Fitch: Channelview Bankruptcy Does Not Affect Ratings of Reliant Energy, Inc

Business Wire, August 20, 2007

CHICAGO -- The filing for bankruptcy protection by Reliant Energy's Inc.'s (NYSE:RRI) Channelview subsidiaries does not affect the company's ratings (Issuer Default Rating (IDR) 'B') or Stable Rating Outlook. The Channelview subsidiary consists of an 830mw gas-fired baseload facility located in the Houston zone of ERCOT. There was approximately $342 million non-recourse, project-level debt outstanding of as of June 30, 2007.

The project had never generated dividends for RRI, because the conditions for distribution in its debt covenants were never met. Therefore, the bankruptcy has no effect on the cash flow supporting debt at the RRI level. The Channelview asset did not guarantee any of RRI's secured debt, although Fitch did consider the residual value of the plant in its recovery analysis. Fitch does not expect the bankruptcy to affect the recovery rating of RRI's debt.

RRI's current ratings reflect the uncertainty of operating cash flows generated by an unhedged merchant portfolio and a retail business facing increased competition.

Reliant Energy, Inc.

--Issuer Default Rating (IDR) 'B';

--Senior secured debt 'BB/RR1';

--Senior unsecured debt 'B /RR2'.

Fitch's Recovery Ratings (RR) are a relative indicator of creditor recovery prospects on a given obligation within an issuers' capital structure in the event of a default.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.