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                                                       Exhibit 10.27.12






                        SUBORDINATION AGREEMENT

               SUBORDINATION AGREEMENT (this "Agreement"), dated as
     of December 12, 1997, between NRG ENERGY, INC., a Delaware
     corporation ("NRG Energy"), and THE CHASE MANHATTAN BANK as
     Collateral Agent (as defined below) for the Secured Parties (as
     defined below) under the Credit Agreement (as defined below).

                               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" and, together with the Banks
     and the Agent Bank, the "Secured Parties"), pursuant to which
     the Banks will 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 conditions 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, (i) 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,
     and (ii) NRG Energy executed and delivered the Pledge and
     Security Agreement, dated as of September 15, 1997, in favor of
     the Collateral Agent, pursuant to which NRG Energy granted a
     security interest in its membership interests in the Borrower
     (and related assets) to the Collateral Agent;

               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
     interests in the Borrower to NRGG Funding Inc. ("NRGG
     Funding");

               WHEREAS, in connection with the execution and
     delivery of the Purchase Agreement, and as conditions precedent
     to the Banks continuing to extend credit to the Borrower under
     the Credit Agreement, (i) NRGG Funding is assuming all of NRG
     Energy's obligations under the Equity Commitment Agreement
     pursuant to an Assignment and Assumption Agreement, dated as of
     the date hereof (the "Assignment Agreement"), between NRG
     Energy and NRGG Funding, and (ii) NRGG Funding and NRG Morris
     Inc. ("NRGMI") are executing and delivering a Pledge and
     Security Agreement, dated as of the

     <PAGE>

     date hereof (the "Senior Pledge Agreement"), pursuant to which
     NRGG Funding and NRGMI are granting a security interest in
     their membership interests in the Borrower (and related assets)
     to the Collateral Agent;

               WHEREAS, pursuant to the Supplemental Loan Agreement,
     dated as of the date hereof (the "NRGG Loan Agreement"),
     between NRG Energy, NRGG Funding and NRG Generating (U.S.) Inc.
     ("NRG Generating"), NRG Energy is making a loan to NRGG Funding
     to permit NRGG Funding to make its required equity contribution
     under the Equity Commitment Agreement;

     WHEREAS, to secure NRGG Funding's obligations under the NRGG
     Loan Agreement, NRGG Funding and NRGMI are granting a security
     interest in their membership interests in the Borrower (and
     related assets) to NRG Energy pursuant to the Subordinated
     Pledge and Security Agreement, dated as of the date hereof (the
     "Subordinated Pledge Agreement"), between NRGG Funding, NRGMI
     and NRG Energy;

               WHEREAS, NRG Energy has agreed to subordinate its
     claims under the NRGG Loan Agreement and the Subordinated
     Pledge Agreement to the claims of the Secured Parties under the
     Credit Agreement, the Senior Pledge Agreement and the other
     Financing Documents with respect to the Shared Collateral (as
     defined herein);

                               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
     agree as follows:

               1.   Defined Terms.  (a) Capitalized terms used but
     not defined herein shall have the meanings given to such terms
     in the Credit Agreement.
                    (b) All terms defined in the foregoing Recitals
     shall have the meanings given to such terms therein.

                    (c) The following terms shall have the following
     meanings:

               "NRGG Loan Note" shall mean the Note, dated December
     10, 1997, executed by NRGG Funding and NRG Generating in favor
     of NRG Energy evidencing the indebtedness incurred under the
     NRGG Loan Agreement.

               "Proceeding" shall mean any (a) insolvency,
     bankruptcy, receivership, liquidation, reorganization,
     readjustment, composition or other similar proceeding relating
     to NRGG Funding or NRGMI, its property or its creditors as
     such, (b) proceeding for any liquidation, dissolution or other
     winding-up of NRGG Funding or NRGMI, voluntary or

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     involuntary, whether or not involving insolvency or bankruptcy
     proceedings, (c) assignment for the benefit of creditors of
     NRGG Funding or NRGMI or (d) other marshalling of the assets of
     NRGG Funding or NRGMI, in each case, under the law of the
     United States or any other jurisdiction.

               "Senior Agreements" shall mean, collectively, the
     Senior Pledge Agree ment, the other Financing Documents, all
     Secured Interest Rate Protection Agreements and all other
     agreements or instruments evidencing any Senior Claim.

