terminology such as "anticipate," "estimate," "believe," "continue," "could," "intend," "may," "plan," "potential," "predict," "should," "will," "expect," "objective," "projection," "forecast," "goal," "guidance," "outlook," "effort," "target" and other similar words. However, the absence of these words does not mean that the statements are not forward-looking.

Actual results may differ materially from those expressed or implied by forward-looking statements as a result of many factors or events, including, but not limited to, ongoing negotiations with Merrill Lynch and GS Loan Partners, ability to complete the issuance of convertible preferred stock to an affiliate of First Reserve, outcome of strategic alternative review, legislative, regulatory and/or market developments, the outcome of pending lawsuits, governmental proceedings and investigations, the effects of competition, financial market conditions, access to capital, the timing and extent of changes in commodity prices and interest rates, weather conditions and other factors we discuss or refer to in the "Risk Factors” section of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Each forward-looking statement speaks only as of the date of the particular statement and we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Reliant Energy, Inc. and Subsidiaries Consolidated Statements of Operations (Unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2008				2007				2008				2007
		(thousands of dollars, except per share amounts)
Revenues:
Revenues (including $(6,173), $7,205, $(13,130) and $10,927 unrealized gains (losses)) (including $0, $39,805, $253,001 and $39,805 from affiliates)		$	3,738,106			$	3,543,192			$	9,977,065			$	8,555,708
Expenses:
Cost of sales (including $(1,688,016), $(34,719), $(552,571) and $157,443 unrealized gains (losses)) (including $1,234, $37,782, $201,364 and $37,782 from affiliates)			4,899,393				2,838,950				9,059,914				6,758,157
Operation and maintenance			201,987				209,374				643,888				674,081
Selling, general and administrative			114,870				99,796				275,934				290,477
Western states litigation and similar settlements			3,467				-				37,467				22,000
Gains on sales of assets and emission and exchange allowances, net			(16,561	)			(16,769	)			(39,484	)			(18,496	)
Depreciation and amortization			84,228				121,449				261,597				324,021
Total operating expense			5,287,384				3,252,800				10,239,316				8,050,240
Operating Income (Loss)			(1,549,278	)			290,392				(262,251	)			505,468
Other Income (Expense):
Income of equity investment, net			1,405				1,549				2,600				4,075
Debt extinguishments			(594	)			(1,320	)			(1,017	)			(72,589	)
Other, net			4,593				1,590				4,619				2,084
Interest expense			(62,484	)			(74,235	)			(188,815	)			(283,280	)
Interest income			6,259				5,777				26,510				24,473
Total other expense			(50,821	)			(66,639	)			(156,103	)			(325,237	)
Income (Loss) from Continuing Operations Before Income Taxes			(1,600,099	)			223,753				(418,354	)			180,231
Income tax expense (benefit)			(562,208	)			63,850				(110,299	)			41,028
Income (Loss) from Continuing Operations			(1,037,891	)			159,903				(308,055	)			139,203
Income (loss) from discontinued operations			(29	)			2,479				6,035				(1,062	)
Net Income (Loss)		$	(1,037,920	)		$	162,382			$	(302,020	)		$	138,141
Basic Earnings Per Share:
Income (loss) from continuing operations		$	(2.97	)		$	0.47			$	(0.89	)		$	0.41
Income (loss) from discontinued operations			-				-				0.02				(0.01	)
Net income (loss)		$	(2.97	)		$	0.47			$	(0.87	)		$	0.40
Diluted Earnings Per Share:
Income (loss) from continuing operations		$	(2.97	)		$	0.45			$	(0.89	)		$	0.40
Income (loss) from discontinued operations			-				0.01				0.02				(0.01	)
Net income (loss)		$	(2.97	)		$	0.46			$	(0.87	)		$	0.39
Weighted Average Common Shares Outstanding (in thousands):
- Basic			349,200				343,835				347,086				341,768
- Diluted			349,200				354,204				347,086				352,325
Reference is made to Reliant Energy, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2007.

