Acquisition

Centrica PLC
25 February 2002

25th February 2002




  Centrica's acquisition of NewPower delivers further growth in key US states




             Provides combined business with strengthened platform

                  from which to deliver its customer strategy




Centrica announced today that it has signed an agreement to acquire NewPower
Holdings, Inc. (NYSE:NPW) (NewPower) through a tender offer for all of
NewPower's outstanding shares, for $1.05 per share in cash which in total
amounts to approximately $130 million (£87 million), subject to adjustment as
explained below. The acquisition is expected to add approximately 650,000
customers to Centrica's North American customer base.

NewPower is the leading retailer of gas and electricity in deregulated U.S.
markets, serving residential and small business customers in states including
Georgia, New Jersey, Ohio, Pennsylvania and Texas.

This acquisition, which is a further key step in Centrica's North American
strategy, follows the January 28th announcement that Centrica has agreed to
acquire Enbridge Services Inc. with 1.3 million home and business services
customers in Canada. After both transactions are completed, and after the
Ontario electricity market opens as scheduled in May, Centrica will have around
4.3 million customer relationships with North American households.

The combined business provides a strengthened platform for further growth in
Centrica's key target markets, including Texas, Michigan, Ohio and Georgia and
significantly enhances Centrica's market analysis and entry capabilities in
other U.S. states. Centrica's focus on the provision of excellent value and
service to its customers will also be further supported by its position as the
leading energy retailer in deregulated North American markets.

Centrica's Chief Executive, Roy Gardner, said: 'We are very pleased to have
reached this agreement with NewPower, which helps us achieve critical mass in
our target markets in the U.S. This is a tremendous opportunity to combine our
sales and marketing skills with the expertise that NewPower brings and we
believe there are significant operational and cost synergies to be gained. This
transaction, together with our agreement to acquire Enbridge Services Inc in
Canada and the business of Enron Direct Limited in the UK, demonstrates
Centrica's ability to leverage its considerable financial strengths to gain
market leadership and seize profitable growth opportunities as they arise.'

NewPower reported revenues of $369.9 million and net losses of $212.8 million
before non-recurring items for the year ended December 31, 2001 and net assets
of $246 million as at December 31, 2001. NewPower's net losses in part reflect
the early stage of its business development, as operating expenses and
infrastructure investments have substantially exceeded gross profits. NewPower's
performance was also adversely affected in 2001 by operational and switching
delays in the Texas market which, combined with volatile energy trading
conditions left NewPower with commitments to purchase commodity at prices well
in excess of subsequent market levels. The volatility also reduced the credit
available to NewPower in the market.

NewPower's key strengths include its marketing, customer billing and care
operations and its strong regulatory relationships in key markets.

As part of Centrica, the profitability of the NewPower business is expected to
improve due to energy market volatility risk mitigation measures to be
undertaken by Centrica, substantially reduced infrastructure investment, a focus
on profitable customer relationships and the realisation of synergies believed
by Centrica's management to be in excess of $25 million per annum. Centrica
expects the acquisition to be slightly dilutive to EPS and cash flow in 2002 and
2003 and to contribute to EPS and cash flow in 2004.

NewPower Chairman and Chief Executive Officer, H. Eugene Lockhart, said:
'NewPower was formed to capitalise on the long-term opportunity presented by
energy deregulation in the U.S., and we have made great strides in doing so. We
are delighted that Centrica recognizes the market potential which we can now
pursue together to serve our customers from a position of far greater stability
and financial strength.'

Centrica expects to commence a tender offer within one week to acquire all of
the outstanding shares of NewPower. The boards of directors of both Centrica and
NewPower have approved the transaction. Centrica has more than 50% of the fully
diluted shares of NewPower committed to acceptance under contractually binding
Stockholders' Agreements but, in the case of the Enron interests, this is
subject to bankruptcy court approval.

The transaction is also subject to customary conditions, including with respect
to the Hart Scott Rodino Anti-Trust Act, approvals by the Federal Energy
Regulatory Commission and certain other regulatory agencies, and approval of the
bankruptcy court overseeing Enron's Chapter 11 bankruptcy proceedings of the
settlement of certain liabilities between NewPower and Enron, the termination of
inter company agreements and the issuance of an injunction restraining third
parties from making claims against New Power in respect of Enron-related
liabilities.

The price per share that will ultimately be paid to NewPower shareholders is
subject to a price adjustment mechanism based on changes in the projected
forward price curves for electricity and gas between the signing of the merger
agreement and the date upon which the tender offer price is fixed, in order to
offset any changes in the value of NewPower's commodity position. Following such
price adjustment, if the calculated price falls outside the range $0.80 to $1.30
per share, then Centrica and NewPower have certain predefined rights not to
complete the transaction. In addition to the equity consideration described
above, Centrica and NewPower will also pay transaction costs of $13 million and
other related costs totalling approximately $65 million as described below.
These costs are expected to be largely offset by the anticipated restricted and
unrestricted cash balances that will be held by NewPower on completion of the
transaction.