               "Senior Claims" shall mean all Secured Obligations
     (as defined in the Senior Pledge Agreement).

               "Shared Collateral" shall mean all collateral in
     which (i) a security interest was granted or purported to be
     granted to the Collateral Agent under the Senior Pledge
     Agreement and (ii) a security interest was granted or purported
     to be granted to NRG Energy under the Subordinated Pledge
     Agreement.

               "Subordinated Agreements" shall mean, collectively,
     the NRGG Loan Agreement, the NRGG Loan Note, the Subordinated
     Pledge Agreement and all other agreements or instruments
     evidencing any Subordinated Claim.

               "Subordinated Claims" shall mean all Secured
     Obligations (as defined in the Subordinated Pledge Agreement).

               2.   Subordination Generally.  (a) With respect to
     the Shared Collateral, the Senior Claims shall be and at all
     times remain senior, paramount and prior in right of payment
     and enforcement to the Subordinated Claims and, notwithstanding
     (i) any other agreement or instrument, (b) the actual time,
     order or method of creation, attachment or perfection of the
     respective Liens on and security interests in the Shared
     Collateral granted to NRG Energy or the Collateral Agent, as
     the case may be, (ii) the date or manner of the filing of
     financing statements with respect thereto, (iii) the time or
     order of taking possession of any Shared Collateral or (iv) the
     giving or failure to give notice of the acquisition or expected
     acquisition of purchase money or other security interests in
     the Shared Collateral.  Notwithstanding any provision of the
     Uniform Commercial Code governing perfection thereof, or any
     other applicable Law or decision, as between NRG Energy and the
     Collateral Agent the Lien on and security interest in the
     Shared Collateral held at any time by NRG Energy, and any other
     rights NRG Energy may have with respect to the Shared
     Collateral, shall be fully subject and subordinate to the
     Collateral Agent's Lien on and security interest in the Shared
     Collateral to the full extent of the Senior Claims and to all
     of the rights of the Secured Parties in the Shared Collateral
     with respect to the Senior Claims as set forth in the Credit
     Agreement and the other Financing Documents and otherwise
     available to the Secured Parties at law or in equity.

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                    (b) In furtherance of the foregoing, NRG Energy
     shall not take or cause to be taken any action, the purpose or
     effect of which would give NRG Energy a preference or priority
     over the Secured Parties with respect to any Shared Collateral.
     In accordance with the terms of the Financing Documents, the
     Secured Parties shall have the right (but not the obligation)
     hereunder at all times and from time to time to apply all or
     any part of the Shared Collateral, including the proceeds
     thereof and all collections and remittances thereof (including,
     without limitation, insurance proceeds), to the repayment of
     Senior Claims and NRG Energy shall not have any right, as
     against any of the Secured Parties or any other Person, to
     receive all or any portion of the Shared Collateral until the
     Senior Claims are indefeasibly paid and satisfied in full in
     cash or cash equivalents and all  Commitments have been
     terminated.

               3.   Payments on Subordinated Claims.  So long as no
     Default or Event of Default shall have occurred and be
     continuing or would occur as a result of such payments, a
     holder of a Subordinated Claim may receive payments on such
     Subordinated Claim with amounts received by the obligor on such
     Subordinated Claim as Distributions from the Borrower.

               4.   Subordination in a Bankruptcy Proceeding.  In
     the event of any Proceeding:

                    (a) All Senior Claims shall first be
     indefeasibly paid and satisfied in full in cash or cash
     equivalents before any payment (including any payment which
     may be payable to the holder of any Subordinated Claim by
     reason of the subordination of any indebtedness or other
     obligation to or guarantee of such Subordinated Claim) or
     distribution, whether in cash, securities or other property,
     shall be made to any holder of any Subordinated Claim on
     account of such Subordinated Claim;

                    (b) Any payment (including any payment which
     may be payable to the holder of any Subordinated Claim by
     reason of the subordination of any indebtedness or other
     obligation to or guarantee of such Subordinated Claim) or
     distribution of any kind or character, whether in cash,
     securities or other property which would otherwise (but for
     this Agreement) be payable or deliverable in respect of any
     Subordinated Claim shall be paid or delivered directly to the
     holders of Senior Claims for application in payment of the
     Senior Claims in accordance with the priorities then existing
     among such holders until all Senior Claims have been
     indefeasibly paid and satisfied in full in cash or cash
     equivalents;

