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                                                                   EXHIBIT 10.10

                            LONG-TERM INCENTIVE PLAN

                                       OF

                             RELIANT RESOURCES, INC.

         1. PLAN. This Long-Term Incentive Plan of Reliant Resources, Inc. (the
"Plan") was adopted by Reliant Resources, Inc. (the "Company") to reward certain
corporate officers and employees of Reliant Resources, Inc., certain independent
contractors and nonemployee directors of Reliant Resources, Inc.

         2. OBJECTIVES. The purpose of this Plan is to further the interests of
the Company, its Subsidiaries and its shareholders by providing incentives in
the form of awards to employees, independent contractors and directors. Such
awards will recognize and reward outstanding performances and individual
contributions and give Participants in the Plan an interest in the Company
parallel to that of the shareholders, thus enhancing the proprietary and
personal interest of such Participants in the Company's continued success and
progress. This Plan will also enable the Company and its Subsidiaries to attract
and retain such employees, independent contractors and directors.

         3. DEFINITIONS. As used herein, the terms set forth below shall have
the following respective meanings:

                  "ANNUAL DIRECTOR AWARD DATE" means, for each year beginning on
         or after the IPO Closing Date, the first business day of the month next
         succeeding the date upon which the annual meeting of stockholders of
         the Company is held in such year.

                  "AUTHORIZED OFFICER" means the Chairman of the Board or the
         Chief Executive Officer of the Company (or any other senior officer of
         the Company to whom either of them shall delegate the authority to
         execute any Award Agreement, where applicable).

                  "AWARD" means an Employee Award, a Director Award or an
         Independent Contractor Award.

                  "AWARD AGREEMENT" means any Employee Award Agreement, Director
         Award Agreement or Independent Contractor Award Agreement.

                  "BOARD" means the Board of Directors of the Company.

                  "CASH AWARD" means an award denominated in cash.

                  A "CHANGE OF CONTROL" shall be deemed to have occurred upon
         the occurrence of any of the following events:

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                           (a) 30% OWNERSHIP CHANGE: Any Person makes an
                  acquisition of Outstanding Voting Stock and is, immediately
                  thereafter, the beneficial owner of 30% or more of the then
                  Outstanding Voting Stock, unless such acquisition is made
                  directly from the Company in a transaction approved by a
                  majority of the Incumbent Directors; or any group is formed
                  that is the beneficial owner of 30% or more of the Outstanding
                  Voting Stock; or

                           (b) BOARD MAJORITY CHANGE: Individuals who are
                  Incumbent Directors cease for any reason to constitute a
                  majority of the members of the Board; or

                           (c) MAJOR MERGERS AND ACQUISITIONS: Consummation of a
                  Business Combination unless, immediately following such
                  Business Combination, (i) all or substantially all of the
                  individuals and entities that were the beneficial owners of
                  the Outstanding Voting Stock immediately prior to such
                  Business Combination beneficially own, directly or indirectly,
                  more than 70% of the then outstanding shares of voting stock
                  of the parent corporation resulting from such Business
                  Combination in substantially the same relative proportions as
                  their ownership, immediately prior to such Business
                  Combination, of the Outstanding Voting Stock, (ii) if the
                  Business Combination involves the issuance or payment by the
                  Company of consideration to another entity or its
                  shareholders, the total fair market value of such
                  consideration plus the principal amount of the consolidated
                  long-term debt of the entity or business being acquired (in
                  each case, determined as of the date of consummation of such
                  Business Combination by a majority of the Incumbent Directors)
                  does not exceed 50% of the sum of the fair market value of the
                  Outstanding Voting Stock plus the principal amount of the
                  Company's consolidated long-term debt (in each case,
                  determined immediately prior to such consummation by a
                  majority of the Incumbent Directors), (iii) no Person (other
                  than any corporation resulting from such Business Combination)
                  beneficially owns, directly or indirectly, 30% or more of the
                  then outstanding shares of voting stock of the parent
                  corporation resulting from such Business Combination and (iv)
                  a majority of the members of the board of directors of the
                  parent corporation resulting from such Business Combination
                  were Incumbent Directors of the Company immediately prior to
                  consummation of such Business Combination; or

                           (d) MAJOR ASSET DISPOSITIONS: Consummation of a Major
                  Asset Disposition unless, immediately following such Major
                  Asset Disposition, (i) individuals and entities that were
                  beneficial owners of the Outstanding Voting Stock immediately
                  prior to such Major Asset Disposition beneficially own,
                  directly or indirectly,

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                  more than 70% of the then outstanding shares of voting stock
                  of the Company (if it continues to exist) and of the entity
                  that acquires the largest portion of such assets (or the
                  entity, if any, that owns a majority of the outstanding voting
                  stock of such acquiring entity) and (ii) a majority of the
                  members of the board of directors of the Company (if it
                  continues to exist) and of the entity that acquires the
                  largest portion of such assets (or the entity, if any, that
                  owns a majority of the outstanding voting stock of such
                  acquiring entity) were Incumbent Directors of the Company
                  immediately prior to consummation of such Major Asset
                  Disposition.

For purposes of the foregoing,

                           (1) the term "Person" means an individual, entity or
                  group;

                           (2) the term "group" is used as it is defined for
                  purposes of Section 13(d)(3) of the Securities Exchange Act of
                  1934 (the "Exchange Act");

                           (3) the term "beneficial owner" is used as it is
                  defined for purposes of Rule 13d-3 under the Exchange Act;

                           (4) the term "Outstanding Voting Stock" means
                  outstanding voting securities of the Company entitled to vote
                  generally in the election of directors; and any specified
                  percentage or portion of the Outstanding Voting Stock (or of
                  other voting stock) shall be determined based on the combined
                  voting power of such securities;

                           (5) the term "Incumbent Director" means a director of
                  the Company (x) who was a director of the Company on the IPO
                  Closing Date or (y) who becomes a director subsequent to such
                  date and whose election, or nomination for election by the
                  Company's shareholders, was approved by a vote of a majority
                  of the Incumbent Directors at the time of such election or
                  nomination, except that any such director shall not be deemed
                  an Incumbent Director if his or her initial assumption of
                  office occurs as a result of an actual or threatened election
                  contest or other actual or threatened solicitation of proxies
                  by or on behalf of a Person other than the Board;

                           (6) the term "election contest" is used as it is
                  defined for purposes of Rule 14a-11 under the Exchange Act;

                           (7) the term "Business Combination" means (x) a
                  merger or consolidation involving the Company or its stock or

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                  (y) an acquisition by the Company, directly or through one or
                  more subsidiaries, of another entity or its stock or assets;

                           (8) the term "parent corporation resulting from a
                  Business Combination" means the Company if its stock is not
                  acquired or converted in the Business Combination and
                  otherwise means the entity which as a result of such Business
                  Combination owns the Company or all or substantially all the
                  Company's assets either directly or through one or more
                  subsidiaries; and

                           (9) the term "Major Asset Disposition" means the sale
                  or other disposition in one transaction or a series of related
                  transactions of 70% or more of the assets of the Company and
                  its subsidiaries on a consolidated basis; and any specified
                  percentage or portion of the assets of the Company shall be
                  based on fair market value, as determined by a majority of the
                  Incumbent Directors.

                  Notwithstanding anything herein to the contrary, (i) solely
         for purposes of this Change of Control definition and the terms defined
         herein, prior to the proposed spin-off of the Company from Reliant, the
         term "Company" shall mean either the Company or Reliant; and (ii)
         neither the IPO nor the proposed spin-off of the Company from Reliant
         will constitute a Change of Control as contemplated herein.

                  "CODE" means the Internal Revenue Code of 1986, as amended
         from time to time.

                  "COMMITTEE" means the Compensation Committee of the Board or
         such other committee of the Board as is designated by the Board to
         administer the Plan; provided, however, that prior to the IPO Closing
         Date, "Committee" shall mean the Compensation Committee of the Board of
         Directors of Reliant.

                  "COMMON STOCK" means the Common Stock, par value $0.001 per
         share, of the Company.

                  "COMPANY" means Reliant Resources, Inc., a Delaware
         corporation, or any successor thereto.

                  "DIRECTOR AWARD" means a Director Option or Stock Award.

                  "DIRECTOR AWARD AGREEMENT" means an agreement setting forth
         the terms, conditions and limitations applicable to a Director Award,
         in such form as the Company may prescribe.