Reliant Energy, Inc. and Subsidiaries Results of Operations by Segment - Adjusted and Open (Unaudited)
		Three Months Ended September 30,												Nine Months Ended September 30,
		2008				2007				Change				2008				2007				Change
		(millions of dollars)
Retail Energy:
Revenues		$	2,778			$	2,608			$	170			$	7,123			$	6,303			$	820
Cost of sales			4,385				2,281				2,104				7,468				5,307				2,161
Unrealized (gains) losses on energy derivatives			1,654				8				1,646				624				(248	)			872
Retail gross margin			47				335				(288	)			279				748				(469	)
Operation and maintenance			67				65				2				190				186				4
Selling and marketing			49				34				15				119				94				25
Bad debt expense			31				30				1				44				68				(24	)
Retail contribution margin			(100	)			206				(306	)			(74	)			400				(474	)
Unrealized gains (losses) on energy derivatives			(1,654	)			(8	)			(1,646	)			(624	)			248				(872	)
Contribution margin, including unrealized gains/losses on energy derivatives (1)			(1,754	)			198				(1,952	)			(698	)			648				(1,346	)
Wholesale Energy:
Revenues		$	1,033			$	1,053			$	(20	)		$	3,057			$	2,598			$	459
Cost of sales			588				675				(87	)			1,797				1,796				1
Historical and operational wholesale hedges			(117	)			17				(134	)			(231	)			80				(311	)
Unrealized (gains) losses on energy derivatives			40				20				20				(58	)			80				(138	)
Open wholesale gross margin			368				415				(47	)			971				962				9
Operation and maintenance			134				144				(10	)			452				489				(37	)
Bad debt expense			-				(1	)			1				1				(2	)			3
Open wholesale contribution margin			234				272				(38	)			518				475				43
Historical and operational wholesale hedges			117				(17	)			134				231				(80	)			311
Unrealized gains (losses) on energy derivatives			(40	)			(20	)			(20	)			58				(80	)			138
Contribution margin, including historical and operational wholesale hedges and unrealized gains/losses on energy derivatives (1)			311				235				76				807				315				492
Other Operations:
Revenues		$	4			$	3			$	1			$	11			$	10			$	1
Cost of sales			-				-				-				-				-				-
Operation and maintenance			3				4				(1	)			7				5				2
Other operations contribution margin (1)			1				(1	)			2				4				5				(1	)
Eliminations:
Revenues		$	(77	)		$	(120	)		$	43			$	(214	)		$	(355	)		$	141
Cost of sales			(74	)			(117	)			43				(205	)			(345	)			140
Operation and maintenance			(2	)			(2	)			-				(5	)			(5	)			-
Total			(1	)			(1	)			-				(4	)			(5	)			1
Consolidated:
Retail contribution margin		$	(100	)		$	206			$	(306	)		$	(74	)		$	400			$	(474	)
Open wholesale contribution margin			234				272				(38	)			518				475				43
Other operations contribution margin			1				(1	)			2				4				5				(1	)
Eliminations			(1	)			(1	)			-				(4	)			(5	)			1
Total			134				476				(342	)			444				875				(431	)
Other general and administrative			(35	)			(36	)			1				(112	)			(131	)			19
Income of equity investment, net			2				1				1				3				4				(1	)
Other, net			4				2				2				4				2				2
Open EBITDA			105				443				(338	)			339				750				(411	)
Historical and operational wholesale hedges			117				(17	)			134				231				(80	)			311
Gains on sales of assets and emission and exchange allowances, net			17				17				-				40				19				21
Adjusted EBITDA			239				443				(204	)			610				689				(79	)
Unrealized gains (losses) on energy derivatives			(1,694	)			(28	)			(1,666	)			(566	)			168				(734	)
Western states litigation and similar settlements			(3	)			-				(3	)			(37	)			(22	)			(15	)
Debt extinguishments			(1	)			(1	)			-				(1	)			(72	)			71
EBITDA			(1,459	)			414				(1,873	)			6				763				(757	)
Depreciation and amortization			(85	)			(122	)			37				(262	)			(324	)			62
Interest expense			(63	)			(74	)			11				(189	)			(283	)			94
Interest income			7				6				1				27				24				3
Income (loss) from continuing operations before income taxes		$	(1,600	)		$	224			$	(1,824	)		$	(418	)		$	180			$	(598	)
(1) Segment profit and loss measure.
Reference is made to Reliant Energy, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2007.