                    (c) The holders of Senior Claims shall be
     authorized and empowered (but shall not be obligated) (i) to
     demand, sue for, collect and receive any payment or
     distribution made in respect of Subordinated Claims in such
     Proceeding and give acquittance therefor, (ii) to file claims
     and proofs of claims on behalf of holders of Subordinated
     Claims in such Proceeding, (iii) to vote all amounts owing
     with respect to the Subordinated Claims in their sole
     discretion in connection with any resolution, ar-

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     rangement, plan of reorganization, compromise, settlement or
     extension and to take all such other action (including,
     without limitation, the right to participate in any
     composition of creditors and the right to vote at creditors'
     meetings for the election of trustees, acceptance of plans and
     otherwise), in their own names or in the names of the holders
     of Subordinated Claims or otherwise, as the holders of Senior
     Claims may deem necessary or advisable for the enforcement of
     this Agreement; and

                    (d) Each holder of Subordinated Claims shall
     duly and promptly take such action as may be requested at any
     time and from time to time by any of the holders of Senior
     Claims to collect hereunder and to file appropriate proofs of
     claim in respect thereof and to execute and deliver such
     powers of attorney, assignments or other instruments as may be
     requested by any of the holders of Senior Claims in order to
     enable the holders of Senior Claims to enforce any and all
     claims upon or in respect of the Subordinated Agreements and
     to collect and receive any and all payments or distributions
     which may be payable or deliverable at any time upon or in
     respect of any Subordinated Claim.

               5.   Subordination Upon an Event of Default.  Upon
     the occurrence of a Default or an Event of Default, or any
     event that constitutes a "default" or an "event of default"
     under any Financing Document (other than in circumstances when
     the provisions of Section 4 of this Agreement are applicable),
     then, unless and until such Default, Event of Default or other
     event, as the case may be, shall have been remedied or waived
     or shall have ceased to exist, no direct or indirect payment
     (in cash, property or securities or by set-off or otherwise),
     including any payment to the holder of any Subordinated Claim
     by reason of the subordination of any indebtedness or other
     obligation to or any guarantee of such Subordinated Claim,
     shall be made or agreed to be made on account of any
     Subordinated Claim, or as a sinking fund for any Subordinated
     Claim, or in respect of any redemption, retirement, purchase
     or other acquisition of any Subordinated Claim.

               6.   Turnover of Improper Payments.  If any payment
     or distribution of any character, whether in cash, securities
     or other property, or any security, shall be received by any
     holder of any Subordinated Claim in contravention of any of
     the terms hereof and before all Senior Claims have been
     indefeasibly paid in full in cash or cash equivalents and all
     Commitments have been terminated, such payment or distribution
     or security shall be received in trust for the benefit of, and
     shall forthwith be paid over or delivered and transferred to,
     the holders of Senior Claims at the time outstanding in
     accordance with the priorities then existing among such
     holders for application to the payment of all Senior Claims
     remaining unpaid, to the extent necessary to pay all such
     Senior Claims in full.  In the event of the failure of any
     holder of any Subordinated Claim to endorse or assign any such
     payment, distribution or security, each holder of any Senior
     Claim is hereby irrevocably authorized to endorse or assign
     the same.

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               7.   Limitation on Actions.  (a) Each holder of a
     Subordinated Claim (or any instrument evidencing the same) by
     acceptance thereof agrees and undertakes that, without the
     prior written consent of the Collateral Agent (as directed by
     the Agent Bank, acting in accordance with the Credit
     Agreement), prior to the date on which all Senior Claims shall
     have been indefeasibly paid in full in cash or cash
     equivalents and all Commitments shall have been terminated:

                    (i) such holder will not take, obtain or hold
          (or permit anyone acting on its behalf to take, obtain or
          hold) any assets of NRGG Funding or NRGMI, whether as a
          result of any administrative, legal or equitable action,
          or otherwise, in violation of this Agreement;

                    (ii) such holder will not accelerate payment of
          such Subordinated Claim or otherwise require such
          Subordinated Claim to be paid prior to its stated or
          scheduled maturity date;

                    (iii) such holder will not commence, prosecute
          or participate in (A) any administrative, legal or
          equitable action against NRGG Funding or NRGMI relating
          to any Subordinated Claim, including, without limitation,
          any Proceeding, (B) any other administrative, legal or
          equitable action relating to any Subordinated Claim or
          (C) any action to enforce or collect any judgment
          obtained in respect of, or to enforce or exercise
          remedies arising under or pursuant to any Lien or other
          security interest securing, any Subordinated Claim; and

                    (iv) such holder shall not in any manner
          foreclose upon, take possession of or attempt to realize
          on any of the Shared Collateral.