                  "DIRECTOR OPTION" means a Nonqualified Stock Option granted to
         a Nonemployee Director pursuant to paragraph 9 hereof.

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                  "DIVIDEND EQUIVALENTS" means, with respect to shares of
         Restricted Stock that are to be issued at the end of the Restriction
         Period, an amount equal to all dividends and other distributions (or
         the economic equivalent thereof) that are payable to stockholders of
         record during the Restriction Period on a like number of shares of
         Common Stock.

                  "EMPLOYEE" means an employee of the Company or any of its
         Subsidiaries and an individual who has agreed to become an employee of
         the Company or any of its Subsidiaries and is expected to become such
         an employee within the following six months.

                  "EMPLOYEE AWARD" means any Option, SAR, Stock Award, Cash
         Award or Performance Award granted, whether singly, in combination or
         in tandem, to a Participant who is an Employee pursuant to such
         applicable terms, conditions and limitations (including treatment as a
         Performance Award) as the Committee may establish in order to fulfill
         the objectives of the Plan.

                  "EMPLOYEE AWARD AGREEMENT" means a written agreement setting
         forth the terms, conditions and limitations applicable to an Employee
         Award.

                  "FAIR MARKET VALUE" of a share of Common Stock means, as of a
         particular date, (i) if shares of Common Stock are listed on a national
         securities exchange, the average of the highest and lowest sales price
         per share of Common Stock on the consolidated transaction reporting
         system for the principal national securities exchange on which shares
         of Common Stock are listed on that date, or, if there shall have been
         no such sale so reported on that date, on the next preceding date on
         which such sale was so reported, or, at the discretion of the
         Committee, the price prevailing on the exchange at the time of
         exercise, (ii) if shares of Common Stock are not so listed but are
         quoted on the Nasdaq National Market, the average of the highest and
         lowest sales price per share of Common Stock reported by the Nasdaq
         National Market on that date, or, if there shall have been no such sale
         so reported on that date, on the next preceding date on which such a
         sale was so reported, or, at the discretion of the Committee, the price
         prevailing on the Nasdaq National Market at the time of exercise, (iii)
         if the Common Stock is not so listed or quoted, the average of the
         closing bid and asked price on that date, or, if there are no
         quotations available for such date, on the next preceding date on which
         such quotations shall be available, as reported by the Nasdaq Stock
         Market, or, if not reported by the Nasdaq Stock Market, by the National
         Quotation Bureau Incorporated or (iv) if shares of Common Stock are not
         publicly traded, the most recent value determined by an independent
         appraiser appointed by the Company for such purpose; provided that,
         notwithstanding the foregoing, "Fair Market Value" in the case of any
         Award granted in connection with the IPO means the price per share of
         Common Stock set on the IPO Pricing Date, as set forth in the final
         prospectus relating to the IPO.

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                  "GRANT DATE" means the date an Award is granted to a
         Participant pursuant to the Plan.

                  "GRANT PRICE" means the price at which a Participant may
         exercise his or her right to receive cash or Common Stock, as
         applicable, under the terms of an Award.

                  "INCENTIVE STOCK OPTION" means an Option that is intended to
         comply with the requirements set forth in Section 422 of the Code.

                  "INDEPENDENT CONTRACTOR" means a person providing services to
         the Company or any of its Subsidiaries, or who will provide such
         services, except an Employee or Nonemployee Director.

                  "INDEPENDENT CONTRACTOR AWARD" means any Nonqualified Stock
         Option, SAR, Stock Award, Cash Award or Performance Award granted,
         whether singly, in combination or in tandem, to a Participant who is an
         Independent Contractor pursuant to such applicable terms, conditions
         and limitations as the Committee may establish in order to fulfill the
         objectives of the Plan.

                  "INDEPENDENT CONTRACTOR AWARD AGREEMENT" means a written
         agreement setting forth the terms, conditions and limitations
         applicable to an Independent Contractor Award.

                  "IPO" means the first time a registration statement filed
         under the Securities Act of 1933 and respecting an underwritten primary
         offering by the Company of shares of Common Stock is declared effective
         under that Act and the shares registered by that registration statement
         are issued and sold by the Company (otherwise than pursuant to the
         exercise of any overallotment option).

                  "IPO CLOSING DATE" means the date on which the Company first
         receives payment for the shares of Common Stock it sells in the IPO.

                  "IPO PRICING DATE" means the date of the execution and
         delivery of an underwriting or other purchase agreement among the
         Company and the underwriters relating to the IPO setting forth the
         price at which shares of Common Stock will be issued and sold by the
         Company to the underwriters and the terms and conditions thereof.

                  "NONEMPLOYEE DIRECTOR" means an individual serving as a member
         of the Board who is not an employee of Reliant or any of its
         Subsidiaries or the Company or any of its Subsidiaries.

                  "NONQUALIFIED STOCK OPTION" means an Option that is not an
         Incentive Stock Option.

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                  "OPTION" means a right to purchase a specified number of
         shares of Common Stock at a specified Grant Price, which may be an
         Incentive Stock Option or a Nonqualified Stock Option.

                  "PARTICIPANT" means an Employee, Nonemployee Director or
         Independent Contractor to whom an Award has been granted under this
         Plan.

                  "PERFORMANCE AWARD" means an award made pursuant to this Plan
         to a Participant who is an Employee or Independent Contractor that is
         subject to the attainment of one or more Performance Goals.

                  "PERFORMANCE GOAL" means a standard established by the
         Committee, to determine in whole or in part whether a Performance Award
         shall be earned.

                  "RELIANT" means Reliant Energy, Incorporated, a Texas
         corporation.

                  "RESTRICTED STOCK" means Common Stock that is restricted or
         subject to forfeiture provisions.

                  "RESTRICTION PERIOD" means a period of time beginning as of
         the Grant Date of an Award of Restricted Stock and ending as of the
         date upon which the Common Stock subject to such Award is no longer
         restricted or subject to forfeiture provisions.

                  "STOCK APPRECIATION RIGHT" OR "SAR" means a right to receive a
         payment, in cash or Common Stock, equal to the excess of the Fair
         Market Value or other specified valuation of a specified number of
         shares of Common Stock on the date the right is exercised over a
         specified Grant Price, in each case, as determined by the Committee.

                  "STOCK AWARD" means an Award in the form of shares of Common
         Stock or units denominated in shares of Common Stock, including an
         award of Restricted Stock.

                  "SUBSIDIARY" means (i) in the case of a corporation, any
         corporation of which the Company directly or indirectly owns shares
         representing 50% or more of the combined voting power of the shares of
         all classes or series of capital stock of such corporation which have
         the right to vote generally on matters submitted to a vote of the
         stockholders of such corporation and (ii) in the case of a partnership
         or other business entity not organized as a corporation, any such
         business entity of which the Company directly or indirectly owns 50% or
         more of the voting, capital or profits interests (whether in the form
         of partnership interests, membership interests or otherwise).

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         4. ELIGIBILITY.

                  (a) EMPLOYEES. All Employees are eligible for the grant of
         Employee Awards under this Plan.

                  (b) DIRECTORS. Members of the Board eligible for the grant of
         Director Awards under this Plan are those who are Nonemployee
         Directors.

                  (c) INDEPENDENT CONTRACTORS. All Independent Contractors are
         eligible for the grant of Independent Contractor Awards under this
         Plan.

         5. COMMON STOCK AVAILABLE FOR AWARDS. Subject to the provisions of
paragraph 15 hereof, no Award shall be granted if it shall result in the
aggregate number of shares of Common Stock issued under the Plan plus the number
of shares of Common Stock covered by or subject to Awards then outstanding
(after giving effect to the grant of the Award in question) to exceed 16,000,000
shares. No more than 2,000,000 shares of Common Stock shall be available for
Incentive Stock Options. The number of shares of Common Stock that are subject
to Awards under this Plan that are forfeited or terminated, expire unexercised,
are settled in cash in lieu of Common Stock or in a manner such that all or some
of the shares covered by an Award are not issued to a Participant or are
exchanged for Awards that do not involve Common Stock, shall again immediately
become available for Awards hereunder. The Committee may from time to time adopt
and observe such procedures concerning the counting of shares against the Plan
maximum as it may deem appropriate. The Board and the appropriate officers of
the Company shall from time to time take whatever actions are necessary to file
any required documents with governmental authorities, stock exchanges and
transaction reporting systems to ensure that shares of Common Stock are
available for issuance pursuant to Awards.

