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                                                        Exhibit 10.25.4

                       INDEMNIFICATION AGREEMENT

      This INDEMNIFICATION AGREEMENT, dated as of March 21, 1997, to be
effective  as of January 1, 1997, (this "Agreement"), is  made  by  and
among  (i)  NRG  GENERATING  (PARLIN)  COGENERATION  INC.,  a  Delaware
corporation  ("NRGG Parlin"), (ii) NRG GENERATING (NEWARK) COGENERATION
INC.,  a  Delaware  corporation ("NRGG Newark"; NRGG  Newark  and  NRGG
Parlin,  collectively,  the "Borrowers"), (iii)  NRG  ENERGY,  INC.,  a
Delaware  corporation  ("NRG"),  (iv) NRG  GENERATING  (U.S.)  INC.,  a
Delaware  corporation  ("NRGG")  and (v)  CREDIT  SUISSE  FIRST  BOSTON
(formerly known as Credit Suisse, as agent ("Agent") on behalf  of  and
for  the  benefit  of  the Secured Parties (as defined  in  the  Credit
Agreement referred to below).

                          W I T N E S S E T H

      WHEREAS, the Borrowers and Agent have previously entered into the
Credit  Agreement,  dated as of May 17, 1996,  by  and  among  (i)  the
Borrowers,  (ii) Credit Suisse First Boston and each purchasing  lender
(the  "Lenders") and (iii) Agent (as the same may be amended,  modified
or supplemented from time to time, the "Credit Agreement"), pursuant to
which  the  Lenders  have  provided the Loans and  the  Commitments  to
Borrowers  on  the  terms  and  conditions  set  forth  in  the  Credit
Agreement;

      WHEREAS, NRGG Parlin and Stewart & Stevenson Operations, Inc.,  a
Delaware corporation ("SSOI"), entered into that certain Operations and
Maintenance Agreement (the "Parlin SSOI Agreement"), dated as of May 1,
1996;

     WHEREAS, NRGG Newark and SSOI entered into that certain Operations
and Maintenance Agreement (the "Newark SSOI Agreement"; the Parlin SSOI
Agreement  and  the  Newark  SSOI Agreement,  collectively,  the  "SSOI
Agreements") dated as of May 1, 1996;

     WHEREAS,  on October 28, 1996, NRGG Newark terminated  the  Newark
SSOI  Agreement  pursuant to and in accordance with  Section  XII(1)(e)
thereof;

     WHEREAS,  on December 20, 1996, NRGG Parlin terminated the  Parlin
SSOI  Agreement  pursuant to and in accordance with  Section  XII(1)(e)
thereof;

      WHEREAS, NRGG Newark has entered into that certain Operating  and
Maintenance  Agreement (the "POI Newark Agreement") dated  November  8,
1996 between NRGG Newark and Power Operations Inc. ("POI") pursuant  to
which  the  POI  agreed to operate and maintain NRGG Newark's  electric
generation facility;

      WHEREAS, NRGG Parlin has entered into that certain Operating  and
Maintenance  Agreement (the "POI Parlin Agreement") dated December  31,
1996  between  NRGG  Parlin and POI pursuant to  which  POI  agreed  to
operate and maintain NRGG Parlin's electric generation facility;

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     WHEREAS, NRG owns 100% of the issued and outstanding capital stock
of  POI,  and NRG and is willing to indemnify the Borrowers for certain
costs  and expenses incurred in connection with the termination of  the
SSOI Agreements;

      WHEREAS, the Borrowers are subsidiaries of NRGG, and NRGG is also
willing  to  indemnify  the Borrowers for certain  costs  and  expenses
incurred in connection with the termination of the SSOI Agreements

      NOW  THEREFORE, for and in consideration of the premises and  the
aforesaid  loan,  and  for other good and valuable  consideration,  the
receipt  and sufficiency of which are hereby acknowledged, the  parties
hereto hereby agree as follows:

     1.   Definitions.

     Capitalized terms used herein and not otherwise defined shall have
the  meanings  ascribed to such terms in the Credit Agreement,  to  the
extent defined therein.