                    (b) If any holder of a Subordinated Claim, in
     violation of the provisions herein set forth, shall commence,
     prosecute or participate in any suit, action, case or
     Proceeding referred to in clause (a) above, NRGG Funding or
     NRGMI, as the case may be, may interpose as a defense or plea
     the provisions set forth herein, and any holder of any Senior
     Claim may intervene and interpose such defense or plea in its
     own name or in the name of NRGG Funding or NRGMI, as the case
     may be, and shall, in any event, be entitled to restrain the
     enforcement of the provisions of the Subordinated Claims in
     its own name or in the name of NRGG Funding or NRGMI, as the
     case may be, in the same suit, action, case or Proceeding or
     in any independent suit, action, case or Proceeding.

               8.   Disposition or Release of Collateral.  If at
     any time or from time to time after the occurrence of an Event
     of Default, the Shared Collateral, or any portion thereof, is
     in any manner sold or otherwise transferred, each holder of a
     Subordinated Claim shall be deemed to have given irrevocable
     consent to such disposition if the Collateral Agent (as
     directed by the Agent Bank, acting in accordance with the
     Credit

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     Agreement) for any reason consents to such disposition, and in
     any event no holder of a Subordinated Claim shall be entitled
     to receive any proceeds (cash or non-cash) of such disposition
     unless and until all of the Senior Claims have been
     indefeasibly paid in full in cash or cash equivalents and all
     Commitments have been terminated.  In the event of such
     disposition of all or any portion of the Shared Collateral,
     each holder of a Subordinated Claim shall, without further
     consideration, execute any and all instruments of release as
     the Collateral Agent shall require, failing which the
     Collateral Agent shall have the right to execute any such
     release on behalf of and as attorney-in-fact for such holder,
     which power of attorney shall be irrevocable.

               9.   Breach of Agreement.  If NRG Energy or any
     other holder of a Subordinated Claim breaches any of the
     provisions of this Agreement, or if any payment is made on any
     Subordinated Claim that is not permitted by the provisions of
     this Agreement, the holders of Senior Claims shall have the
     right to declare any or all of such Senior Claims due and
     payable and pursue all of their rights and remedies under
     applicable state or federal Law.  Nothing herein contained,
     however, is intended to compel NRG Energy or the Secured
     Parties at any time to declare NRGG Funding, NRGMI or the
     Borrower, as the case may be, to be in default under their
     respective agreements with NRGG Funding, NRGMI or the
     Borrower, as the case may be.  All rights and remedies of NRG
     Energy and the Secured Parties, respectively, with respect to
     the Shared Collateral, the Borrower, NRGG Funding, or NRGMI
     and any other obligor concerning the Senior Claims or the
     Subordinated Claims, respectively, are cumulative and not
     alternative.

               10.  No Prejudice or Impairment.  (a)  The rights
     under these subordination provisions of the holders of any of
     the Senior Claims as against the holders of any of the
     Subordinated Claims shall remain in full force and effect
     without regard to, and shall not be impaired or affected by:
                    (i) any act or failure to act on the part of
          the Borrower, NRGG Funding or NRGMI;

                    (ii) any extension or indulgence in respect of
          any payment or prepayment of any Senior Claim or any part
          thereof or in respect of any other amount payable to any
          holder of any Senior Claim;

                    (iii) any amendment, modification or waiver of,
          or addition or supplement to, or deletion from, or
          compromise, release, consent or other action in respect
          of, any of the terms of any Senior Claim, any Senior
          Agreement or any other agreement which may be made
          relating to any Senior Claim;

                    (iv) any exercise or non-exercise by the holder
          of any Senior Claim of any right, power, privilege or
          remedy under or in respect of such Senior Claim, the
          Senior Agreements or this Agreement or any waiver of any
          such right,

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          power, privilege or remedy or of any default in respect
          of such Senior Claim, the Senior Agreements or this
          Agreement, or any receipt by the holder of any Senior
          Claim of any security, or any failure by such holder to
          perfect a security interest in, or any release by such
          holder of, any security for the payment of such Senior
          Claim;

                    (v) any merger or consolidation of the
          Borrower, NRGG Funding or NRGMI or any of their
          respective subsidiaries into or with any other Person, or
          any sale, lease or transfer of any or all of the assets
          of the Borrower, NRGG Funding or NRGMI or any of their
          respective subsidiaries to any other Person;

                    (vi) absence of any notice to, or knowledge by,
          any holder of any Subordinated Claim of the existence or
          occurrence of any of the matters or events set forth in
          the foregoing subdivisions (i) through (v); or

                    (vii) any other circumstance.

