Acquisition

Centrica PLC
24 December 2002

24 December 2002

Centrica completes acquisition of 810,000 Texan customers

Centrica plc today announced that, following all relevant regulatory approvals,
its wholly owned subsidiaries, Centrica U.S. Holdings Inc. and Centrica Holdco
Inc., have completed the acquisition, announced on 17 April 2002, of Texas-based
Central Power and Light Retail Energy (CPL) and West Texas Utilities Retail
Energy (WTU) companies from American Electric Power Inc (AEP). The initial
consideration is $146 million (£91m), payable on completion. (See notes).

CPL and WTU have around 644,000 and 166,000 residential and small commercial
electricity customers, respectively. Centrica also serves electricity customers
in Texas, under its Energy America brand.

Sir Roy Gardner, Centrica chief executive, said: 'Texas is at the forefront of
US energy deregulation and completing this acquisition today of two incumbent
brands makes Centrica one of the largest and most recognisable suppliers in this
important market.'

CPL and WTU customers will continue to be charged under the regulated Price to
Beat tariffs, set by the Public Utility Commission of Texas in order to
encourage competition.


Enquiries

Centrica Media Relations       01753 494085

Centrica Investor Relations    01753 494900



Notes to investors and editors:

 1. As stated in the original announcement, consideration for the transaction
    will also include an earnings sharing mechanism, under which AEP will
    receive in cash a portion of the combined operations' earnings before
    interest and tax ('EBIT') for each year until the end of 2006. In each such
    year, the first $45 million (£28m) of EBIT from the combined service
    territories will not be subject to the mechanism and will accrue fully to
    Centrica. Beyond this level, an annual cash payment to AEP will be made,
    equal to 80% of the EBIT of the combined operations between $45 million
    (£28m) and $100 million (£62m) plus 50% of any incremental EBIT above $100
    million (£62m). This arrangement is effective from 1 September, 2002.

 2. In addition to the purchase price, payments associated with the transaction
    will include approximately $39 million (£24m) (initial upfront payment,
    amortised over two years) related to the access to AEP's customer
    relationship management and billing arrangements in Texas. At closing,
    Centrica will contract on an arm's length basis with Mutual Energy Services
    Company, a wholly-owned unit of AEP, to utilise its billing and CRM services
    for a two year period.


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