     2.   Indemnity.

      NRGG  and  NRG,  as set forth in the following  sentence,  hereby
indemnify  and  agree  to  save and hold NRGG Newark  and  NRGG  Parlin
harmless  from  and  against any and all losses,  liabilities,  claims,
demands,  assessments, actions, suits, proceedings, damages, costs  and
expenses  including without limitation, reasonable attorneys' fees  and
disbursements  (including costs, expenses and legal  fees  incurred  by
NRGG  Newark and NRGG Parlin, or their respective officers,  directors,
agents  and  employees  (each of which is  herein  referred  to  as  an
"Indemnified  Person") incident to the foregoing or to  enforcing  said
rights of defense and indemnity), arising out of or in connection  with
NRGG  Newark's  and NRGG Parlin's termination of (i)  the  Newark  SSOI
Agreement (the "SSOI Newark Losses") and (ii) the Parlin SSOI Agreement
(the  "SSOI  Parlin Losses"; with SSOI Newark Losses  and  SSOI  Parlin
Losses,   being  collectively  referred  to  as  the  "SSOI   Losses"),
respectively.   As  between each other, NRGG and NRG  agree  that  they
shall  allocate SSOI Losses as follows: (1) NRGG shall  pay  the  first
$200,000  of  SSOI  Losses; and (2) NRG shall pay all  SSOI  Losses  in
excess of $200,000 to Borrowers.  NRGG and NRG agree to reimburse  each
other  as required to achieve the above result, provided that NRG,  its
officers,  directors, agents and employees (each  of  which  is  herein
referred  to  as a "NRG Indemnified Person") shall not be  entitled  to
receive  an  amount  of indemnity pursuant to this Section  2  for  the
amount of any SSOI Losses as and to the extent such amount, when  added
to  all  amounts  previously paid or reimbursed to  a  NRG  Indemnified
Person pursuant to this Section 2 would exceed $200,000.

          NRG  shall  indemnify,  defend and hold  harmless  NRGG,  its
officers,  directors,  agents and employees and NRGG  shall  indemnify,
defend  and hold harmless NRG Indemnified Persons promptly upon  demand
at  any time and from time to time, against any and all SSOI Losses  as
provided in this Section 2.

                                   2

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          If  any action, suit or proceeding shall be commenced against
or  any  claim, demand or assessment be asserted against an Indemnified
Person  in  respect of which an Indemnified Person proposes  to  demand
defense  and indemnification pursuant to this Section 2, and the  total
amount  sought in all such actions, suits, proceedings, claims, demands
and  assessments is estimated by the applicable Borrower to be $200,000
or  less,  then  NRGG shall be notified to that affect with  reasonable
promptness and shall have the right, but not the obligation, to  assume
the  entire  control of the defense, compromise or settlement  thereof,
including, at NRGG's expense, employment of counsel satisfactory to the
Indemnified Person and in connection therewith, the Indemnified  Person
shall   cooperate  fully  to  make  available  to  NRGG  all  pertinent
information  under its control; provided, that failure to provide  such
notice  shall not relieve NRG or NRGG of their obligation to  indemnify
hereunder.

     If  any  action, suit or proceeding shall be commenced against  or
any  claim,  demand  or assessment be asserted against  an  Indemnified
Person  in  respect of which an Indemnified Person proposes  to  demand
defense and indemnification pursuant to this Section 2, the control  of
which  action,  suit, proceeding, claim, demand, or assessment  is  not
assigned pursuant to the immediately preceding paragraph, NRG shall  be
notified  to that affect with reasonable promptness and shall have  the
right,  but  not  the obligation, to assume the entire control  of  the
defense, compromise or settlement thereof, including, at NRG's expense,
employment  of  counsel satisfactory to the Indemnified Person  and  in
connection therewith, the Indemnified Person shall cooperate  fully  to
make  available  to  NRG all pertinent information under  its  control;
provided, that failure to provide such notice shall not relieve NRG  or
NRGG of their obligation to indemnify hereunder.