                    (b)  Each holder of a Subordinated Claim
     unconditionally waives (i) notice of any of the matters
     referred to in clause (a) of this Section 10, (ii) all notices
     which may be required, whether by statute, rule of law or
     otherwise, to preserve intact any rights of any holder of any
     Senior Claim against the Borrower, NRGG Funding or NRGMI,
     including, without limitation, any demand, presentment and
     protest, proof of notice of nonpayment under any Senior Claim
     or the Senior Agreements, and notice of any failure on the
     part of the Borrower, NRGG Funding or NRGMI to perform and
     comply with any covenant, agreement, term or condition of the
     Senior Claims or the Senior Agreements, (iii) any right to the
     enforcement, assertion or exercise by any holder of any Senior
     Claim of any right, power, privilege or remedy conferred in
     such Senior Claim or the Senior Agreements, or otherwise, (iv)
     any requirement of diligence on the part of any holder of any
     Senior Claim, (v) any requirement on the part of any holder of
     any Senior Claim to mitigate damages resulting from any
     default under such Senior Claim or the Senior Agreements, and
     (vi) any notice of any sale, transfer or other disposition of
     any Senior Claim by any holder thereof.

                    (c) The obligations of the holders of
     Subordinated Claims under this Agreement shall continue to be
     effective, or be reinstated, as the case may be, if at any
     time any payment in respect of any Senior Claim, or any other
     payment to any holder of any Senior Claim in its capacity as
     such, is rescinded or must otherwise be restored or returned
     by the holder of such Senior Claim upon the occurrence of any
     Proceeding, or upon or as a result of the appointment of a
     receiver, intervenor or conservator of, or trustee or similar
     official for, the Borrower, NRGG Funding, NRGMI or any
     substantial part of their respective properties, or otherwise,
     all of though such payment had not been made.

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               11.  Subrogation.  No holder of any Subordinated
     Claim shall have any subrogation or other rights as the holder
     of a Senior Claim, and each holder of any Subordinated Claim
     hereby waives all such rights of subrogation and all rights of
     reimbursement or indemnity whatsoever and all rights of
     recourse to any security for any Senior Claim, until such time
     as all of the Senior Claims have been indefeasibly paid in
     full in cash or cash equivalents and all Commitments have been
     terminated.

               12.  Legend on Subordinated Claims.  Each instrument
     evidencing a Subordinated Claim including, without limitation,
     the NRGG Loan Note, shall contain the following legend
     conspicuously noted on the face thereof:  "THIS [NAME OF
     INSTRUMENT] IS SUBJECT TO THE SUBORDINATION PROVISIONS SET
     FORTH IN THE SUBORDINATION AGREEMENT, DATED AS OF DECEMBER 10,
     1997, BETWEEN NRG ENERGY, INC. AND THE CHASE MANHATTAN BANK IN
     ITS CAPACITY AS COLLATERAL AGENT"; and shall specifically
     state that a copy of this Agreement is on file with the
     Borrower, NRGG Funding and NRGMI and is available for
     inspection at their respective offices.

               13.  Notices.  Except as otherwise expressly
     provided herein, all notices, requests and demands to or upon
     the respective parties hereto to be effective shall be in
     writing (including by telecopy, telex or cable communication),
     and shall be deemed to have been duly given or made when
     delivered by hand, or upon actual receipt if deposited in the
     United States mail, postage prepaid, or, in the case of telex
     notice, when answerback is received, or, in the case of
     telecopy notice, when confirmation is received, or, in the
     case of a nationally recognized overnight courier service, one
     Business Day after delivery to such courier service,
     addressed, in the case of each party hereto, at its address
     specified below, or to such other address as may be designated
     by any party in a written notice to the other parties hereto;
     provided that notices and communications to the Collateral
     Agent shall not be effective until received by the Collateral
     Agent:

