<PAGE>
                                                        Exhibit 10.27.3


                  ASSIGNMENT AND ASSUMPTION AGREEMENT

          This ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of
     December 10, 1997 (this "Agreement"), is made and entered into
     by and between NRG ENERGY, INC., a Delaware corporation ("NRG
     Energy"), and NRGG FUNDING INC., a Delaware corporation ("NRGG
     Funding").

                               RECITALS

          WHEREAS, NRG (Morris) Cogen, LLC (the "Borrower") entered
     into the Construction and Term Loan Agreement, dated as of
     September 15, 1997 (the "Credit Agreement"), with the banks
     party thereto (the "Banks"), The Chase Manhattan Bank as agent
     for the Banks (in such capacity, the "Agent Bank") and The
     Chase Manhattan Bank as collateral agent for the Banks (in such
     capacity, the "Collateral Agent"), pursuant to which the Banks
     have agreed to make construction and term loans and extend
     other credit to the Borrower for the purpose of financing the
     cost of developing, constructing, starting-up and operating an
     approximately 117 megawatt gas-fired cogeneration facility in
     Morris, Illinois (the "Project");

          WHEREAS, as a condition precedent to the Banks, the Agent
     Bank and the Collateral Agent entering into the Credit
     Agreement and the Banks extending credit to the Borrower
     thereunder, NRG Energy executed and delivered the Equity
     Commitment Agreement, dated as of September 15, 1997 (the
     "Equity Commitment Agreement"), in favor of the Borrower and
     the Collateral Agent, pursuant to which NRG Energy agreed to
     make equity contributions to the Borrower from time to time;

          WHEREAS, pursuant to the Membership Interest Purchase
     Agreement, dated as of the date hereof (the "Purchase
     Agreement"), NRG Energy is transferring all of its equity
     interest in the Borrower to NRGG Funding;

          WHEREAS, upon execution and delivery of the Purchase
     Agreement, NRGG Funding will own 99% of the membership
     interests in the Borrower and, accordingly, will derive
     substantial benefit from the extension of credit by the Banks
     to the Borrower under the Credit Agreement; and

          WHEREAS, it is condition precedent to the Banks continuing
     to extend credit to the Borrower under the Credit Agreement
     that NRG Energy and NRGG Funding execute and deliver this
     Agreement, the form and substance of which must be consented to
     by the Required Banks;

     <PAGE>

                               AGREEMENT

          NOW, THEREFORE, in consideration of the foregoing and for
     other good and valuable consideration, the receipt and adequacy
     of which are hereby acknowledged, the parties hereto hereby
     agree as follows:

                               ARTICLE I
               DEFINED TERMS; PRINCIPLES OF CONSTRUCTION

          Section 1.1  Defined Terms.  (a) Unless otherwise defined
     herein, capitalized terms used in this Agreement shall have the
     meanings given to such terms in the Equity Commitment Agreement
     (including terms incorporated therein from the Credit
     Agreement).

          (b) The following terms shall have the following
     respective meanings:

               "Amended LLC Agreement" shall have the meaning given
     to the term "LLC Agreement" in the Pledge Agreement.

               "Equity Guarantee" shall mean the Equity Commitment
     Guaranty, dated as of the date hereof, by NRG Energy in favor
     of the Borrower and the Collateral Agent.

               "First Amendment to the Credit Agreement" shall mean
     the Amendment and Consent, dated as of the date hereof, among
     the Borrower and the Banks.

               "NRGG Documents" shall mean, collectively, the NRGG
     Financing Documents and the NRGG Purchase Documents.

               "NRGG Financing Documents" shall mean this Agreement,
     the Equity Commitment Agreement, the Equity Guarantee, the
     Pledge Agreement, the Subordination Agreement, the First
     Amendment to the Credit Agreement and the Financing Statements
     (as defined under the Pledge Agreement) filed in connection
     with the Liens granted to the Collateral Agent in the Pledge
     Agreement.

               "NRGG Purchase Documents" shall mean the Purchase
     Agreement, the Amended LLC Agreement, the Supplemental Loan
     Agreement and the Subordinated Pledge Agreement.