Reliant Energy, Inc. and Subsidiaries Consolidated Balance Sheets (Unaudited)
		September 30, 2008				December 31, 2007
ASSETS		(thousands of dollars)
Current Assets:
Cash and cash equivalents		$	793,857			$	754,962
Restricted cash			5,956				3,251
Accounts and notes receivable, principally customer, net of allowance of $42,780 and $36,724			1,257,036				1,082,746
Inventory			325,620				285,408
Derivative assets			804,184				663,049
Margin deposits			135,308				139,834
Accumulated deferred income taxes			189,559				114,559
Investment in and receivables from Channelview, net			61,442				83,253
Prepayments and other current assets			132,378				104,314
Assets held for sale			446,458				-
Current assets of discontinued operations			-				2,133
Total current assets			4,151,798				3,233,509
Property, plant and equipment, gross			6,604,285				6,852,170
Accumulated depreciation			(1,756,344	)			(1,629,953	)
Property, Plant and Equipment, net			4,847,941				5,222,217
Other Assets:
Goodwill, net			357,490				379,644
Other intangibles, net			389,381				405,338
Derivative assets			340,423				376,535
Prepaid lease			288,132				270,133
Accumulated deferred income taxes			175,395				70,410
Other ($36,991 and $29,016 accounted for at fair value)			204,824				234,014
Total other assets			1,755,645				1,736,074
Total Assets		$	10,755,384			$	10,191,800
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt and short-term borrowings		$	12,193			$	52,546
Accounts payable, principally trade			820,319				687,046
Derivative liabilities			1,279,446				885,346
Margin deposits			7,100				250
Other			513,253				426,839
Liabilities held for sale			62,483				-
Current liabilities of discontinued operations			2,952				-
Total current liabilities			2,697,746				2,052,027
Other Liabilities:
Derivative liabilities			695,063				473,516
Other			244,897				278,641
Long-term liabilities of discontinued operations			3,542				3,542
Total other liabilities			943,502				755,699
Long-term Debt			2,874,785				2,902,346
Commitments and Contingencies
Temporary Equity Stock-based Compensation			7,121				4,694
Stockholders' Equity:
Preferred stock; par value $0.001 per share (125,000,000 shares authorized; none outstanding)			-				-
Common stock; par value $0.001 per share (2,000,000,000 shares authorized; 349,770,636 and 344,579,508 issued)			111				106
Additional paid-in capital			6,237,692				6,215,512
Accumulated deficit			(1,937,546	)			(1,635,526	)
Accumulated other comprehensive loss			(68,027	)			(103,058	)
Total stockholders' equity			4,232,230				4,477,034
Total Liabilities and Equity		$	10,755,384			$	10,191,800
Reference is made to Reliant Energy, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2007.

Reliant Energy, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited)
			Nine Months Ended September 30,
			2008				2007
			(thousands of dollars)
Cash Flows from Operating Activities:
Net income (loss)			$	(302,020	)		$	138,141
(Income) loss from discontinued operations				(6,035	)			1,062
Net income (loss) from continuing operations				(308,055	)			139,203
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities:
Depreciation and amortization				261,597				324,021
Deferred income taxes				(140,798	)			25,246
Net changes in energy derivatives				589,054				(126,819	)
Amortization of deferred financing costs				6,446				47,817
Gains on sales of assets and emission and exchange allowances, net				(39,484	)			(18,496	)
Debt extinguishments				1,017				72,589
Income of equity investment, net				(2,600	)			(4,075	)
Western states litigation and similar settlements				37,467				-
Other, net				(361	)			8,909
Changes in other assets and liabilities:
Accounts and notes receivable, net				(187,077	)			(368,989	)
Change in notes, receivables and payables with affiliates, net				4,183				(4,225	)
Inventory				(42,484	)			(6,117	)
Margin deposits, net				11,376				200,928
Net derivative assets and liabilities				(37,845	)			(30,949	)
Western states litigation and similar settlements payments				-				(35,000	)
Accounts payable				107,675				172,789
Other current assets				(16,384	)			(14,586	)
Other assets				(2,902	)			(35,155	)
Taxes payable/receivable				11,852				(12,334	)
Other current liabilities				16,648				6,352
Other liabilities				(8,683	)			(9,168	)
Net cash provided by continuing operations from operating activities				260,642				331,941
Net cash provided by (used in) discontinued operations from operating activities				7,459				(3,754	)
Net cash provided by operating activities				268,101				328,187
Cash Flows from Investing Activities:
Capital expenditures				(215,695	)			(135,473	)
Proceeds from sales of assets, net				18,429				30,380
Proceeds from sales of emission and exchange allowances				38,685				6,794
Purchases of emission allowances				(26,053	)			(52,160	)
Restricted cash				(2,705	)			4,716
Other, net				3,312				5,295
Net cash used in continuing operations from investing activities				(184,027	)			(140,448	)
Net cash provided by discontinued operations from investing activities				-				520
Net cash used in investing activities				(184,027	)			(139,928	)
Cash Flows from Financing Activities:
Payments of long-term debt				(57,704	)			(1,497,887	)
Proceeds from long-term debt				-				1,300,000
Increase in short-term borrowings and revolving credit facilities, net				-				6,554
Payments of financing costs				-				(31,245	)
Payments of debt extinguishments				(1,017	)			(72,589	)
Proceeds from issuances of stock				13,542				39,401
Net cash used in financing activities				(45,179	)			(255,766	)
Net Change in Cash and Cash Equivalents				38,895				(67,507	)
Cash and Cash Equivalents at Beginning of Period				754,962				463,909
Cash and Cash Equivalents at End of Period			$	793,857			$	396,402
Free Cash Flow Reconciliation (Unaudited)
			Nine Months Ended September 30,
			2008				2007
			(millions of dollars)
Operating cash flow from continuing operations			$	261			$	332
Western states litigation and similar settlements payments				-				57
Change in margin deposits, net				(11	)			(201	)
Adjusted cash flow provided by continuing operations				250				188
Capital expenditures				(216	)			(135	)
Proceeds from sales of emission and exchange allowances				39				7
Purchases of emission allowances				(26	)			(52	)
Free cash flow provided by continuing operations			$	47			$	8
Reference is made to Reliant Energy, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2007.