Enquiries:

Centrica Investor Relations:           01753 494900

Centrica Media Relations:              01753 494085



Notes to editors:

 1. The additional costs of approximately $65 million that Centrica and NewPower
    expect to pay include existing contractual commitments to certain NewPower
    executives, other severance costs and other general related liabilities
    arising as a result of the transaction.
 2. NewPower reported a customer base of over 800,000 (including pending)
    customers at 31 December 2001. Further it has notified PECO Energy Company
    that it intends to return competitive default service customers to PECO. The
    prospective profitability of these customers is limited, given the necessity
    of load serving entities such as NewPower to purchase installed capacity
    (ICAP) requirements. Centrica expects to acquire 650,000 customers at
    completion of this transaction.
 3. At the end of 2001, customers in 17 states in the U.S. had access to some
    form of energy choice programme. Centrica's strategy is to focus on those
    states that have regulatory and pricing regimes offering the opportunity to
    create profitable retail businesses. Current target markets in the U.S.
    include Texas, Georgia, Michigan and Ohio and further opportunities are
    expected to open up during the course of the year in other MidWest and
    NorthEast states. Centrica expects to be addressing a viable market of over
    20 million households in the United States by the end of 2002.



About NewPower Holdings, Inc.

NewPower Holdings, Inc. (NYSE: NPW), through its subsidiary, NewPower, is the
first national provider of electricity and natural gas to residential and small
commercial customers in the United States. The Company offers consumers in
restructured retail energy markets competitive energy prices, pricing choices,
improved customer service and other innovative products, services and
incentives.

About Centrica

Since its formation in 1997, Centrica has developed into a leading provider of
energy and other essential services. In the UK, Centrica offers energy supply
and related products under the British Gas brand, roadside and financial
services from the AA, telecoms products and services through One.Tel and British
Gas and financial services from Goldfish.

The group's strategy of international expansion took a significant step forward
in August 2000 with the acquisition of Toronto based Direct Energy, North
America's largest unregulated retailer of natural gas at that time. Centrica is
also active in six states in the U.S. through the Energy America brand, which it
acquired in January 2001.

Centrica currently supplies gas to 1.3 million customers across North America
under the Direct Energy and Energy America brands, making it the largest
unregulated energy supplier. In addition, 600,000 customers have already signed
up with Direct Energy in anticipation of the opening of the Ontario electricity
market scheduled in May 2002.

In June 2001, Centrica also assumed full ownership of GreenSource Limited, a
company providing access to a network of private gas servicing and installation
contracting firms in Ontario. This was followed in January 2002 by the
announcement that it had reached agreement to acquire Enbridge Services Inc.
which more than doubled the customer base of Centrica's Canadian business.



This news release contains certain forward-looking statements, including,
without limitation, statements concerning Centrica's and NewPower's operations,
economic performance and financial condition. These forward-looking statements
are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of their dates. Actual
results could differ materially from the results referred to in the
forward-looking statements. These forward-looking statements are based largely
on Centrica's and NewPower's current expectations and are subject to a number of
risks and uncertainties, including, without limitation, changes in external
market factors, changes in business or growth strategy or an inability to
execute strategy due to changes in such company's industry or the economy
generally, the emergence of new or growing competitors, various other
competitive factors and other risks and uncertainties indicated from time to
time in Centrica's and NewPower's filings with the U.S. Securities and Exchange
Commission. In light of these risks and uncertainties, there can be no assurance
that the results referred to in the forward-looking statements contained in this
news release will in fact occur. Additionally, neither Centrica nor NewPower
makes any commitment to disclose any revisions to forward-looking statements, or
any facts, events or circumstances after the date hereof that may bear upon
forward-looking statements.

NewPower stockholders are advised to read Centrica's Tender Offer Statement on
Schedule TO and NewPower's Solicitation/Recommendation Statement on Schedule
14D-9 when they are available because they will contain important information.
The Offer to Purchase, the related Letter of Transmittal, and certain other
offer documents, as well as the Solicitation/Recommendation Statement, will be
made available to shareholders of NewPower Holdings, Inc., at no expense to
them. The Schedule TO, the Schedule 14D-9 and other filed documents will also be
available without charge at the Securities and Exchange Commission's website at
www.sec.gov. This press release is neither an offer to purchase nor a
solicitation of an offer to sell securities of NewPower. The tender offer will
be made solely by an offer to purchase and related letter of transmittal to be
disseminated upon the commencement of the tender offer.





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