               "Pledge Agreement" shall mean the Pledge and Security
     Agreement, dated as of the date hereof, among NRGG Funding, NRG
     MI and the Collateral Agent.

               "Purchase Agreement" shall mean the Membership
     Interest Purchase Agreement, dated as of the date hereof,
     between NRG Energy, NRG Generating and NRGG Funding.

                                   2

     <PAGE>

               "Subordinated Pledge Agreement" shall mean the
     Subordinated Pledge and Security Agreement, dated as of the
     date hereof, among NRGG Funding, NRG MI and NRG Energy.

               "Subordination Agreement" shall mean the
     Subordination Agreement, dated as of the date hereof, between
     NRG Energy and the Collateral Agent.

               "Supplemental Loan Agreement" shall mean the
     Supplemental Loan Agreement, dated as of the date hereof,
     between NRG Energy and NRGG Funding.

          Section 1.2  Principles of Construction.  Unless otherwise
     expressly provided herein, the principles of construction set
     forth in Section 1.4 of the Credit Agreement shall apply to
     this Agreement.

                              ARTICLE II
               ASSIGNMENT AND ASSUMPTION; ACKNOWLEDGMENT

          Section 2.1  Assignment and Assumption.  NRG Energy hereby
     assigns, conveys and transfers all of NRG Energy's estate,
     right, title and interest in, to and under the Equity
     Commitment Agreement to NRGG Funding and NRGG Funding hereby
     assumes all liabilities, obligations and duties thereunder.

          Section 2.2  Acknowledgment and Consent.  By executing
     this Agreement, the parties hereto acknowledge, consent and
     agree that, upon the satisfaction of the conditions set forth
     in Article IV of this Agreement, NRG Energy shall be released
     from all liabilities, obligations and duties under the Equity
     Commitment Agreement.

                              ARTICLE III
                    REPRESENTATIONS AND WARRANTIES

          NRGG Funding represents and warrants as follows, which
     representations and warranties shall survive the execution and
     delivery of this Agreement:

          Section 3.1  Due Incorporation; Qualification.  NRGG
     Funding is a corporation duly organized and validly existing
     under the Laws of the State of Delaware, and is qualified to
     own property and transact business in every jurisdiction where
     the ownership of its property and the nature of its business as
     currently conducted and as contemplated to be conducted
     requires it to be qualified, except where the failure to so
     qualify could not reasonably be expected to result in a
     Material Adverse Effect (as herein defined).  For purposes of
     this Agreement, "Material Adverse Effect" shall mean a material
     adverse effect on any of (i) the operations, business,
     financial condition or property of NRGG Funding and its
     subsidiaries on a consolidated basis, (ii) the ability of NRGG
     Funding to perform in a timely manner its material obligations
     under the NRGG Documents to which

                                   3

     <PAGE>

     it is or is intended to be a party or (iii) the rights and
     interests of the Banks, the Agent Bank and the Collateral Agent
     under the Transaction Documents.

          Section 3.2  Authority; Authorization, Execution and
     Delivery; Enforceability.  NRGG Funding has full power,
     authority and legal right to enter into this Agreement and the
     other NRGG Documents to which it is or is intended to be a
     party and to perform its obligations hereunder and thereunder.
     The execution, delivery and performance of the NRGG Documents
     to which NRGG Funding is or is intended to be a party have been
     duly authorized by all necessary corporate action on the part
     of NRGG Funding.  The NRGG Documents to which NRGG Funding is
     or is intended to be a party have been duly executed and
     delivered by NRGG Funding and constitute legal, valid and
     binding obligations of NRGG Funding enforceable against NRGG
     Funding in accordance with their terms, except as
     enforceability may be limited by applicable bankruptcy,
     insolvency, moratorium or other similar Laws affecting
     creditors' rights generally and except as enforceability may be
     limited by general principles of equity (whether considered in
     a suit at law or in equity).