Reliant Energy, Inc. and Subsidiaries Retail Energy Data (Unaudited)
		Three Months Ended September 30,									Nine Months Ended September 30,
		2008			2007			Change			2008			2007			Change
		(in millions)									(in millions)
Mass gross margin		$	30		$	244		$	(214)		$	225		$	595		$	(370)
Commercial and industrial gross margin			(5)			101			(106)			57			163			(106)
Market usage adjustments			22			(10)			32			(3)			(10)			7
Retail gross margin			47			335			(288)			279			748			(469)
Operation and maintenance			(67)			(65)			(2)			(190)			(186)			(4)
Selling and marketing			(49)			(34)			(15)			(119)			(94)			(25)
Bad debt expense			(31)			(30)			(1)			(44)			(68)			24
Retail contribution margin			(100)			206			(306)			(74)			400			(474)
Unrealized gains (losses) on energy derivatives			(1,654)			(8)			(1,646)			(624)			248			(872)
Total retail energy contribution margin, including unrealized gains/losses on energy derivatives (1)		$	(1,754)		$	198		$	(1,952)		$	(698)		$	648		$	(1,346)
		Three Months Ended September 30,									Nine Months Ended September 30,
		2008			2007						2008			2007
		(gigawatt hours)									(gigawatt hours)
Electricity Sales to End-Use Retail Customers:
Mass:
Residential:
Houston			4,113			4,740						10,012			10,848
Non-Houston			2,692			2,774						6,482			6,622
Small Business:
Houston			817			926						2,160			2,421
Non-Houston			450			467						1,111			1,127
Total Mass			8,072			8,907						19,765			21,018
Commercial and Industrial:
ERCOT (2)			9,768			10,491						28,254			27,601
Non-ERCOT			1,901			1,364						4,716			3,472
Total Commercial and Industrial			11,669			11,855						32,970			31,073
Market usage adjustments			47			12						(50)			(68)
Total			19,788			20,774						52,685			52,023
		Three Months Ended September 30,									Nine Months Ended September 30,
		2008			2007						2008			2007
		(in thousands, metered locations)									(in thousands, metered locations)
Weighted Average Retail Customer Count:
Mass:
Residential:
Houston			995			1,052						996			1,067
Non-Houston			552			571						546			564
Small Business:
Houston			109			115						109			117
Non-Houston			40			37						39			35
Total Mass			1,696			1,775						1,690			1,783
Commercial and Industrial (2)			89			91						91			88
Total			1,785			1,866						1,781			1,871
		September 30,			December 31,
		2008			2007
		(in thousands, metered locations)
Retail Customers:
Mass:
Residential:
Houston			986			1,016
Non-Houston			552			555
Small Business:
Houston			109			109
Non-Houston			41			38
Total Mass			1,688			1,718
Commercial and Industrial (2)			89			93
Total			1,777			1,811
(1) Retail energy segment profit and loss measure.
(2) Includes customers of the Texas General Land Office for whom we provide services.
Reference is made to Reliant Energy, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2007.