         6. ADMINISTRATION.

                  (a) This Plan shall be administered by the Committee except as
         otherwise provided herein.

                  (b) Subject to the provisions hereof, insofar as this Plan
         relates to Employee Awards or Independent Contractor Awards, the
         Committee shall have full and exclusive power and authority to
         administer this Plan and to take all actions that are specifically
         contemplated hereby or are necessary or appropriate in connection with
         the administration hereof. The Board (or its delegee) shall administer
         the Plan with respect to Director Awards. Insofar as this Plan relates
         to Employee Awards or Independent Contractor Awards, the Committee
         shall also have full and exclusive power to interpret this Plan and to
         adopt such rules, regulations and guidelines for carrying out this Plan
         as it may deem necessary or proper, all of which powers shall be
         exercised in the best interests of the Company and in keeping with the
         objectives of this Plan. The Committee may, in its discretion, provide
         for the extension of the exercisability of an Employee Award or
         Independent Contractor Award, accelerate the vesting or exercisability
         of an Employee Award or Independent Contractor Award, eliminate or make
         less restrictive any restrictions applicable to an Employee Award or
         Independent

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         Contractor Award, waive any restriction or other provision of this Plan
         (insofar as such provision relates to Employee Awards or to Independent
         Contractor Awards) or an Employee Award or Independent Contractor Award
         or otherwise amend or modify an Employee Award or Independent
         Contractor Award in any manner that is either (i) not adverse to the
         Participant to whom such Employee Award or Independent Contractor Award
         was granted or (ii) consented to by such Participant. The Committee may
         grant an Award to an Employee who it expects to become an employee of
         the Company or any of its Subsidiaries within the following six months,
         with such Award being subject to the individual's actually becoming an
         employee within such time period, and subject to such other terms and
         conditions as may be established by the Committee. The Committee may
         correct any defect or supply any omission or reconcile any
         inconsistency in this Plan or in any Employee Award or Independent
         Contractor Award in the manner and to the extent the Committee deems
         necessary or desirable to further the Plan purposes. Any decision of
         the Committee in the interpretation and administration of this Plan
         shall lie within its sole and absolute discretion and shall be final,
         conclusive and binding on all parties concerned.

                  (c) No member of the Committee or officer of the Company to
         whom the Committee has delegated authority in accordance with the
         provisions of paragraph 7 of this Plan shall be liable for anything
         done or omitted to be done by him or her, by any member of the
         Committee or by any officer of the Company in connection with the
         performance of any duties under this Plan, except for his or her own
         willful misconduct or as expressly provided by statute.

         7. DELEGATION OF AUTHORITY. The Committee may delegate to the Chief
Executive Officer and to other senior officers of the Company its duties under
this Plan pursuant to such conditions or limitations as the Committee may
establish. The Committee may engage or authorize the engagement of a third party
administrator to carry out administrative functions under the Plan.

         8. EMPLOYEE AND INDEPENDENT CONTRACTOR AWARDS.

                  (a) The Committee shall determine the type or types of
         Employee Awards to be made under this Plan and shall designate from
         time to time the Employees who are to be the recipients of such Awards.
         Each Employee Award shall be embodied in an Employee Award Agreement,
         which shall contain such terms, conditions and limitations as shall be
         determined by the Committee in its sole discretion and, if required by
         the Committee, shall be signed by the Participant to whom the Employee
         Award is granted and by an Authorized Officer for and on behalf of the
         Company. Employee Awards may consist of those listed in this paragraph
         8(a) and may be granted singly, in combination or in tandem. Employee
         Awards may also be granted in combination or in tandem with, in
         replacement of, or as alternatives to, grants or rights under this Plan
         or any other employee plan of the Company or any of its Subsidiaries,
         including the plan of any acquired entity. An Employee Award may
         provide for the grant or issuance of additional, replacement or
         alternative Employee Awards upon the

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         occurrence of specified events, including the exercise of the original
         Employee Award granted to a Participant. All or part of an Employee
         Award may be subject to conditions established by the Committee, which
         may include, but are not limited to, continuous service with the
         Company and its Subsidiaries, achievement of specific business
         objectives, increases in specified indices, attainment of specified
         growth rates and other comparable measurements of performance. Upon the
         death, disability or termination of employment by a Participant who is
         an Employee, any unexercised, deferred, unvested or unpaid Employee
         Awards shall be treated as set forth in the applicable Employee Award
         Agreement.

                           (i) OPTION. An Employee Award may be in the form of
                  an Option, which may be an Incentive Stock Option or a
                  Nonqualified Stock Option. The Grant Price of an Option shall
                  be not less than the Fair Market Value of the Common Stock on
                  the Grant Date; provided, however, that the Committee may, in
                  its sole discretion, make grants of Nonqualified Stock Options
                  as Employee Awards with an exercise price per share that is
                  less than the Fair Market Value of the Common Stock on the
                  Grant Date with respect to no more than 1,000,000 shares of
                  Common Stock. Subject to the foregoing provisions, the terms,
                  conditions and limitations applicable to any Options awarded
                  to Employees pursuant to this Plan, including the Grant Price,
                  the term of the Options and the date or dates upon which they
                  become exercisable, shall be determined by the Committee.

                           (ii) STOCK APPRECIATION RIGHTS. An Employee Award may
                  be in the form of an SAR. The terms, conditions and
                  limitations applicable to any SARs awarded to Employees
                  pursuant to this Plan, including the Grant Price, the term of
                  any SARs and the date or dates upon which they become
                  exercisable, shall be determined by the Committee.

                           (iii) STOCK AWARD. An Employee Award may be in the
                  form of a Stock Award. The terms, conditions and limitations
                  applicable to any Stock Awards granted pursuant to this Plan
                  shall be determined by the Committee.

                           (iv) CASH AWARD. An Employee Award may be in the form
                  of a Cash Award. The terms, conditions and limitations
                  applicable to any Cash Awards granted pursuant to this Plan
                  shall be determined by the Committee.

                           (v) PERFORMANCE AWARD. Without limiting the type or
                  number of Employee Awards that may be made under the other
                  provisions of this Plan, an Employee Award may be in the form
                  of a Performance Award. A Performance Award shall be paid,
                  vested

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                  or otherwise deliverable solely on account of the attainment
                  of one or more pre-established, objective Performance Goals
                  established by the Committee prior to the earlier to occur of
                  (x) 90 days after the commencement of the period of service to
                  which the Performance Goal relates or (y) the lapse of 25% of
                  the period of service (as scheduled in good faith at the time
                  the goal is established), and in any event while the outcome
                  is substantially uncertain. A Performance Goal is objective if
                  a third party having knowledge of the relevant facts could
                  determine whether the goal is met. Such a Performance Goal may
                  be based on one or more business criteria that apply to the
                  Employee, one or more business units of the Company, or the
                  Company as a whole, and may include one or more of the
                  following: earnings per share, earnings per share growth,
                  total shareholder return, economic value added, cash return on
                  capitalization, increased revenue, revenue ratios (per
                  employee or per customer), net income, stock price, market
                  share, return on equity, return on assets, return on capital,
                  return on capital compared to cost of capital, return on
                  capital employed, return on invested capital, shareholder
                  value, net cash flow, operating income, earnings before
                  interest and taxes, cash flow, cash from operations, cost
                  reductions, cost ratios (per employee or per customer),
                  proceeds from dispositions, project completion time and budget
                  goals, net cash flow before financing activities, customer
                  growth and total market value. Goals may also be based on
                  performance relative to a peer group of companies. Unless
                  otherwise stated, such a Performance Goal need not be based
                  upon an increase or positive result under a particular
                  business criterion and could include, for example, maintaining
                  the status quo or limiting economic losses (measured, in each
                  case, by reference to specific business criteria). In
                  interpreting Plan provisions applicable to Performance Goals
                  and Performance Awards, it is the intent of the Plan to
                  conform with the standards of Section 162(m) of the Code and
                  Treasury Regulation Section 1.162-27(e)(2)(i), and the
                  Committee in establishing such goals and interpreting the Plan
                  shall be guided by such provisions. Prior to the payment of
                  any compensation based on the achievement of Performance
                  Goals, the Committee must certify in writing that applicable
                  Performance Goals and any of the material terms thereof were,
                  in fact, satisfied. Subject to the foregoing provisions, the
                  terms, conditions and limitations applicable to any
                  Performance Awards made pursuant to this Plan shall be
                  determined by the Committee.