     3.   Notice; Contest or Dispute of Charges

     Borrowers shall provide NRG and NRGG with prompt written notice of
any  claim  for which indemnification is or may be sought  pursuant  to
Section  2 hereof; provided, that failure to provide such notice  shall
not  relieve  NRG  or NRGG of their obligation to indemnify  hereunder,
except  to  the  extent that the delay in provision of such  notice  is
prejudicial to NRG or NRGG.

      If  Borrowers shall obtain a repayment from a third party of  any
claim  paid  by  NRG  or NRGG pursuant to Section  2,  Borrowers  shall
promptly pay to NRG or NRGG as the case may be (i) the amount  of  such
repayment,  together  with any interest (other than  interest  for  the
period, if any, after such claim was paid by Borrowers until such claim
was paid or reimbursed by NRG or NRGG) received by Borrowers on account
of such repayment net of expenses and (ii) the net amount, after taking
into  account any taxes actually payable as a result of the receipt  of
such  refund  or  associated interest, of any Federal, state  or  local
income  taxes saved by Borrowers in respect of its payment  to  NRG  or
NRGG of amounts referred to in clause (i) above and its payment to  NRG
or  NRGG  of  amounts pursuant to this clause (ii).  In no event  shall
Borrowers  be  obligated to pay to either NRG or  NRGG  more  than  the
amount actually received by Borrowers.

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     4.   Method of Payment.

     Any payment required to be made pursuant to Section 2 hereof shall
be  paid  in immediately available funds within 10 Business Days  after
Borrowers or Agent makes written demand upon NRG and/or NRGG,  together
with  reasonable  documentation  of the  liability  of  expense  to  be
indemnified  pursuant  to Section 2.  Any such payment  shall  be  made
directly to Agent for deposit in the Project Account.

     5.   No Setoff.

      The  payment  obligations  of NRG and  NRGG  hereunder  shall  be
satisfied  in  all  events at the times and in the  amounts  set  forth
herein without offset, abatement, withholding or reduction of any kind.

     6.   Enforcement.

     Both NRG and NRGG hereby agree that Agent on behalf of the Secured
Parties  and/or Borrowers shall have the right to directly enforce  the
provisions  hereof against each of them and NRG and NRGG agree  to  pay
all  costs, including reasonable attorneys' fees, actually incurred  by
Agent with respect to any such enforcement in accordance with Section 2
hereof.

     7.   Notices.

      All  notices, demands, requests and other communications required
or  permitted  hereunder shall be in writing, and shall  be  given  and
deemed  to have been given in accordance with Section 8.1 of the Credit
Agreement  and the information set forth immediately below shall  apply
to NRG and NRGG:

     If to NRG:

     1221 Nicollet Mall
     Suite 700
     Minneapolis, Minnesota  55403
     Attention:  President
     Telecopy:

     If to NRGG:

     NRG Generating (U.S.) Inc.
     1221 Nicollet Mall
     Suite 610
     Minneapolis, Minnesota  55403
     Attention:  President
     Telecopy:  (612) 373-8833

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     8.   Survival of Representations and Warranties.

     All agreements, representations and warranties made herein or made
in  writing by NRG and/or NRGG in connection herewith shall survive the
execution  and  delivery of this Agreement and the performance  of  the
obligations contained herein, and shall be deemed to be material and to
have  been relied upon by Agent and the Secured Parties, regardless  of
any investigation made by or on behalf of Agent or the Secured Parties.

     9.   Prior Agreements.

     The parties hereto hereby agree this Agreement supersedes (i) that
certain  Indemnification  Agreement (the "NRGG  Newark  Indemnification
Agreement")  dated as of November 8, 1996, among NRG Newark,  NRGG  and
Agent  and  (ii)  that certain Indemnification Agreement  (the  "Parlin
Indemnification Agreement") dated as of ____________, 199__  among  NRG
Parlin, NRGG and Agent.