Reliant Energy, Inc. and Subsidiaries Wholesale Energy Data (Unaudited)
		Three Months Ended September 30,															Nine Months Ended September 30,
		2008								2007							2008									2007
		GWh				% Economic (1)				GWh				% Economic (1)			GWh					% Economic (1)				GWh				% Economic (1)
Economic Generation (2) (3):
PJM Coal			4,838.2				66	%			5,973.6			82	%			16,118.7					74	%			18,100.9			83	%
MISO Coal			938.3				34	%			1,941.8			70	%			4,346.0					52	%			6,186.5			75	%
PJM/MISO Gas			766.0				9	%			775.1			11	%			1,178.8					5	%			1,189.1			6	%
West			1,405.9				20	%			2,303.5			33	%			1,952.9					9	%			3,211.0			16	%
Other			63.5				3	%			1,021.5			38	%			70.4					2	%			3,771.7			55	%
Total			8,011.9				29	%			12,015.5			45	%			23,666.8					31	%			32,459.2			41	%
Commercial Capacity Factor (4):
PJM Coal			89.9	%							89.5	%						86.0	%								81.5	%
MISO Coal			94.7	%							85.7	%						84.3	%								65.6	%
PJM/MISO Gas			90.2	%							93.0	%						90.8	%								90.7	%
West			96.9	%							96.7	%						93.9	%								96.3	%
Other			81.7	%							93.1	%						81.7	%								91.8	%
Total			91.6	%							90.8	%						86.6	%								81.5	%
Generation (3):		GWh								GWh							GWh									GWh
PJM Coal			4,349.3								5,345.4							13,864.4									14,752.9
MISO Coal			888.5								1,664.1							3,664.6									4,059.1
PJM/MISO Gas			690.9								721.0							1,070.6									1,078.6
West			1,361.7								2,228.2							1,834.0									3,091.9
Other			51.9								951.3							57.5									3,464.0
Total			7,342.3								10,910.0							20,491.1									26,446.5
Open Energy Unit Margin ($/MWh) (5):
PJM Coal		$	29.66							$	31.05						$	33.25								$	31.45
MISO Coal			21.38								29.45							25.65									29.07
PJM/MISO Gas			28.95								38.83							37.36									35.23
West			5.14								12.57							NM		(6	)						7.76
Other			19.27								9.46							17.39									6.64
Weighted average total		$	23.97							$	25.66						$	29.04								$	25.22
		Three Months Ended September 30,															Nine Months Ended September 30,
		2008				2007				Change							2008					2007				Change
Open energy gross margin (7):		(in millions)															(in millions)
PJM Coal		$	129			$	166			$	(37	)					$	461				$	464			$	(3	)
MISO Coal			19				49				(30	)						94					118				(24	)
PJM/MISO Gas			20				28				(8	)						40					38				2
West			7				28				(21	)						(1	)				24				(25	)
Other			1				9				(8	)						1					23				(22	)
Total			176				280				(104	)						595					667				(72	)
Other margin (8):
PJM Coal			40				20				20							84					42				42
MISO Coal			13				6				7							18					11				7
PJM/MISO Gas			46				43				3							106					79				27
West			83				48				35							139					107				32
Other			10				18				(8	)						29					56				(27	)
Total			192				135				57							376					295				81
Open wholesale gross margin			368				415				(47	)						971					962				9
Operation and maintenance			(134	)			(144	)			10							(452	)				(489	)			37
Bad debt expense			-				1				(1	)						(1	)				2				(3	)
Open wholesale contribution margin			234				272				(38	)						518					475				43
Historical and operational wholesale hedges
Power			(18	)			(48	)			30							(53	)				(159	)			106
Fuel			117				14				103							249					24				225
Tolling/Other			18				17				1							35					55				(20	)
Total historical and operational wholesale hedges			117				(17	)			134							231					(80	)			311
Unrealized gains (losses) on energy derivatives			(40	)			(20	)			(20	)						58					(80	)			138
Total wholesale energy contribution margin, including historical and operational wholesale hedges and unrealized gains/losses on energy derivatives (9)		$	311			$	235			$	76						$	807				$	315			$	492
(1) Represents economic generation (hours) divided by maximum generation hours (maximum plant capacity multiplied by 8,760 hours).
(2) Estimated generation at 100% plant availability based on an hourly analysis of when it is economical to generate based on the price of power, fuel, emission allowances and variable operating costs.
(3) Excludes generation related to power purchase agreements, including tolling agreements.
(4) Generation divided by economic generation.
(5) Represents open energy gross margin divided by generation.
(6) NM is not meaningful.
(7) Open energy gross margin is calculated using the power sales prices received by the plants less delivered spot fuel prices. This figure excludes the effects of other margin, our historical and operational wholesale hedges and unrealized gains/losses on energy derivatives.
(8) Other margin represents power purchase agreements, capacity payments, ancillary services revenues and selective commercial hedge strategies.
(9) Wholesale energy segment profit and loss measure.
Reference is made to Reliant Energy, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2007.