                  (b) Notwithstanding anything to the contrary contained in this
         Plan, the following limitations shall apply to any Employee Awards made
         hereunder:

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                           (i) no Participant may be granted, during any
                  calendar year, Employee Awards consisting of Options or SARs
                  that are exercisable for more than 1,500,000 shares of Common
                  Stock;

                           (ii) no Participant may be granted, during any
                  calendar year, Stock Awards covering or relating to more than
                  500,000 shares of Common Stock (the limitation set forth in
                  this clause (ii), together with the limitation set forth in
                  clause (i) above, being hereinafter collectively referred to
                  as the "Stock-Based Awards Limitations"); and

                           (iii) no Participant may be granted Employee Awards
                  consisting of cash or in any other form permitted under this
                  Plan (other than Employee Awards consisting of Options or SARs
                  or Stock Awards) in respect of any calendar year having a
                  value determined on the Grant Date in excess of $3,500,000.

                  (c) The Committee shall have the sole responsibility and
         authority to determine the type or types of Independent Contractor
         Awards to be made under this Plan and the terms, conditions and
         limitations applicable to such Awards, except that Independent
         Contractor Awards may not be in the form of Incentive Stock Options.

         9. DIRECTOR AWARDS. Each Nonemployee Director of the Company shall be
granted Director Awards in accordance with this paragraph 9 and subject to the
applicable terms, conditions and limitations set forth in this Plan and the
applicable Director Award Agreements. Notwithstanding anything to the contrary
contained herein, Director Awards shall not be granted in any year in which a
sufficient number of shares of Common Stock are not available to make all such
scheduled Awards under this Plan.

                  (a) ANNUAL DIRECTOR AWARDS. On each Annual Director Award
         Date, each Nonemployee Director other than the Chairman shall
         automatically be granted a Director Award covering 1,000 shares of
         Common Stock. Such Award shall be nonforfeitable.

                  (b) DIRECTOR OPTIONS. A Director Award shall be in the form of
         a Nonqualified Stock Option. The Grant Price of a Director Option shall
         be equal to the Fair Market Value of the Common Stock on the Grant
         Date. Subject to the foregoing provisions, the terms, conditions and
         limitations applicable to Director Options, including the term of the
         Options and the date or dates upon which they become exercisable, shall
         be determined by the Board. The Board will not permit the repricing of
         Options by any method, including by cancellation and reissuance, and
         will not grant Options to Directors at a price less than Fair Market
         Value on the Grant Date.

                  (c) DIRECTOR AWARD AGREEMENTS. Any Award of Director Awards
         shall be embodied in a Director Award Agreement, which shall contain
         the terms,

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         conditions and limitations set forth above and shall be signed by an
         Authorized Officer for and on behalf of the Company.

         10. PAYMENT OF AWARDS.

                  (a) GENERAL. Payment made to a Participant pursuant to an
         Award may be made in the form of cash or Common Stock, or a combination
         thereof, and may include such restrictions as the Committee shall
         determine, including, in the case of Common Stock, restrictions on
         transfer and forfeiture provisions. If such payment is made in the form
         of Restricted Stock, the applicable Award Agreement relating to such
         shares shall specify whether they are to be issued at the beginning or
         end of the Restriction Period. In the event that shares of Restricted
         Stock are to be issued at the beginning of the Restriction Period, the
         certificates evidencing such shares (to the extent that such shares are
         so evidenced) shall contain appropriate legends and restrictions that
         describe the terms and conditions of the restrictions applicable
         thereto. In the event that shares of Restricted Stock are to be issued
         at the end of the Restricted Period, the right to receive such shares
         shall be evidenced by book entry registration or in such other manner
         as the Committee may determine.

                  (b) DEFERRAL. With the approval of the Committee, amounts
         payable in respect of Awards may be deferred and paid either in the
         form of installments or as a lump-sum payment. The Committee may permit
         selected Participants to elect to defer payments of some or all types
         of Awards or any other compensation otherwise payable by the Company in
         accordance with procedures established by the Committee. Any deferred
         payment pursuant to an Award, whether elected by the Participant or
         specified by the Award Agreement or by the Committee, may be forfeited
         if and to the extent that the Award Agreement so provides.

                  (c) DIVIDENDS, EARNINGS AND INTEREST. Rights to dividends or
         Dividend Equivalents may be extended to and made part of any Stock
         Award, subject to such terms, conditions and restrictions as the
         Committee may establish. The Committee may also establish rules and
         procedures for the crediting of interest or other earnings on deferred
         cash payments and Dividend Equivalents for Stock Awards.

                  (d) SUBSTITUTION OF AWARDS. Subject to the limitations set
         forth in Section 8(a)(i) and 8(b), at the discretion of the Committee,
         a Participant who is an Employee or Independent Contractor may be
         offered an election to substitute an Employee Award or Independent
         Contractor Award for another Employee Award or Independent Contractor
         Award or Employee Awards or Independent Contractor Awards of the same
         or different type.

                  (e) CASH-OUT OF AWARDS. At the discretion of the Committee, an
         Award that is an Option or SAR may be settled by a cash payment equal
         to the difference between the Fair Market Value per share of Common
         Stock on the date

                                      -13-
<PAGE>

         of exercise and the Grant Price of the Award, multiplied by the number
         of shares with respect to which the Award is exercised.

         11. OPTION EXERCISE. The Grant Price shall be paid in full at the time
of exercise in cash or, if permitted by the Committee and elected by the
optionee, the optionee may purchase such shares by means of tendering Common
Stock or surrendering another Award, including Restricted Stock, valued at Fair
Market Value on the date of exercise, or any combination thereof. The Committee
shall determine acceptable methods for Participants to tender Common Stock or
other Awards. The Committee may provide for procedures to permit the exercise or
purchase of such Awards by use of the proceeds to be received from the sale of
Common Stock issuable pursuant to an Award. Unless otherwise provided in the
applicable Award Agreement, in the event shares of Restricted Stock are tendered
as consideration for the exercise of an Option, a number of the shares issued
upon the exercise of the Option, equal to the number of shares of Restricted
Stock used as consideration therefor, shall be subject to the same restrictions
as the Restricted Stock so submitted as well as any additional restrictions that
may be imposed by the Committee. The Committee may adopt additional rules and
procedures regarding the exercise of Options from time to time, provided that
such rules and procedures are not inconsistent with the provisions of this
paragraph.

         12. TAXES. The Company or its designated third party administrator
shall have the right to deduct applicable taxes from any Employee Award payment
and withhold, at the time of delivery or vesting of cash or shares of Common
Stock under this Plan, an appropriate amount of cash or number of shares of
Common Stock or a combination thereof for payment of taxes or other amounts
required by law or to take such other action as may be necessary in the opinion
of the Company to satisfy all obligations for withholding of such taxes,
provided that withholding obligations with respect to Options may only be
satisfied in cash as long as withholding of stock following the exercise of an
Option would result in a charge to earnings. The Committee may also permit
withholding to be satisfied by the transfer to the Company of shares of Common
Stock theretofore owned by the holder of the Employee Award with respect to
which withholding is required, except with respect to Options. If shares of
Common Stock are used to satisfy tax withholding, such shares shall be valued
based on the Fair Market Value when the tax withholding is required to be made.

         13. AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION OF THE PLAN. The
Board may amend, modify, suspend or terminate this Plan for the purpose of
meeting or addressing any changes in legal requirements or for any other purpose
permitted by law, except that (i) no amendment or alteration that would
adversely affect the rights of any Participant under any Award previously
granted to such Participant shall be made without the consent of such
Participant and (ii) no amendment or alteration shall be effective prior to its
approval by the stockholders of the Company to the extent such approval is
required by applicable legal requirements.

         14. ASSIGNABILITY. Unless otherwise determined by the Committee and
provided in the Award Agreement, no Award or any other benefit under this Plan
shall be assignable or otherwise transferable except by will or the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security Act,
or the rules thereunder. The Committee may prescribe and include in

                                      -14-
<PAGE>

applicable Award Agreements other restrictions on transfer. Any attempted
assignment of an Award or any other benefit under this Plan in violation of this
paragraph 14 shall be null and void.