          Section 3.3  Consents; Governmental Approvals.  No consent
     of any other party (including, without limitation, stockholders
     or creditors of NRGG Funding) and no Governmental Approval is
     required which has not been obtained for the execution,
     delivery and performance by NRGG Funding of the NRGG Documents
     to which it is or is intended to be a party, other than any
     consent or Governmental Approval not required as of the date
     this representation is made or deemed made and that will be
     obtained on or before the date on which such consent or
     Governmental Approval is required to be obtained.

          Section 3.4  No Conflicts.  The execution, delivery and
     performance by NRGG Funding of the NRGG Documents to which it
     is or is intended to be a party will not (i) require any
     consent or approval of the Board of Directors of NRGG Funding
     which has not been obtained, (ii) violate the provisions of
     NRGG Funding's certificate of incorporation or bylaws, (iii)
     violate the provisions of any Law (including, without
     limitation, any usury Laws), regulation or order of any
     Governmental Authority applicable to NRGG Funding, (iv) result
     in a breach of or constitute a default under any material
     agreement relating to the management or affairs of NRGG
     Funding, or any indenture or loan or credit agreement or any
     other material agreement, lease or instrument to which NRGG
     Funding is or is intended to be a party or by which NRGG
     Funding or any of its material properties may be bound or (v)
     result in or create any Lien (other than Permitted Liens)
     under, or require any consent which has not been obtained
     under, any indenture or loan or credit agreement or any other
     material agreement, instrument or document, or the provisions
     of any order, writ, judgment, injunction, decree, determination
     or award of any Governmental Authority binding upon NRGG
     Funding or any of its properties.

                                   4

     <PAGE>

          Section 3.5  Litigation.  No Event of Bankruptcy has
     occurred with respect to NRGG Funding and there is no action,
     suit or proceeding at Law or in equity or by or before any
     Governmental Authority, arbitral tribunal or other body now
     pending against NRGG Funding or, to the best knowledge of NRGG
     Funding, threatened against NRGG Funding which questions the
     validity or legality of or seeks damages in connection with the
     NRGG Documents to which NRGG Funding is or is intended to be a
     party.

          Section 3.6  Compliance with Laws.  NRGG Funding has been
     in the past and is in current compliance with all Laws
     applicable to it, except where failure to comply could not
     reasonably be expected to result in a Material Adverse Effect
     (as defined in Section 3.1 hereof).

          Section 3.7  Financial Statements.  The financial
     statements of NRGG Funding provided or to be provided as
     contemplated in Section 4.5 hereof or in any other Financing
     Document are or will be true, correct and complete as of the
     dates specified therein and fully and accurately present the
     financial condition of NRGG Funding as of the dates and for the
     periods specified.  There has been no material adverse change
     in the financial condition of NRGG Funding from the date of
     NRGG Funding's most recent audited financial statements
     delivered to the Agent Bank (except as heretofore disclosed to
     the Agent Bank in a writing delivered by or on behalf of NRGG
     Funding).

          Section 3.8  Regulation.  NRGG Funding is not (a) an
     "investment company" or a company "controlled" by an
     "investment company," within the meaning of the ICA.  NRGG
     Funding is a "subsidiary company" of a "holding company," as
     those terms are defined in PUHCA, but NRGG Funding is exempt
     from all provisions of PUHCA except Section 9(a) thereof by
     virtue of Section 3(a)(2) thereof.  NRGG Funding is not a
     "public utility" or similar entity under applicable federal or
     state Law.

                              ARTICLE IV
                         CONDITIONS PRECEDENT

          The release of NRG Energy of its liabilities, obligations
     and duties under the Equity Commitment Agreement is subject to
     the following conditions precedent:

          Section 4.1  NRGG Financing Documents.  The Agent Bank
     shall have received each NRGG Financing Document (together with
     all amendments, supplements, schedules and exhibits thereto),
     each of which (a) shall have been duly authorized, executed and
     delivered by each Person party thereto (other than the Agent
     Bank, the Collateral Agent and the Banks), (ii) shall be in
     form and substance reasonably satisfactory to each Bank and
     (iii) shall be in full force and effect.  All representations
     and warranties contained in each NRGG Financing Document shall
     be true and correct in all material respects and no default or
     event of default shall have occurred thereunder.