Reliant Energy, Inc. and Subsidiaries PJM Coal and MISO Coal (Unaudited)
		Capacity		Heat Rate		Q3 economic generation (GWh)				Q3 commercial capacity factor						Q3 generation (GWh)
Unit Name (1)		(MW)		(MMBtu/MWh)		2008		2007		2008			2007			2008		2007
Cheswick		580		10.0		489.0		903.9		96.3	%		90.2	%		471.0		815.6
Conemaugh (2)		280		9.4		551.8		606.9		89.1	%		93.4	%		491.7		566.7
Elrama		460		11.3		145.1		682.9		87.5	%		70.7	%		127.0		482.9
Keystone (2)		282		9.5		606.4		606.1		97.5	%		95.2	%		591.3		577.2
Portland		401		9.8		608.1		688.9		89.7	%		94.8	%		545.4		653.0
Seward		521		9.6		1,088.0		1,076.5		88.3	%		95.6	%		960.9		1,029.0
Shawville (2)		597		10.3		1,050.7		1,007.4		83.0	%		84.8	%		871.7		854.4
Titus		243		10.8		299.1		401.0		97.1	%		91.4	%		290.3		366.6
PJM Coal Total		3,364				4,838.2		5,973.6		89.9	%		89.5	%		4,349.3		5,345.4
		Capacity		Heat Rate		Q3 economic generation (GWh)				Q3 commercial capacity factor						Q3 generation (GWh)
Unit Name (1)		(MW)		(MMBtu/MWh)		2008		2007		2008			2007			2008		2007
Avon Lake		721		9.3		487.7		1,161.1		99.9	%		82.7	%		487.3		960.8
New Castle		328		10.6		259.7		443.0		96.8	%		91.7	%		251.4		406.4
Niles		216		10.5		190.9		337.7		78.5	%		87.9	%		149.8		296.9
MISO Coal Total		1,265				938.3		1,941.8		94.7	%		85.7	%		888.5		1,664.1
		Capacity		Heat Rate		Q3 YTD economic generation (GWh)				Q3 YTD commercial capacity factor						Q3 YTD generation (GWh)
Unit Name (1)		(MW)		(MMBtu/MWh)		2008		2007		2008			2007			2008		2007
Cheswick		580		10.0		1,929.5		2,788.0		94.1	%		78.0	%		1,816.0		2,174.1
Conemaugh (2)		280		9.4		1,727.8		1,793.4		88.9	%		86.9	%		1,535.6		1,559.0
Elrama		460		11.3		1,211.4		2,294.8		83.1	%		68.1	%		1,007.0		1,561.9
Keystone (2)		282		9.5		1,810.5		1,788.6		98.1	%		86.1	%		1,776.2		1,539.5
Portland		401		9.8		2,011.7		2,045.4		76.4	%		80.2	%		1,536.6		1,640.5
Seward		521		9.6		3,251.6		3,195.5		81.8	%		77.3	%		2,658.3		2,469.9
Shawville (2)		597		10.3		3,143.0		3,061.9		83.6	%		90.3	%		2,628.3		2,763.7
Titus		243		10.8		1,033.2		1,133.3		87.7	%		92.1	%		906.4		1,044.3
PJM Coal Total		3,364				16,118.7		18,100.9		86.0	%		81.5	%		13,864.4		14,752.9
		Capacity		Heat Rate		Q3 YTD economic generation (GWh)				Q3 YTD commercial capacity factor						Q3 YTD generation (GWh)
Unit Name (1)		(MW)		(MMBtu/MWh)		2008		2007		2008			2007			2008		2007
Avon Lake		721		9.3		2,432.0		3,663.3		83.6	%		55.6	%		2,033.3		2,036.7
New Castle		328		10.6		1,063.1		1,442.2		88.9	%		73.9	%		945.4		1,066.0
Niles		216		10.5		850.9		1,081.0		80.6	%		88.5	%		685.9		956.4
MISO Coal Total		1,265				4,346.0		6,186.5		84.3	%		65.6	%		3,664.6		4,059.1
(1) Unless otherwise indicated, the Company owns a 100% interest in each facility listed.
(2) The Company leases a 100% interest in the Shawville facility, a 16.67% interest in the Keystone facility and a 16.45% interest in the Conemaugh facility under facility interest lease agreements, which expire in 2026, 2034 and 2034, respectively.
Reference is made to Reliant Energy, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2007.