                  Subject to approval by the Committee in its sole discretion,
all or a portion of the Awards granted to a Participant under the Plan may be
transferable by the Participant, to the extent and only to the extent specified
in such approval, to (i) the spouse, parent, brother, sister, children or
grandchildren (including adopted and stepchildren and grandchildren) of the
Participant ("Immediate Family Members"), (ii) a trust or trusts for the
exclusive benefit of such Immediate Family Members ("Immediate Family Member
Trusts"), or (iii) a partnership or partnerships in which such Immediate Family
Members have at least 99% of the equity, profit and loss interests ("Immediate
Family Member Partnerships"); provided that the Award Agreement pursuant to
which such Awards are granted (or an amendment thereto) must expressly provide
for transferability in a manner consistent with this paragraph. Subsequent
transfers of transferred Awards shall be prohibited except by will or the laws
of descent and distribution, unless such transfers are made to the original
Participant or a person to whom the original Participant could have made a
transfer in the manner described herein. No transfer shall be effective unless
and until written notice of such transfer is provided to and approved by the
Committee, in the form and manner prescribed by the Committee. Following
transfer, any such Awards shall continue to be subject to the same terms and
conditions as were applicable immediately prior to transfer, and, except as
otherwise provided herein, the term "Participant" shall be deemed to refer to
the transferee. The consequences of termination of employment or service shall
continue to be applied with respect to the original Participant, following which
the Awards shall be exercisable by the transferee only to the extent and for the
periods specified in this Plan and the Award Agreement.

         15. ADJUSTMENTS.

                  (a) The existence of outstanding Awards shall not affect in
         any manner the right or power of the Company or its stockholders to
         make or authorize any or all adjustments, recapitalizations,
         reorganizations or other changes in the capital stock of the Company or
         its business or any merger or consolidation of the Company, or any
         issue of bonds, debentures, preferred or prior preference stock
         (whether or not such issue is prior to, on a parity with or junior to
         the Common Stock) or the dissolution or liquidation of the Company, or
         any sale or transfer of all or any part of its assets or business, or
         any other corporate act or proceeding of any kind, whether or not of a
         character similar to that of the acts or proceedings enumerated above.

                  (b) In the event of any subdivision or consolidation of
         outstanding shares of Common Stock, declaration of a dividend payable
         in shares of Common Stock or other stock split, then (i) the number of
         shares of Common Stock reserved under this Plan, (ii) the number of
         shares of Common Stock covered by outstanding Awards, (iii) the Grant
         Price or other price in respect of such Awards, (iv) the appropriate
         Fair Market Value and other price determinations for such Awards, and
         (v) the Stock-Based Awards Limitations shall each be proportionately
         adjusted by the Board as appropriate to reflect such transaction.

                                      -15-
<PAGE>

         In the event of any other recapitalization or capital reorganization of
         the Company, any consolidation or merger of the Company with another
         corporation or entity, the adoption by the Company of any plan of
         exchange affecting the Common Stock or any distribution to holders of
         Common Stock of securities or property (other than normal cash
         dividends or dividends payable in Common Stock), the Board shall make
         appropriate adjustments to (i) the number of shares of Common Stock
         covered by Awards, (ii) the Grant Price or other price in respect of
         such Awards, (iii) the appropriate Fair Market Value and other price
         determinations for such Awards, and (iv) the Stock-Based Awards
         Limitations to reflect such transaction; provided that such adjustments
         shall only be such as are necessary to maintain the proportionate
         interest of the holders of the Awards and preserve, without increasing,
         the value of such Awards. In the event of a corporate merger,
         consolidation, acquisition of property or stock, separation,
         reorganization or liquidation, the Board shall be authorized (x) to
         issue or assume Awards by means of substitution of new Awards, as
         appropriate, for previously issued Awards or to assume previously
         issued Awards as part of such adjustment or (y) to cancel Awards that
         are Options or SARs and give the Participants who are the holders of
         such Awards notice and opportunity to exercise for 30 days prior to
         such cancellation.

         16. RESTRICTIONS. No Common Stock or other form of payment shall be
issued with respect to any Award unless the Company shall be satisfied based on
the advice of its counsel that such issuance will be in compliance with
applicable federal and state securities laws. Certificates evidencing shares of
Common Stock delivered under this Plan (to the extent that such shares are so
evidenced) may be subject to such stop transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any securities exchange
or transaction reporting system upon which the Common Stock is then listed or to
which it is admitted for quotation and any applicable federal or state
securities law. The Committee may cause a legend or legends to be placed upon
such certificates (if any) to make appropriate reference to such restrictions.

         17. UNFUNDED PLAN. This Plan shall be unfunded. Although bookkeeping
accounts may be established with respect to Participants under this Plan, any
such accounts shall be used merely as a bookkeeping convenience. The Company
shall not be required to segregate any assets for purposes of this Plan or
Awards hereunder, nor shall the Company, the Board or the Committee be deemed to
be a trustee of any benefit to be granted under this Plan. Any liability or
obligation of the Company to any Participant with respect to an Award under this
Plan shall be based solely upon any contractual obligations that may be created
by this Plan and any Award Agreement, and no such liability or obligation of the
Company shall be deemed to be secured by any pledge or other encumbrance on any
property of the Company. Neither the Company nor the Board nor the Committee
shall be required to give any security or bond for the performance of any
obligation that may be created by this Plan.

         18. AWARDS TO FOREIGN NATIONALS AND EMPLOYEES OUTSIDE THE UNITED
STATES. To the extent the Committee deems it necessary, appropriate or desirable
to comply with foreign law or practice and to further the purpose of the Plan,
the Committee may, without amending the Plan, (i) establish special rules
applicable to Awards granted to Participants who

                                      -16-
<PAGE>

are foreign nationals, are employed outside the United States, or both,
including rules that differ from those set forth in this Plan, and (ii) grant
Awards to such Participants in accordance with those rules.

         19. GOVERNING LAW. This Plan and all determinations made and actions
taken pursuant hereto, to the extent not otherwise governed by mandatory
provisions of the Code or the securities laws of the United States, shall be
governed by and construed in accordance with the laws of the State of Texas.

         20. EFFECTIVENESS. The Plan, as approved by the Board, shall be
effective as set forth herein as of January 1, 2001, but all Awards granted
hereunder prior to or effective as of the IPO Closing Date shall be null and
void and canceled without consideration if the IPO Closing Date does not occur
on or before 10 business days after the IPO Pricing Date. This Plan was approved
by the stockholder of the Company on April 30, 2001.

                                      -17-
<PAGE>

                  IN WITNESS WHEREOF, the Company has executed this Plan this
3rd day of May, 2001, but effective as of January 1, 2001.

                                         RELIANT RESOURCES, INC.

                                         By /s/ R. S. LETBETTER
                                           ------------------------------------
                                           R. S. Letbetter
                                           Chairman and Chief Executive Officer

ATTEST:

/s/ Lynne Harkel-Rumford
------------------------------------

                                      -18-<PAGE>
                                                                   EXHIBIT 10.32
                                                                  EXECUTION COPY

                       STRANDED COST SETTLEMENT AGREEMENT
                               (THE "AGREEMENT")

BY AND BETWEEN:

1.   Municipality of Amsterdam;
2.   Province of Noord-Holland;
3.   Province of Utrecht;
4.   Municipality of Utrecht;
5.   N.V. Provinciaal en Gemeentelijk Utrechts Stroomleveringsbedrijf;
(parties under 1 through 5, collectively, the "Former Shareholders" or "FS");
6.   Reliant Energy Power Generation Inc.;
7.   Reliant Energy Wholesale Holdings (Europe) Inc.;
8.   Reliant Energy Power Generation Benelux N.V. (formerly known as NV
     Energieproduktiebedrijf UNA (the "Company");
(parties under 6 and 7, collectively ("RR") and the parties under 1 through 8,
collectively, the "Parties"),

WHEREAS:

(a)      The Parties entered into a Share Purchase Agreement (the "SPA") and a
         Partnership Agreement dated 29 March 1999 (the "PARTNERSHIP
         AGREEMENT"), as amended and supplemented by the Deed of Amendment dated
         2 September 1999 (the "DEED OF AMENDMENT") and the Supplemental
         Agreement dated 6 October 1999 (the "SUPPLEMENTAL AGREEMENT") (such
         agreements, as amended and supplemented, are referred to below as the
         "PARTNERSHIP DOCUMENTATION") in respect of the sale and transfer of
         100% of the issued and outstanding shares in the Company to Reliant
         Energy Wholesale Holdings (Europe) Inc.

