DALLAS, TX, September 21, 2000—TXU Australia, a subsidiary of TXU, has received the final decision on electricity distribution prices for 2001 – 2005 by the Office of the Regulator-General (the Office) of Victoria, Australia.

The Office’s decision relates to the network (wires) component (around 40%) of the electricity bill – in particular, how much customers will pay for the delivery of electricity to their homes and businesses and the standards for the service.

“From our perspective, the net effect of the final decision is essentially the same for customers and stakeholders as the draft issued in May. Although we are disappointed with aspects of the decision, we will manage the outcome,” said Steve Philley, TXU Australia CEO. “It is our intention to continue to work with government to provide reliable and affordable service to our customers and fair returns to our stakeholders.”

The Office’s decision is scheduled to become effective at the beginning of 2001. The decision results in an annual reduction in network revenues of approximately AU$30 million (US$16 million) excluding the transfer of certain costs to the retail business that were formerly associated with the network business. The Office’s decision also accepts TXU’s proposed plan to further improve network performance for customers by 16 percent over the five-year price review period.

“We are especially disappointed that the Office has not addressed the price imbalances that will result in Victorian rural customers paying more than Victorian city customers,” said Philley. “This is a matter of fairness and of setting a level playing field for economic development in Victoria. On behalf of our customers, TXU will continue to work with the government to bring about a fair solution for everyone,” he said.

“TXU also will continue to work with the government in its plan to transform the Office into an Essential Services Commission if it results in an open and transparent process of incentive-based regulation designed to deliver fair and balanced solutions for customers and stakeholders,” Philley added.