                                   5

     <PAGE>

          Section 4.2  NRGG Purchase Documents.  The Agent Bank
     shall have received copies of each NRGG Purchase Document
     (together with all amendments, supplements, schedules and
     exhibits thereto), each of which (a) shall have been duly
     authorized, executed and delivered by each Person party thereto
     (other than the Agent Bank, the Collateral Agent and the
     Banks), (ii) shall be in form and substance reasonably
     satisfactory to the Agent Bank and (iii) shall be in full force
     and effect.  All representations and warranties contained in
     each NRGG Purchase Document shall be true and correct in all
     material respects and no default or event of default shall have
     occurred thereunder.

          Section 4.3  Pledged Collateral.  Pursuant to the terms of
     the Pledge Agreement, the Liens on the Pledged Collateral (as
     defined in the Pledge Agreement) shall have been duly created
     or attached and such Liens shall have been perfected to create
     a first priority security interest in and charge over the
     Pledged Collateral (as defined in the Pledge Agreement) in
     favor of the Collateral Agent for the benefit of itself and the
     other Secured Parties.  All Taxes, fees and other charges
     payable in connection therewith shall have been paid in full by
     NRGG Funding or the Borrower.

          Section 4.4  Corporate Documents.  The Agent Bank shall
     have received each of the following in form and substance
     satisfactory to it:

               (a) a certificate of an Authorized Officer of NRGG
          Funding, dated as of the date hereof, certifying as true,
          complete and correct attached copies of (i) the
          certificate of incorporation of NRGG Funding, (ii) the
          bylaws of NRGG Funding and (iii) the resolutions of the
          board of directors of NRGG Funding approving and
          authorizing the execution, delivery and performance of the
          NRGG Documents to which NRGG Funding is or is intended to
          be a party;

               (b) a certificate of an Authorized Officer of NRGG
          Funding, dated as of the date hereof, certifying the names
          and true signatures of the incumbent officers of NRGG
          Funding authorized to sign the NRGG Documents to which
          NRGG Funding is or is intended to be a party; and

               (c) evidence that NRGG Funding is duly authorized to
          carry on its business as now being conducted by it, and as
          proposed to be conducted by it, in each jurisdiction in
          which it is required to be so authorized.

          Section 4.5  Financial Statements.  The Agent Bank shall
     have received true, correct and complete copies of the audited
     financial statements for the most recently completed fiscal
     year of NRGG Funding.

          Section 4.6  Legal Opinions.  The Agent Bank shall have
     received (a) an opinion of counsel to NRGG Funding
     substantially in the form of Exhibit A hereto and otherwise in
     form and substance satisfactory to the Agent Bank and (b) an
     opinion of counsel to

                                   6

     <PAGE>

     NRG Energy substantially in the form of Exhibit B hereto and
     otherwise in form and substance satisfactory to the Agent Bank.

          Section 4.7  Appointment of Agent.  NRGG Funding shall
     have appointed an agent for service of process on terms
     satisfactory to the Agent Bank and shall have paid all fees
     necessary for such process agent to act as such through the
     Final Maturity Date.

                               ARTICLE V
                             MISCELLANEOUS

          Section 5.1  Notices.  NRGG Funding's address and
     telephone and telecopier numbers for the provision of notices
     under each NRGG Document to which it is or is intended to be a
     party are as follows:

               NRGG Funding Inc.
               1221 Nicollet Mall, Suite 610
               Minneapolis, MN 55403
                     Attention:   President and Chief Executive
                     Officer
                    Telephone:  (612) 373-5300
                    Telecopier: (612) 373-5430

          Section 5.2  Third Party Beneficiaries.  The agreements of
     the parties hereto are intended to benefit the Banks, the Agent
     Bank and the Collateral Agent and their respective successors
     and assigns.

