Prior to our meeting, I wanted to explain some of the background to what
we are attempting to do here. Since surety companies cannot issue bonds in
the form of financial guarantees, we have worked with our surety companies
so that they feel comfortable that the bonds do not fit this category. Our
sureties have agreed to issue bonds as a partial guarantee to individual
Confirmation letters. There will be separate bonds for each individual
Confirmation Letter.The bonds will run for an annual term or, in the case
of Firemens Fund, up to a two year term.  We worked with the sureties to
develop a bond form that would specifically tie back into individual
Confirmation letters so as to enable the sureties to approve the bond as a
performance guarantee (based on the guarantee of the actual supply of
power), not a financial guarantee, and to carve the individual Confirmation
letters out of the Master Power Purchase Contract.  This was done because
the sureties were unwilling and/or unable to bond the Master Power Purchase
Agreement due to its language and extremely broad scope.The individual
transactions that were to be bonded each had specific performance
obligations and we planned to bond each of these transactions individually.

The sureties have approved the form of bond that we had provided, and we
would like to keep changes to the bond form itself to a minimum.

If you see any issues with the above, please give me a call before 2 today.
Thanks.



Janet K. Greene
Reliant Resources, Inc.
1111 Louisiana, Suite 4300
Houston, TX 77002
713-207-5732
fax: 713-207-0141
jkgreene@reliant.com
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