          If to NRG Energy:
          NRG Energy, Inc.
          1221 Nicollet Mall, Suite 700
          Minneapolis, MN 55403-2445
          Attention:  President
          Telephone:  (612) 373-5400
          Facsimile:  (612) 373-5430

          If to the Collateral Agent:
          The Chase Manhattan Bank
          450 West 33rd Street, 15th Floor
          New York, NY 10001
          Attention:  Annette M. Marsula, Assistant Vice President
          Telephone:  (212) 946-7557

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          Facsimile:  (212) 946-8177/8178

               14.  Successors and Assigns.  This Agreement shall
     be binding upon and inure to the benefit of the parties hereto
     and each of their respective successors and assigns; provided
     that prior to any transfer by NRG Energy of any of its
     interests under any Subordinated Agreement, whether now
     existing or hereafter arising, the transferee of such
     interests shall acknowledge this Agreement and agree, in
     writing, to be bound by the terms and conditions hereof.

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

               16.  No Waiver; Remedies Cumulative.  No failure to
     exercise, and no delay in exercising, any right, power or
     privilege under this Agreement shall operate as a waiver
     thereof; nor shall any single or partial exercise of any
     right, power or privilege under this Agreement preclude any
     other or further exercise thereof or the exercise of any other
     right, power or privilege.  The rights and remedies provided
     in this Agreement and in any agreement relating to any of the
     Senior Claims and all other agreements, instruments and
     documents referred to in any of the foregoing are cumulative
     and shall not be exclusive of any rights or remedies provided
     by law.

               17.  Severability.  In case any provision contained
     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.

               18.  Governing Law; Submission to Jurisdiction and
     Venue; Waiver of Jury Trial.  (a) 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).

                    (b) Any legal action or proceeding against NRG
     Energy with respect to this Agreement may be brought in the
     courts of the State of New York in the County of New York or
     of the United States for the Southern District of New York
     and, by execution and delivery of this Agreement, NRG Energy
     hereby irrevocably accepts for itself and in respect of its
     property, generally and unconditionally, the jurisdiction of
     the aforesaid courts.  NRG Energy agrees that a judgment,
     after exhaustion of all available appeals, in any such action
     or proceeding shall be conclusive and binding upon NRG Energy
     and may be enforced in any other jurisdiction by a suit upon
     such judgment, a certified copy of which shall be conclusive
     evidence of the judgment.  NRG Energy irre-

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     vocably consents for itself and its property to the service of
     process out of any of the aforementioned courts in any such
     action or proceeding by the mailing of copies thereof by
     registered or certified mail, postage prepaid, to NRG Energy
     at its address referred to in Section 13, such service to
     become effective thirty (30) days after such mailing.  Nothing
     herein shall affect the right of the Collateral Agent to serve
     process in any other manner permitted by law or to commence
     legal proceedings or otherwise proceed against NRG Energy in
     any other jurisdiction.

                    (c) NRG Energy hereby irrevocably waives any
     objection which it may now or hereafter have to the laying of
     venue of any of the aforesaid actions or proceedings arising
     out of or in connection with this Agreement brought in the
     courts referred to in clause (b) above and hereby further
     irrevocably waives and agrees not to plead or claim in any
     such court that any such action or proceeding brought in any
     such court has been brought in an inconvenient forum.

                    (D) WITH REGARD TO THIS AGREEMENT, NRG ENERGY
     AND THE COLLATERAL AGENT HEREBY WAIVE THE RIGHT TO A TRIAL BY
     JURY.

               19.  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.

               20.  Further Assurances.  NRG Energy shall execute
     and deliver to the Collateral Agent such further instruments,
     agreements, certificates and documents as the Collateral Agent
     shall reasonably request and shall take such further action as
     the Collateral Agent may at any time or times reasonably
     request in order to carry out the provisions or intent of this
     Agreement.

               21.  Amendments.  Neither this Agreement nor any
     Subordinated Agreement shall be amended, waived, terminated or
     modified without the prior written consent of the Collateral
     Agent (as directed by the Agent Bank, acting in accordance
     with the Credit Agreement).

               22.  Headings Descriptive.  The headings of the
     several Sections and subsections 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.

               23.  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.

                                   11

     <PAGE>

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


                              NRG ENERGY, INC.


                                                       By:  David
                                   H. Peterson
                                   Name: David H. Peterson
                                   Title: President & CEO


                              THE CHASE MANHATTAN BANK,
                                   as Collateral Agent


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