Reliant Energy, Inc. and Subsidiaries PJM/MISO Gas (Unaudited)
		Capacity		Heat Rate		Q3 economic generation (GWh)				Q3 commercial capacity factor						Q3 generation (GWh)
Unit Name (1)		(MW)		(MMBtu/MWh)		2008		2007		2008			2007			2008		2007
Aurora (2)		878		10.5		23.1		35.5		100.0	%		99.2	%		23.1		35.2
Blossburg		19		14.6		0.7		1.8		100.0	%		100.0	%		0.7		1.8
Brunot Island		289		10.4		0.8		5.1		100.0	%		88.2	%		0.8		4.5
Gilbert		536		11.0		18.1		23.6		100.0	%		73.7	%		18.1		17.4
Glen Gardner		160		14.6		0.5		3.7		100.0	%		78.4	%		0.5		2.9
Hamilton		20		14.8		0.1		0.2		100.0	%		100.0	%		0.1		0.2
Hunterstown		60		14.8		1.1		2.4		100.0	%		100.0	%		1.1		2.4
Hunterstown CCGT		810		7.0		709.1		635.9		89.7	%		93.1	%		635.8		591.9
Mountain		40		14.3		1.6		7.4		100.0	%		100.0	%		1.6		7.4
Orrtanna		20		14.4		0.2		1.0		100.0	%		100.0	%		0.2		1.0
Portland		169		11.2		0.9		4.3		100.0	%		83.7	%		0.9		3.6
Sayreville		224		13.8		5.4		6.0		68.5	%		95.0	%		3.7		5.7
Shawnee		20		14.0		-		0.2		0.0	%		100.0	%		-		0.2
Shawville 5-7 (3)		6		10.2		-		-		0.0	%		0.0	%		-		-
Titus		31		17.4		-		-		0.0	%		0.0	%		-		-
Tolna		40		14.2		0.7		2.3		100.0	%		100.0	%		0.7		2.3
Warren		68		12.8		-		-		0.0	%		0.0	%		-		-
Werner		212		13.8		1.8		5.2		94.4	%		78.8	%		1.7		4.1
Shelby		356		9.8		1.9		40.5		100.0	%		99.8	%		1.9		40.4
PJM/MISO Gas Total		3,958				766.0		775.1		90.2	%		93.0	%		690.9		721.0
		Capacity		Heat Rate		Q3 YTD economic generation (GWh)				Q3 YTD commercial capacity factor						Q3 YTD generation (GWh)
Unit Name (1)		(MW)		(MMBtu/MWh)		2008		2007		2008			2007			2008		2007
Aurora (2)		878		10.5		34.4		51.1		100.0	%		85.1	%		34.4		43.5
Blossburg		19		14.6		7.9		5.8		92.4	%		100.0	%		7.3		5.8
Brunot Island		289		10.4		2.1		8.8		100.0	%		93.2	%		2.1		8.2
Gilbert		536		11.0		36.8		50.2		100.0	%		72.3	%		36.8		36.3
Glen Gardner		160		14.6		3.0		5.9		86.7	%		86.4	%		2.6		5.1
Hamilton		20		14.8		0.4		2.0		100.0	%		100.0	%		0.4		2.0
Hunterstown		60		14.8		2.6		7.6		100.0	%		98.7	%		2.6		7.5
Hunterstown CCGT		810		7.0		1,016.3		938.7		90.8	%		91.6	%		922.9		859.6
Mountain		40		14.3		5.3		12.8		100.0	%		100.0	%		5.3		12.8
Orrtanna		20		14.4		0.5		3.9		100.0	%		100.0	%		0.5		3.9
Portland		169		11.2		10.3		11.1		100.0	%		94.6	%		10.3		10.5
Sayreville		224		13.8		44.2		11.3		71.7	%		57.5	%		31.7		6.5
Shawnee		20		14.0		0.1		0.3		100.0	%		100.0	%		0.1		0.3
Shawville 5-7 (3)		6		10.2		-		-		0.0	%		0.0	%		-		-
Titus		31		17.4		-		-		0.0	%		0.0	%		-		-
Tolna		40		14.2		1.7		6.3		100.0	%		100.0	%		1.7		6.3
Warren		68		12.8		-		-		0.0	%		0.0	%		-		-
Werner		212		13.8		9.4		14.6		86.2	%		84.9	%		8.1		12.4
Shelby		356		9.8		3.8		58.7		100.0	%		98.6	%		3.8		57.9
PJM/MISO Gas Total		3,958				1,178.8		1,189.1		90.8	%		90.7	%		1,070.6		1,078.6
(1) Unless otherwise indicated, the Company owns a 100% interest in each facility listed.
(2) Excludes generation during periods the unit operated under power purchase agreements.
(3) The Company leases a 100% interest in the Shawville facility under a facility interest lease agreement, which expires in 2026.
Reference is made to Reliant Energy, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2007.

