Power generation deal

Centrica PLC
22 May 2002

22 May, 2002

Centrica sells equity interest in Spalding in exchange for innovative power deal

Centrica plc has today announced that its wholly owned subsidiary, British Gas
Trading Limited, has entered into an innovative energy tolling agreement to
acquire rights to the total capacity of the 860 MW gas-fired power plant to be
built in Spalding, Lincolnshire. This modern high-efficiency plant will use
established technology and is designed to operate in a flexible, non base-load
regime.

In conjunction with these tolling arrangements and consistent with Centrica's
selective asset ownership strategy, Centrica has sold its 50 per cent equity
interest to an InterGen affiliate, Spalding Holding Company BV, achieving a
premium over its investment costs. This equity interest was acquired when the
two parties entered into a joint venture development in December 1999.

Centrica and InterGen have agreed commercial terms over an initial 17 year
period under which Centrica acquires the total plant capacity rights for a
combination of fixed and market-related tolling payments. This allows Centrica
to source the gas and to flexibly dispatch the plant to manage its demand
requirements whilst leaving operational responsibility with InterGen.

This arrangement would satisfy approximately 10 per cent of the current peak
requirements of Centrica's customers, which have grown both organically and
through the acquisition of the commercial energy customer business of Enron
Direct Limited.

Roy Gardner, Chief Executive of Centrica said: 'We are delighted with this
innovative agreement; it provides Centrica with increased flexibility to manage
our growing customer demand, while leaving the construction and operating
management with InterGen. We have the full flexibility of a modern purpose-built
asset, on highly attractive terms, without tying up our own capital in the
plant.'

InterGen today announced the financial close and funding of credit facilities
for the combined cycle power station. Initial construction work has commenced
and the plant is expected to be operational by the end of 2004.

The Spalding development, which was first proposed by InterGen in January 1996,
was put on hold during the Government's 'stricter consents' policy on gas-fired
plants, pending changes to the electricity market. The combined cycle gas
turbine power station was subsequently given the green light by the Department
of Trade and Industry in November 2000.

In May last year, Centrica acquired a 60 per cent share in Humber Power Limited,
which owns and operates a 1260 MW gas-fuelled power plant in Stallingborough,
Lincolnshire. In August Centrica also acquired the entire economic interest in
two gas-fired power stations based in Peterborough and King's Lynn with a
combined generation capacity of 705 MW. Together, these three stations currently
supply 20 per cent of Centrica's peak electricity needs.

Enquiries:

Centrica media relations:        01753 494085

Centrica investor relations:     01753 494900



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