(b)      Under the Partnership Documentation, the FS (i) have indemnified the
         Company for any Stranded Costs up to a maximum amount of NLG
         1,400,000,000, which can be increased by as much as NLG 500,000,000
         under Article 13.7 (b) and (c) of the SPA, as amended by Article 4.10
         of the Deed of Amendment and Article 9.1 of the Supplemental Agreement,
         and (ii) are entitled to receive from the Company any excess of any
         dividends of any other distributions by B.V. Nederlands Elektriciteit
         Administratiekantoor (formerly N.V. Samenwerkende
         Elektriciteits-produktiebedrijven) over NLG 125,000,000 in accordance
         with Article 7 of the Supplemental Agreement (the "NEA DISTRIBUTIONS").

(c)      The Parties have engaged in settlement negotiations and the FS and the
         Company have been extensively advised by their advisors as to various
         outcomes relating to the expected magnitude of and the allocation of
         liabilities under the Partnership Documentation for Stranded Costs.

(d)      The Company has submitted a number of Standard Cost Claim Notices to
         the FS and the FS have contested and challenged each of the Stranded
         Cost Claim Notices in their entirety, subsequent to which the Company
         issued a Notice of Arbitration in accordance with the relevant
         provisions of the Partnership Documentation.

(e)      A number of uncertainties relating to the Stranded Cost items have
         been clarified, including the amount of proceeds resulting from the
         sale of Tennet, Transmission System Operator B.V., whilst in respect
         of others the rules and regulations governing such Stranded Costs have
         to some extent been clarified or confirmed, thus enabling the Parties
         to better assess the mutual risks and liabilities in respect of the
         Stranded Costs.

(f)      The Company has commenced separate arbitration proceedings against N.V.
         Nuon Infra West formerly Energie Noord West N.V. (the "NUON REB
         ARBITRATION"), Remu Infra

                                       1
<PAGE>
                                                                  EXECUTION COPY

     N.V. (the "REMU REB ARBITRATION") and the Municipality of Purmerend (the
     "PURMEREND REB ARBITRATION") (collectively, the "REB ARBITRATIONS"), and
     the other generators, Electrabel Nederland N.V., N.V. Elektriciteits
     Produktiemaatschappij Zuid-Nederland EPZ and E.ON Benelux Generation N.V.
     (collectively, the "OTHER GENERATORS") have commenced or are considering
     commencement of arbitration or have finalised arbitration (the "OTHER REB
     ARBITRATIONS") in order to retrieve certain amounts related to "REB" (the
     "REB Voordeel" or "REB ADVANTAGE" as referred to in the Ministerial Note
     (Memorie van Toelichting) to the Transitional Act to the Electricity Act
     1998 (Overgangswet elektriciteitsproductiesector), Section 4.3, page 8).

(g)  The Parties acknowledge that the State of the Netherlands (the Dutch
     Government) is in the process of preparing draft legislation for
     submission to Parliament on compensation to be paid to the Company and
     Other Generators in respect of the stranded costs for district heating
     projects. The Parties also acknowledge that rules on compensation to be
     paid to the Company in respect of the stranded costs for district heating
     projects may be implemented by decree ("wet", "koninklijk besluit",
     "ministeriele regeling" or "algemene maatregel van bestuur", together a
     "DECREE"), with its associated "memorie van toelichting" or "nota van
     toelichting" (the "COMPENSATION RULES"). The Parties further acknowledge
     that it cannot be entirely excluded that the State of the Netherlands may
     resolve that it will provide no compensation in respect of the stranded
     costs for district heating projects.

(h)  The Parties with their respective advisors have again assessed the mutual
     risks and liabilities in respect of the Stranded Costs and wish to settle
     any and all of their liabilities under the Partnership Documentation,
     provided that since, as of the date hereof, the Compensation Rules have not
     come into effect and the Company has not received payment of this
     compensation, the Parties have agreed on a special arrangement for the
     settlement of the liabilities in regard of the Stranded Costs for district
     heating projects.

(i)  In order to effectuate the transaction contemplated in this Agreement, the
     Company will, in addition to the Escrow Account set up pursuant to the SPA
     (the "First Escrow Account"), create a second escrow account with the
     Escrow Agent which shall be governed by the rules set forth in Article 9
     (the "SECOND ESCROW ACCOUNT").

AGREE AS FOLLOWS:

ARTICLE 1     SETTLEMENT AMOUNT

The FS will pay to the Company NLG 435,608,821 plus interest at the rate which
applies under the Escrow Agreement dated 7 October 1999 from 12 November 2001
until the date of payment (the "Settlement Amount"). Payment will be made
within 20 days after this Agreement takes effect in accordance with Article 11.
Payment will be made by instructing the Escrow Agent to release the Settlement
Amount from the First Escrow Account into the Second Escrow Account. All rights
of the Company and RR in respect of all Stranded Costs and any and all other
liability of the FS under the Partnership Documentation will be automatically
waived and relinquished, without any action by any of the Parties being
required, upon receipt by the Company of payment of the Settlement Amount and
the Stranded Cost Claim Notices for electricity import contracts submitted by
the Company on 29 June 2001 and 10 August 2001, as amended by letter of 24
August 2001, and cancellation of paragraphs 3 and 4 of Article 5 of the
Purchase Price Determination Agreement of 27 January 2000, provided that the
liability of the FS under this Agreement will remain in full effect.

                                       2
<PAGE>

ARTICLE 2 NEA DISTRIBUTIONS

All of the rights of the FS in respect of the NEA Distributions, which have
already been paid or will be paid, will be automatically waived and
relinquished, without any action by any of the Parties being required, when this
Agreement becomes effective.

ARTICLE 3 ELECTION

1.       The Company shall elect (an "ELECTION") by written notice to the FS (an
         "ELECTION NOTICE") to apply Article 4 or Article 5 based on its
         determination, in its discretion, whether the compensation calculated
         under the Compensation Rules, if any, is at least the same as the
         compensation calculated under the formulas attached as Annex E to the
         Supplemental Agreement (the "ANNEX E FORMULAS"), attached as Exhibit A,
         and using the assumptions in the spreadsheets attached as Exhibit B
         (the "ANNEX E SPREADSHEET"), as clarified in the comparison attached as
         Exhibit C (the "ANNEX E COMPARISON"), and the draft Compensation Rules
         attached as Exhibit D (Exhibits A, B, C, and D together the "ANNEX E
         CALCULATION"). The Company shall make the Election within 21 days of
         the date on which the Compensation Rules take effect (the "EFFECTIVE
         DATE"), or promptly after the date of a decision by the State of the
         Netherlands by statute, Decree or otherwise in a manner that is
         certain, that the State of the Netherlands will provide no compensation
         for stranded costs for district heating projects.

2.       If no Compensation Rules have taken effect on 31 December 2003, the
         Company is entitled but not obligated to elect to apply Article 5, but
         is also entitled to wait to make an Election until the second sentence
         under 1 applies.

3.       If the Company elects to apply Article 4 or fails to make an Election
         under 1 within 21 days of the Effective Date, then Article 4 will be
         applied.

4.       If the Company elects to apply Article 5, then Article 5 will be
         applied unless within 21 days of the Election Notice the FS submit a
         request (a "REQUEST FOR DETERMINATION") to the Expert under Article 6
         to determine whether the compensation calculated under the Compensation
         Rules is at least the same as the compensation calculated under the
         Annex E Formulas, using the same assumptions as in the Annex E
         Spreadsheet as clarified in the Annex E Comparison (this determination,
         or a statement by the Expert that he cannot make a determination, or a
         failure by the Expert to make a determination within ten weeks from the
         Request for Determination, a "DETERMINATION").

5.       If the Expert determines that the compensation calculated under the
         Compensation Rules is at least the same as the compensation calculated
         under the Annex E Formulas, using the same assumptions as in the Annex
         E Spreadsheet as clarified in the Annex E Comparison, then Article 4
         will be applied.