Reliant Energy, Inc. and Subsidiaries West and Other (Unaudited)
		Capacity		Heat Rate		Q3 economic generation (GWh)				Q3 commercial capacity factor						Q3 generation (GWh)
Unit Name (1)		(MW)		(MMBtu/MWh)		2008		2007		2008			2007			2008		2007
Bighorn (2)		598		7.2		582.3		919.9		94.8	%		99.9	%		552.2		918.8
Coolwater		622		10.1		189.0		387.5		96.8	%		96.5	%		182.9		373.9
Ellwood (3)		54		13.3		-		-		0.0	%		0.0	%		-		-
Etiwanda (3)		640		10.0		-		-		0.0	%		0.0	%		-		-
Mandalay (3)		560		10.9		219.3		260.5		97.3	%		88.6	%		213.3		230.8
Ormond Beach		1,516		9.6		415.3		735.6		99.5	%		95.8	%		413.3		704.7
West Total		3,990				1,405.9		2,303.5		96.9	%		96.7	%		1,361.7		2,228.2
		Capacity		Heat Rate		Q3 economic generation (GWh)				Q3 commercial capacity factor						Q3 generation (GWh)
Unit Name (1)		(MW)		(MMBtu/MWh)		2008		2007		2008			2007			2008		2007
Channelview (4)		830		6.1		-		784.8		0.0	%		99.9	%		-		784.4
Choctaw		800		7.0		62.9		236.7		81.6	%		70.5	%		51.3		166.9
Indian River (3)		587		10.5		-		-		0.0	%		0.0	%		-		-
Osceola (3)		470		11.0		0.6		-		100.0	%		0.0	%		0.6		-
Other Total		2,687				63.5		1,021.5		81.7	%		93.1	%		51.9		951.3
		Capacity		Heat Rate		Q3 YTD economic generation (GWh)				Q3 YTD commercial capacity factor						Q3 YTD generation (GWh)
Unit Name (1)		(MW)		(MMBtu/MWh)		2008		2007		2008			2007			2008		2007
Bighorn (2)		598		7.2		582.8		1,437.0		94.8	%		99.9	%		552.7		1,435.8
Coolwater		622		10.1		363.3		524.2		90.9	%		96.4	%		330.3		505.5
Ellwood (3)		54		13.3		-		-		0.0	%		0.0	%		-		-
Etiwanda (3)		640		10.0		-		-		0.0	%		0.0	%		-		-
Mandalay (3)		560		10.9		381.0		380.6		96.0	%		92.0	%		365.8		350.3
Ormond Beach		1,516		9.6		625.8		869.2		93.5	%		92.1	%		585.2		800.3
West Total		3,990				1,952.9		3,211.0		93.9	%		96.3	%		1,834.0		3,091.9
		Capacity		Heat Rate		Q3 YTD economic generation (GWh)				Q3 YTD commercial capacity factor						Q3 YTD generation (GWh)
Unit Name (1)		(MW)		(MMBtu/MWh)		2008		2007		2008			2007			2008		2007
Channelview (4)		830		6.1		-		3,520.1		0.0	%		93.2	%		-		3,282.3
Choctaw		800		7.0		66.9		250.6		80.7	%		72.1	%		54.0		180.7
Indian River (3)		587		10.5		-		-		0.0	%		0.0	%		-		-
Osceola (3)		470		11.0		3.5		1.0		100.0	%		100.0	%		3.5		1.0
Other Total		2,687				70.4		3,771.7		81.7	%		91.8	%		57.5		3,464.0
(1) Unless otherwise indicated, the Company owns a 100% interest in each facility listed.
(2) Bighorn facility was sold in October 2008.
(3) Excludes generation during periods the unit operated under power purchase agreements.
(4) Channelview was deconsolidated on August 20, 2007 and the Channelview facility was sold on July 1, 2008.
Reference is made to Reliant Energy, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2007.

Reliant Energy, Inc. and Subsidiaries Capital Expenditures Forecast (Unaudited)
	2008E			2009E			2010E
	(in millions)
Maintenance capital expenditures:
Retail energy	$	26		$	13		$	13
Wholesale energy		43			37			51
Other operations		21			15			15
		90			65			79
Environmental (1)		225			124			18
Capitalized interest		17			30			2
Total capital expenditures	$	332		$	219		$	99
(1) Estimate represents the low end of the range.

Reliant Energy, Inc. and Subsidiaries Gross Debt (Unaudited)
		September 30, 2008
		(in millions)
Debt:
Senior secured revolver		$	-
Senior secured notes			667
Senior unsecured notes			1,300
Orion Power 12% notes (1)			420
PEDFA fixed-rate bonds for Seward plant			500
Warrants			(1	)
Other (2)			1
Total GAAP debt			2,887
REMA operating leases (off-balance sheet)			443
Gross Debt (3)		$	3,330
(1) Orion 12% notes include purchase accounting adjustments of $20 million.
(2) Other subsidiary debt.
(3) Gross debt includes off-balance sheet REMA leases of $443 million.