     10.  Severability.

     Any provision of this Agreement which is prohibited, unenforceable
or  not  authorized in any jurisdiction shall, as to such jurisdiction,
be  ineffective to the extent of such prohibition, unenforceability  or
non-authorization, without invalidating the remaining provisions hereof
or affecting the validity, enforceability or legality of such provision
in  any  other jurisdiction. Where provisions of any law or  regulation
resulting  in such prohibition or unenforceability may be  waived  they
are  hereby waived by NRG, NRGG and Agent to the full extent  permitted
by  law  so  that  this  Agreement shall be  deemed  a  valid,  binding
agreement, enforceable in accordance with its terms.

     11.  Amendment.

      This  Agreement may be amended, modified or rescinded only  by  a
writing  expressly referring to this Agreement and signed  by  all  the
parties hereto.

     12.  Successors and Assigns.

      This Agreement shall be binding upon and inure to the benefit  of
the  parties  hereto  and  their respective  successors  and  permitted
assigns.   In  the event of any assignment or transfer by  any  Secured
Party  of any instrument evidencing all or any part of the Obligations,
the  holder  of such instrument shall, subject to the Credit Agreement,
be entitled to the benefits of this Agreement.

     13.  Number and Gender.

     Whenever used in this Agreement, the singular number shall include
the plural and the plural the singular, and the use of any gender shall
be applicable to all genders.

                                   5

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     14.  Headings Descriptive.

      The  captions or headings of the several sections an  subsections
and   the  table  of  contents  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.

     15.  Governing Law; Jurisdiction; Waiver of Trial by Jury.

      (a)   Governing  Law.  This Agreement shall be  governed  by  and
construed in accordance with the laws of the State of New York  without
regard to the conflict of law rules thereof.

     (b)  Jurisdiction.  With respect to any legal action or proceeding
brought by Agent or the Secured Parties against NRG or NRGG arising out
of   or  in  connection  with  this  Agreement,  NRG  and  NRGG  hereby
irrevocably  (i)  consent to the jurisdiction of any state  or  federal
court located in the State of New York, (ii) consent to the service  of
process outside the territorial jurisdiction of said courts in any such
action  or  proceeding by mailing copies thereof by  registered  United
States mail, postage prepaid, to the address specified by NRG or  NRGG,
as  applicable, for the receipt of notices if such address  is  outside
such  territorial  jurisdiction and (iii) waives any objection  to  the
venue  of  the  aforesaid  courts.  NRG  and  NRGG  hereby  irrevocably
designate,  appoint  and empower CT Corporation  System  (the  "Process
Agent",  which has consented thereto) as agent to receive  for  and  on
behalf  of  NRG and NRGG service of process in the State of  New  York.
Both  NRG  and NRGG agree they will at all times continuously  maintain
either a registered office or an agent to receive service of process in
the  State  of   New York on behalf of themselves and their  properties
with respect to this Agreement.

     (c)  Waiver of Trial by Jury.  WITH REGARD TO THIS AGREEMENT, EACH
OF THE PARTIES HEREBY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION
OR PROCEEDING AND FOR ANY COUNTERCLAIM THEREIN.

     16.  Counterparts.

      This  Agreement may be executed in several counterparts, each  of
which  shall be an original, but all of which together shall constitute
one and the same agreement.

     17.  Effective Date.

     The parties hereto agree that the effective date of this agreement
shall be January 1, 1997.


     18.  Term.

     This Agreement shall continue in effect until repayment in full of
all Obligations.

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          IN WITNESS WHEREOF, the parties hereto have executed this
          Agreement through their duly authorized representatives as of
          the date first written above.



                              NRG GENERATING (PARLIN) COGENERATION INC.

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


                              NRG GENERATING (NEWARK) COGENERATION INC.

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


     NRG ENERGY, INC.

                              By:/s/ Ronald J. Will
                                   Name:  Ronald J. Will
                                   Title: Vice President


     NRG GENERATING (U.S.) INC.

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


     CREDIT SUISSE FIRST BOSTON, as Agent

                              By:/s/ Guy Cirincione
                                    Name:  Guy Cirincione
                                    Title: Director

                              By:/s/ Andrew B. Leon
                                    Name:  Andrew B. Leon
                                    Title: Associate

                                   7