6.       If the Expert determines that the compensation calculated under the
         Compensation Rules is not at least the same as the compensation
         calculated under the Annex E Formulas, using the same assumptions as in
         the Annex E Spreadsheet as clarified in the Annex E Comparison, then
         Article 5 will be applied, unless the Company within six months after
         the Determination elects to apply Article 4, in which case Article 4
         will be applied.

7.       If the Expert does not make a Determination within ten weeks after the
         Request for Determination, or states that he cannot make a
         Determination, then Article 5 will be applied, unless the Company
         within six months after the Determination elects to apply Article 4, in
         which case Article 4 will be applied.

8.       The Company cannot elect to apply Article 4 after it has submitted an
         Additional Settlement Claim under Article 5.

                                       3
<PAGE>
                                                                  EXECUTION COPY

ARTICLE 4 ADDITIONAL SETTLEMENT OPTION 1

Under application of this Article, the FS will pay to the Company an amount of
NLG 60,000,000 (the "DISTRICT HEATING SETTLEMENT AMOUNT"). The FS shall pay the
Company an additional amount of NLG 15,000,000 (the "ADDITIONAL DISTRICT HEATING
SETTLEMENT AMOUNT"), unless the State of the Netherlands expressly provides by
Decree implementing the Compensation Rules for Compensation in respect of
stranded costs for district heating projects for the lifetime of the district
heating projects, subject to notification to the European Commission. Payment
will be made within 20 days after the date of an Election Notice that the
Company elects to apply Article 4, or the date of a Determination that the
compensation calculated under the Compensation Rules is at least the same as the
compensation calculated under the Annex E Formulas, using the same assumptions
as in the Annex E Spreadsheet as clarified in the Annex E Comparison. Payment
will be made by instructing the Escrow Agent to release the District Heating
Settlement Amount and the Additional District Heating Settlement Amount from the
First Escrow Account into the Second Escrow Account. All rights of the Company
and RR in respect of the Additional Settlement Amounts and the Further
Settlement Amount under this Agreement will be automatically waived and
relinquished, without any action by any of the Parties being required, upon
receipt by the Company of the District Heating Settlement Amount and the
Additional District Heating Settlement Amount. Subsequent retraction of or
changes to the Compensation Rules will not affect such waiver or relinquishment.

ARTICLE 5 ADDITIONAL SETTLEMENT OPTION 2

1.       Under application of this Article and subject to its provisions, the FS
         will pay the Company Additional Settlement Amounts equal to the sum of:

         (a)      NLG 280,000,000 minus the net present value of the
                  compensation the Company is entitled to receive from the State
                  of the Netherlands in respect of Stranded Costs for district
                  heating projects with regard to the period as from 1 January
                  2001, in accordance with the Compensation Rules, excluding any
                  Compensation the Company is entitled to receive from the State
                  of the Netherlands for any REB Advantage which the Company
                  does not retrieve through the REB Arbitrations (the "FUEL
                  PRICE RISK SETTLEMENT").

         (b)      NLG 100,000,000 minus the sum of (i) the net present value of
                  the REB Advantage with regard to the period as from 1 January
                  2001, which the Company is entitled to receive under the
                  arbitral award in the Purmerend REB Arbitration and (ii) the
                  net present value of the compensation the Company is entitled
                  to receive from the State of the Netherlands, in accordance
                  with the Compensation Rules, for any REB Advantage with regard
                  to the period as from 1 January 2001, which the Company is not
                  entitled to retrieve through the Purmerend REB Arbitration
                  (the "PURMEREND SHORTFALL COMPENSATION").

         (c)      NLG 10,000,000 minus the sum of (i) the net present value of
                  the REB Advantage with regard to the period as from 1 January
                  2001, which the Company is entitled to receive under the
                  arbitral award in the NUON REB Arbitration and (ii) the net
                  present value of the compensation the Company is entitled to
                  receive from the State of the Netherlands, in accordance with
                  the Compensation Rules, for any REB Advantage with regard to
                  the period as from 1 January 2001, which the Company is not
                  entitled to retrieve through the NUON REB Arbitration (the
                  "NUON Shortfall Compensation").

         (d)      NLG 250,000,000 minus the sum of (i) the net present value of
                  the REB Advantage with regard to the period as from 1 January
                  2001, which the Company is entitled to receive under the
                  arbitral award in the Remu REB Arbitration and (ii) the net
                  present value of the compensation the Company is entitled to
                  receive from the State of the Netherlands, in accordance with
                  the

                                       4
<PAGE>
                                                                  EXECUTION COPY

         Compensation Rules, for any REB Advantage with regard to the period as
         from 1 January 2001, which the Company is not entitled to retrieve
         through the Remu REB Arbitration (the "REMU SHORTFALL COMPENSATION").

    Each of the amounts under (a) through (d) is an "ADDITIONAL SETTLEMENT
    AMOUNT" and together these amounts are the "ADDITIONAL SETTLEMENT AMOUNTS".

2.  The net present value of the REB Advantage under 1 (b)(i), (c)(i) and
    (d)(i) will be calculated in accordance with the Annex E Spreadsheet
    attached as Exhibit B by multiplying the estimated REB per GJ as from 1
    January 2001 by the total expected GJ heat produced per annum for each of
    the Company's district heating contracts over the life of each contract as
    from 1 January 2001, and by discounting the result by 6% per annum. The
    estimated REB per GJ as from 1 January 2001 will be based on the amount of
    the REB Advantage awarded to the Company for 2001 in REB Arbitrations and
    the estimated percentage of GJ heat delivered subject to REB, to be adjusted
    for expected REB rate increases in 2002 and beyond, in accordance with
    Exhibit B.

    The net present value of any compensation by the State of the Netherlands
    under 1 (b)(ii), (c)(ii) and (d)(ii) will be calculated in the way
    indicated by the State of the Netherlands, or failing such an indication, in
    the same way as the net present value of the REB Advantage as described in
    the previous two sentences.

    The net present value of any compensation by the State of the Netherlands
    under 1 (a) will be calculated, including any explicit compensation for
    non-commodity costs whether through a surcharge on the Pg, u, d, p or in any
    other manner, in the way indicated by the State of the Netherlands, or
    failing such an indication, using the same methodology and assumptions with
    respect to discount rates, GJ heat produced per contract per annum for the
    duration of the project, inflation, and other variables in accordance with
    Exhibit B.

    Any maximum amount to be imposed by the State of the Netherlands by Decree
    will affect the net present values of the compensation amounts under 1 (a),
    (b)(ii), (c)(ii) and (d)(ii), but only to the extent that the part of the
    maximum amount applicable to the Company is equal to or less than the amount
    of the Fuel Price Risk Settlement, the Purmerend Shortfall Compensation, the
    NUON Shortfall Compensation or the Remu Shortfall Compensation.

    If the Company submits an Additional Settlement Claim in accordance with
    this Article 5, and no Compensation Rules have taken effect on the date of
    the Additional Settlement Claim, then the net present value of the
    respective compensation amounts under 1 (a), (b)(ii), (c)(ii) and (d)(ii)
    will be deemed to be zero.

3.  The parties will not consider the following in carrying out the calculations
    under 1 (a) through (d): (i) any imposition by the State of the Netherlands
    of a time limit of 31 December 2010, or later, on the period for which
    compensation will be provided under the Compensation Rules, or (ii) any
    introduction of, changes in, or withdrawal of, the Compensation Rules, if
    any, after all of the Additional Settlement Claims have been submitted under
    1 (a) through (d).

4.  The Company will submit any claim in respect of any Additional Settlement
    Amount (an "ADDITIONAL SETTLEMENT CLAIM") in writing to the FS with a
    calculation (the "CALCULATION") of the Additional Settlement Amount in
    accordance with this Agreement.

    The Company will under 1 (a) submit its Additional Settlement Claim and
    Calculation, or, if the Calculation resulted in an amount less than zero,
    its Calculation within six

                                       5
<PAGE>
         months after its Election to apply Article 5, or, if the FS make a
         Request for Determination, within 90 days after the Determination.

         The Company will under 1 (b) through (d) submit its Additional
         Settlement Claim and Calculation or, if the Calculation resulted in an
         amount less than zero, its Calculation within 90 days of the award
         issued in the respective REB Arbitration after the Company has made an
         Election, or otherwise within six months of its Election to apply
         Article 5, or, if the FS make a Request for Determination, within 90
         days after the Determination.

