<PAGE>


                                                                    Exhibit 99.1

Press Release

SOURCE: Dynegy Inc.

Dynegy Provides Update On Expected Second Quarter
Charge and Financial Position

HOUSTON--(BUSINESS WIRE)--July 15, 2002--Dynegy Inc. (NYSE:DYN - News)

     o    Expected second quarter charge adjusted from $450 to $500 million

     o    $200 million interim financing completed

     o    Liquidity remains adequate to meet current obligations and commitments

Dynegy Inc. today announced that it will adjust its previously disclosed
estimated second quarter pre-tax charge from $450 to $500 million. The
adjustment is the result of an increase in an expected non-cash charge in the
company's natural gas marketing business. Quarter-end charges will also include
the previously disclosed impairments in the communications business and
severance expenses.

A portion of the expected natural gas marketing charge was included in Dynegy's
June 24, 2002 estimate for the second quarter charge. The company has since
determined, through a balance sheet review and reconciliation process started
early in 2002, that the natural gas marketing charge will be approximately $125
million. This amount is included in the expected $500 million second quarter
charge.

Management believes the charge is largely associated with the process of
reconciling accrued to actual results in its natural gas marketing business and
that it accumulated over a number of years. Accrual accounting for natural gas
marketing involves the estimation of gas volumes bought, sold, transported and
stored, as well as the subsequent reconciliation from estimated to actual
volumes. During the past three years, Dynegy bought and sold more than 8
trillion cubic feet of gas and processed more than one million transactions
through its natural gas marketing business. Management also believes that the
company's current systems and procedures have eliminated the reconciliation
issues that led to the charge prior to 2002.

"In early 2002 management embarked on a balance sheet review and reconciliation
process to ensure the integrity and accuracy of our financial reporting," said
Dan Dienstbier, interim chief executive officer of Dynegy Inc. "Our internal
review process revealed that as our company grew and we adjusted and combined
accounting systems there were inconsistencies in the reconciliation of and
accounting for our natural gas marketing transactions.

"We initiated the review process, identified the natural gas marketing charge
and reported it promptly," Dienstbier added.

Dynegy will record the natural gas marketing charge at the end of the second
quarter and, if necessary, correct prior period financial statements based on
its continuing review process to determine the periods affected. The company has
requested that its independent auditor,

<PAGE>




PricewaterhouseCoopers, re-audit its financial statements for 1999 and 2000.
PricewaterhouseCoopers is already conducting a re-audit of Dynegy's 2001
financial statements. Dynegy estimates that it will take the remainder of the
year to complete the three-year re-audit. PricewaterhouseCoopers will conduct an
interim review of Dynegy's quarterly financial statements for 2002 once the
re-audit has been completed.

Dynegy expects the criteria for and interpretation of hedge accounting under the
Statement of Financial Accounting Standards No. 133 (FAS 133) to be one of the
issues addressed in the re-audits. FAS 133 governs whether derivative
transactions should be accounted for on the basis of accrual or mark-to-market
accounting. During the five-quarter period ended March 31, 2002, Dynegy
accounted for certain derivative transactions as hedges of its generation
facilities. The company received in cash and recognized operating margin of
approximately $80 million in such hedge transactions on an accrual basis over
the five quarters. If Dynegy's accounting treatment relating to FAS 133 were to
change as a result of the re-audit, the income recognized over the five quarters
may be re-allocated within the period. Cash flow for the five-quarter period
would remain unaffected by a change in the timing of income statement
recognition, if any.

Financial Position Update

The company said that it has maintained adequate liquidity to meet its current
obligations and commitments. Dynegy's liquidity has ranged between $900 million
and more than $1 billion since the end of May.

Dynegy also announced that today it completed a $200 million interim financing.
The loan, which matures in six months, is secured by interests in the
Renaissance and Rolling Hills merchant power generation facilities. West LB
acted as the sole manager and agent for the transaction.

Dynegy Holdings Inc. has $200 million in senior notes and Illinois Power has $96
million in mortgage bonds that mature today. After taking into account the $200
million interim financing and payment of these maturities, Dynegy's liquidity
still remains above $900 million.

The company said its $2 billion capital plan is proceeding as scheduled. As
previously announced, Dynegy has already enhanced its liquidity by permanently
removing $301 million in ratings triggers, securing a $250 million advance on
asset sale proceeds and completing a new credit facility for its West Coast
Power joint venture that replaced approximately $100 million in letters of
credit previously posted by the company.

Second Quarter Results

Dynegy will simulcast its second quarter 2002 earnings conference call live via
the Internet on Tuesday, July 30 at 10:00 a.m. ET, 9:00 a.m. CT. The web cast
can be accessed via www.dynegy.com (click on "News and Financials"). Management
expects to report cash flow from operations of $375 to $400 million for the
first six months of 2002.

<PAGE>



About Dynegy Inc.





Dynegy Inc. is a global energy merchant. Through its owned and contractually
controlled network of physical assets and its marketing, logistics and risk
management capabilities, Dynegy provides solutions to customers in North
America, the United Kingdom and continental Europe.

Certain statements included in this news release are intended as
"forward-looking statements" under the Private Securities Litigation Reform Act
of 1995. These statements include assumptions, expectations, predictions,
intentions or beliefs about future events. Dynegy cautions that actual future
results may vary materially from those expressed or implied in any
forward-looking statements. Some of the key factors that could cause actual
results to vary materially from those expected include changes in energy
commodity prices; the timing and extent of deregulation of energy markets in
North America and Europe; the effectiveness of Dynegy's risk management policies
and procedures and the creditworthiness of customers and counterparties; the
liquidity and competitiveness of wholesale trading markets for energy
commodities; operational factors affecting Dynegy's power generation or
midstream natural gas facilities; the cost of borrowing, availability of trade
credit and other factors affecting Dynegy's financing activities, including
Dynegy's ability to execute its capital plan and to maintain its credit ratings;
the demand for and pricing of services offered by Dynegy's telecommunications
segment and the effect of general market conditions in the telecommunications
segment on customers or prospective customers and equipment and service
providers; uncertainties regarding environmental regulations or litigation and
other legal or regulatory developments affecting Dynegy's business, including
litigation relating to the terminated merger with Enron, the California power
market and shareholder claims, as well as the SEC, U.S. Attorney and CFTC
investigations primarily relating to Project Alpha and the CMS Energy trades;
general political, economic and financial market conditions; and any extended
period of war or conflict involving North America or Europe. In addition, the
results of Dynegy's balance sheet reconciliation process and the re-audit of its
1999-2001 financial statements could cause material changes to Dynegy's reported
financial results for the applicable periods, to current expectations and
estimates and to financial results for future periods. More information about
the risks and uncertainties relating to these forward-looking statements are
found in Dynegy's SEC filings, which are available free of charge on the SEC's
web site at http://www.sec.gov.