          Section 5.3  Severability.  In case any provision in or
     obligation under this Agreement shall be invalid, illegal or
     unenforceable in any jurisdiction, the validity, legality and
     enforceability of the remaining provisions or obligations, or
     of such provision or obligation in any other jurisdiction,
     shall not in any way be affected or impaired thereby.

          Section 5.4  Counterparts.  This Agreement may be executed
     in any number of counterparts and by the different parties
     hereto on separate counterparts, each of which when so executed
     and delivered shall be an original, but all of which shall
     together constitute one and the same instrument.

          Section 5.5  Headings Descriptive.  The headings of the
     several Sections of this Agreement are inserted for convenience
     only and shall not in any way affect the meaning or
     construction of any provision of this Agreement.

                                   7

     <PAGE>

          Section 5.6  Governing Law.  This Agreement is a contract
     made under the Laws of the State of New York of the United
     States and shall for all purposes be governed by and construed
     in accordance with the Laws of such State without regard to the
     conflict of law rules thereof (other than Section 5-1401 of the
     New York General Obligations Law).

          Section 5.7  Entire Agreement.  This Agreement, together
     with any other agreement executed in connection herewith, is
     intended by the parties as a final expression of their
     agreement as to the matters covered hereby and is intended as a
     complete and exclusive statement of the terms and conditions
     thereof.


       [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                   8

     <PAGE>

               IN WITNESS WHEREOF, the parties hereto have caused
     this Assignment and Assumption Agreement to be duly executed
     and delivered by their officers thereunto duly authorized as of
     the date first above written.


                             NRG ENERGY, INC.

                             By:/s/ David H. Peterson
                                 Name:  David H. Peterson
                                 Title: President


                             NRGG FUNDING INC.

                             By: /s/ Timothy P. Hunstad
                                 Name:  Timothy P. Hunstad
                                 Title: VP-CFO

     Acknowledged and consented to:

     THE CHASE MANHATTAN BANK,
          as a Bank

     By:  /s/ Kevin P. O'Neill
          Name:  Kevin P. O'Neill
          Title: Vice President


     THE CHASE MANHATTAN BANK,
          as Agent Bank

     By:  /s/ Kevin P. O'Neill
          Name:  Kevin P. O'Neill
          Title: Vice President


     THE CHASE MANHATTAN BANK,
          as Collateral Agent

     By:  /s/ Annette M. Marsula
          Name:  Annette M. Marsula
          Title: Assistant Vice President

     <PAGE>

     Acknolwedged and consented to:

     THE BANK OF NEW YORK

     By:  /s/ John N. Wyatt
          Name:  John N. Wyatt
          Title: Vice President


     NATEXIS BANQUE

     By:  /s/ D.J.R. Osten
          Name:  D.J.R. Osten
          Title: First VP


     THE SUMITOMO TRUST AND BANKING COMPANY, LTD.

     By:  /s/ Suraj P. Bhatia
          Name:  Suraj P. Bhatia
          Title: Senior Vice President

     <PAGE>

                                                        Exhibit A to
                                 Assignment and Assumption Agreement


              FORM OF OPINION OF COUNSEL TO NRGG FUNDING

               1.  NRGG Funding Inc. (the "Company") is a
     corporation duly organized and validly existing under the laws
     of the State of Delaware and is qualified to do business in
     each jurisdiction in which such qualification is required.

               2.  The Company has the corporate or other applicable
     power and authority and full legal right to execute and deliver
     each of the NRGG Documents to which it is a party and to
     perform its obligations thereunder.

               3.  The execution, delivery and performance by the
     Company of each NRGG Document to which it is a party have been
     duly authorized by all requisite action on the part of the
     Company.

               4.  Each of the NRGG Documents to which the Company
     is a party has been duly executed and delivered by the Company.

               5.  Neither the execution and delivery by the Company
     of each NRGG Document to which it is a party, nor the
     performance by it of its obligations under each such NRGG
     Document, contravenes or conflicts with (i) its Certificate of
     Incorporation, or other applicable constituent documents, as
     the case may be, (ii) any agreement or instrument (including,
     without limitation, each other NRGG Document) to which it is a
     party or by which its properties or assets are bound and (iii)
     any judicial or administrative judgment, injunction, order or
     decree that is binding upon it or its properties or assets.

