Dynegy Announces Agreement with Exelon on Sale of Illinois Power Assets.

Energy Editors/Business Editors

HOUSTON--(BUSINESS WIRE)--Nov. 3, 2003

Dynegy Inc. (NYSE:DYN)

    --  $2.225 billion sales transaction will significantly strengthen
        Dynegy and Illinois Power's financial condition

        --  $1.8 billion of Illinois Power debt will be assumed by
            Exelon at closing

        --  $425 million to be received by Dynegy

        --  $2.3 billion intercompany note will be eliminated

    --  Companies to establish a six-year agreement through which
        Exelon will purchase 6,000 megawatts of generating capacity to
        serve Illinois markets

Dynegy Inc. (NYSE:DYN), the parent company of Decatur, Illinois-based utility Illinois Power Company, today announced that it has entered into an agreement with Exelon Corp. (NYSE:EXC) through which Exelon will acquire substantially all of the assets and liabilities of Illinois Power. The assets included in the transaction consist of approximately 40,000 miles of electric transmission and distribution lines, more than 750 miles of natural gas transmission pipe and 7,600 miles of natural gas distribution lines. Illinois Power, which has more than 1,800 employees and approximately 590,000 electricity customers and 415,000 natural gas customers across northern, central and southern Illinois, currently comprises Dynegy's regulated energy delivery reporting segment.

Under the terms of the agreement, which has been approved by each company's board of directors, Exelon will acquire Illinois Power for $2.225 billion. The purchase price includes the assumption of all of Illinois Power's debt, estimated to be approximately $1.8 billion at closing, a $150 million promissory note and approximately $275 million of cash, subject to working capital adjustments. The promissory note bears interest at 5 percent per annum, matures in December 2010 and is subject to mandatory prepayment or extension upon the occurrence of certain events, including those relating to ratings upgrades obtained by Dynegy and contingent environmental liabilities retained by Illinois Power.

"Restoring the balance sheets of both Dynegy and Illinois Power and creating financially stronger companies are the right things to do for all of our shareholders, employees, the banks and bondholders, and the communities in which we operate," said Bruce A. Williamson, president and chief executive officer of Dynegy Inc. "The improvements we achieved in our financial position over the last year have enabled us to pursue a new strategic direction for Dynegy, and we decided that Illinois Power will be better placed with a proven leader in the regulated utility industry," he added.