               6.  No order, consent, approval, license,
     authorization or validation of, or filing, recording or
     registration with, or exemption by, any court, governmental
     body or authority, or any subdivision thereof, is required to
     authorize or is required in connection with the execution and
     delivery by the Company of any NRGG Document to which it is a
     party, or in connection with the performance of its obligations
     thereunder or the consummation of the transactions contemplated
     thereby other than those that have been obtained or made and
     are in full force and effect or will be obtained or made prior
     to the time the same is required and thereafter remains in full
     force and effect.

               7.  Each of the NRGG Documents to which the Company
     is a party constitutes a valid and binding obligation of the
     Company enforceable against the Company in accordance with its
     terms.

     <PAGE>

               8.  Neither the execution, delivery and performance
     by the Company of each of the NRGG Documents to which it is
     party, nor the consummation by the Company of the transactions
     contemplated therein, violates any Applicable Laws.

               9.  All Government Approvals which under Applicable
     Laws are required to be obtained or made by the Company in
     connection with the due execution and delivery of, or
     performance by the Company of its obligations under, each of
     the NRGG Documents to which it is party have been obtained or
     made.

                 This  opinion may be relied upon by the Banks,
      the Agent Bank, the Collateral Agent and any assignees of
      or  participants in the interests of the Banks under  the
      Credit                                         Agreement.
      <PAGE>

                                                        Exhibit B to
                                 Assignment and Assumption Agreement


               FORM OF OPINION OF COUNSEL TO NRG ENERGY

               1.  NRG Energy, Inc. (the "Company") is a corporation
     duly organized and validly existing under the laws of the State
     of Delaware and is qualified to do business in each
     jurisdiction in which such qualification is required.

               2.  The Company has the corporate or other applicable
     power and authority and full legal right to execute and deliver
     each of the NRGG Documents to which it is a party and to
     perform its obligations thereunder.

               3.  The execution, delivery and performance by the
     Company of each NRGG Document to which it is a party have been
     duly authorized by all requisite action on the part of the
     Company.

               4.  Each of the NRGG Documents to which the Company
     is a party has been duly executed and delivered by the Company.

               5.  Neither the execution and delivery by the Company
     of each NRGG Document to which it is a party, nor the
     performance by it of its obligations under each such NRGG
     Document, contravenes or conflicts with (i) its Certificate of
     Incorporation, or other applicable constituent documents, as
     the case may be, (ii) any agreement or instrument (including,
     without limitation, each other NRGG Document) to which it is a
     party or by which its properties or assets are bound and (iii)
     any judicial or administrative judgment, injunction, order or
     decree that is binding upon it or its properties or assets.

               6.  No order, consent, approval, license,
     authorization or validation of, or filing, recording or
     registration with, or exemption by, any court, governmental
     body or authority, or any subdivision thereof, is required to
     authorize or is required in connection with the execution and
     delivery by the Company of any NRGG Document to which it is a
     party, or in connection with the performance of its obligations
     thereunder or the consummation of the transactions contemplated
     thereby other than those that have been obtained or made and
     are in full force and effect or will be obtained or made prior
     to the time the same is required and thereafter remains in full
     force and effect.

               7.  Each of the NRGG Documents to which the Company
     is a party constitutes a valid and binding obligation of the
     Company enforceable against the Company in accordance with its
     terms.

     <PAGE>

               8.  Neither the execution, delivery and performance
     by the Company of each of the NRGG Documents to which it is
     party, nor the consummation by the Company of the transactions
     contemplated therein, violates any Applicable Laws.

               9.  All Government Approvals which under Applicable
     Laws are required to be obtained or made by the Company in
     connection with the due execution and delivery of, or
     performance by the Company of its obligations under, each of
     the NRGG Documents to which it is party have been obtained or
     made.

               This opinion may be relied upon by the Banks, the
     Agent Bank, the Collateral Agent and any assignees of or
     participants in the interests of the Banks under the Credit
     Agreement.