         The FS may notify the Company within 20 days of receipt of an
         Additional Settlement Claim or Calculation in writing that they dispute
         an Additional Settlement Claim or Calculation. If the FS do not notify
         the Company within 20 days of receipt that they dispute and Additional
         Settlement Claim, the FS shall pay the Additional Settlement Amount
         promptly, but not later than 20 days after receipt of the Additional
         Settlement Claim. However, in the event that the FS dispute part of an
         Additional Settlement Claim, the FS will in accordance with the
         previous sentence pay the undisputed amount of the Additional
         Settlement Claim. If the FS notify the Company in writing that they
         dispute an Additional Settlement Claim or a Calculation, the Parties
         will promptly enter into negotiations to reach an amicable resolution
         of the disputed amount or Calculation. If no resolution is achieved
         within 30 days of the FS's notice of the dispute, each Party shall be
         entitled to initiate arbitration in accordance with Article 13 of this
         Agreement.

5.       The Additional Settlement Amounts shall never exceed NLG 700,000,000.

6.       If the Additional Settlement Amounts are equal to or less than NLG
         10,000,000, the Company will not be entitled to payment of the
         Additional Settlement Amounts. If, however, any Additional Settlement
         Amount or the Additional Settlement Amounts are more that NLG
         10,000,000, the Company will be entitled to full payment of the entire
         amount of the Additional Settlement Amount or Additional Settlement
         Amounts.

7.       The Additional Settlement Amounts under 1 (a), (b), (c) and (d) will be
         increased by 6% per annum from 1 January 2001 until the earlier of the
         date of payment or until a maximum of NLG 700,000,000 has been reached.
         Interest will accrue at the rate which applies under the Escrow
         Agreement dated 7 October 1999 on any Additional Settlement Claim that
         is submitted by the Company from the date of the Additional Settlement
         Claim to the date of payment. If, however, the FS dispute an Additional
         Settlement Claim under paragraph 4, any unpaid part of that Additional
         Settlement Claim will be increased only by statutory interest from the
         date of the respective Additional Settlement Claim until the date of
         payment.

8.       If any Calculation under 1 (a) through (d) is lower than zero, the
         difference between that amount and zero (the "NEGATIVE AMOUNT") will be
         set off against any Additional Settlement Amount subsequently
         calculated under 1 (a) through (d). A Negative Amount under 1 (b)
         through (d) will be increased by 6% per annum from 1 January 2001 to
         the date of set-off, but a Negative Amount under 1 (a) will not be
         increased. If the last calculation under 1 (a) through (d) and any
         set-off under the previous sentence result in an amount less than zero,
         the Company will promptly pay the difference between this amount and
         zero to the FS.

9.       The Company will not submit any Additional Settlement Claim under 1 (a)
         before the earliest of three dates: (i) the Effective Date, or (ii) the
         date of a decision by the State of the Netherlands by statute, Decree
         or otherwise in a manner that is certain, that the State of the
         Netherlands will provide no compensation for Standard Costs for
         district heating projects, or (iii) if no Compensation Rules are in
         effect on 31 December 2003, before 1 January 2004. The Company will not
         submit any Additional Settlement Claims under 1 (b) through (d) before
         the respective arbitral award in the respective REB Arbitration.

                                       6

<PAGE>

         The possibility of challenging an arbitral award will not stay the
         effectuation of any of the provisions in this Agreement. However, if an
         arbitral award is subsequently replaced by a final judgement on the
         merits, then the Parties agree to give effect to that judgement. This
         paragraph 9 does not affect the Company's entitlement to payment of
         Additional Settlement Claims and only concerns the timing of submission
         of Additional Settlement Claims.

10.      Any Additional Settlement Amount shall be paid by the FS to the Company
         (i) first, by instructing the Escrow Agent to release from the First
         Escrow Account and transfer into the Second Escrow Account the
         Additional Settlement Amount, and (ii) second, if the Escrow Amount in
         the First Escrow Account is not sufficient to pay the Additional
         Settlement Amount, by payment in cash into the Second Escrow Account of
         any balance of any Additional Settlement Amount remaining unpaid after
         the payment under (i).

11.      The Company hereby assigns ("cedeert") to the FS any and all of its
         rights to, and interest on, any compensation that the Company is
         entitled to receive from the State of the Netherlands in respect of
         stranded costs for district heating projects under any rule or
         regulation that takes effect after (i) 31 December 2003 and an Election
         for Article 5 or (ii) the date of a decision by the State of the
         Netherlands by statute, Decree or otherwise in a manner that is
         certain, that the State of the Netherlands will provide no compensation
         for stranded costs for district heating projects. This assignment
         ("cessie") will only take effect if the net present values of the
         compensation amounts under 1 (a), (b) (ii), (c) (ii) and (d)(ii) are
         deemed to be zero in accordance with the final sentence under 2, and if
         the FS have paid all Additional Settlement Amounts in full. The FS have
         the right to inform the State of the Netherlands of this assignment
         ("cessie"). If the net present values of the compensation amounts under
         1(a),(b)(ii), (c)(ii) and (d)(ii) are deemed to be zero in accordance
         with the final sentence under 2, the FS have paid to the Company the
         resulting Additional Settlement Amounts, and an assignment ("cessie")
         of the rights of the Company and RR under the Compensation Rules is
         excluded by Decree or otherwise, or such an assignment is ineffective
         for any other reason, then the Company will promptly pay to the FS any
         amounts that it receives from the State of the Netherlands in
         compensation for the compensation amounts under 1(a), (b)(ii), (c)(ii),
         and (d)(ii).

12.      The following will apply if (i) the State of the Netherlands imposes by
         Decree implementing the Compensation Rules any maximum amount of
         compensation to be provided under the Compensation Rules, (ii) this
         maximum amount affects the net present values of the compensation
         amounts under 1(a),(b)(ii), (c)(ii) and (d)(ii) by limiting these net
         present values, (iii) the FS pay all Additional Settlement Amounts, and
         (iv) the State of the Netherlands subsequently decides in a Decree
         effective on or before 31 December 2010 to provide compensation to the
         Company in excess of this maximum amount. The Company will calculate
         the amounts under paragraph 1 in accordance with paragraph 2 taking
         into account the excess provided in accordance with the Decree under
         (iv) over the maximum amount referred to under (i), and pay to the FS
         the difference between these amounts and the Additional Settlement
         Amounts (such difference, the "MAXIMUM REPAYMENT AMOUNT"). The Company
         will submit to the FS the calculation of the Maximum Repayment Amount
         within six months from the effective date of the Decree referred to in
         this paragraph under (iv) (the "MAXIMUM REPAYMENT CALCULATION"). The
         Maximum Repayment Amount will accrue interest at a rate of 6% per annum
         from 1 January 2001 to the date of submission of the Maximum Repayment
         Calculation and at the rate which applies under the Escrow Agreement
         dated 7 October 1999 from the date of the submission of the Maximum
         Repayment Calculation to the date of payment.

         The FS may notify the Company within 20 days of receipt of the Maximum
         Repayment Calculation in writing that they dispute the Maximum
         Repayment Calculation. If the FS

                                       7
<PAGE>
    do not notify the Company within 20 days of receipt that they dispute the
    Maximum Repayment Calculation, the Company shall pay the Maximum Repayment
    Amount promptly. However, in the event that the FS dispute part of the
    Maximum Repayment Calculation, the disputed amount will be increased with
    statutory interest from the date of the Maximum Repayment Calculation to the
    date of payment. If the FS notify the Company in writing that they dispute
    the Maximum Repayment Calculation, the Parties will promptly enter into
    negotiations to reach an amicable resolution of the disputed Maximum
    Repayment Calculation. If no resolution is achieved within 30 days of the
    FS's notice of the dispute, each Party shall be entitled to initiate
    arbitration in accordance with Article 13 of this Agreement.

    The Maximum Repayment Amount shall be paid through set-off against any
    Additional Settlement Claims or Further Settlement Claim or, if no such
    Additional Settlement Claims or Further Settlement Claim shall be
    outstanding, by payment to the FS.

13. Any introduction of, changes in, or withdrawal of, the Compensation Rules
    after submission of all Additional Settlement Claims shall not affect the
    Additional Settlement Amounts.

ARTICLE 6    EXPERT DETERMINATION ("BINDEND ADVIES")

1.  The Parties will before 30 January 2002 jointly select and appoint a
    certified accountant (the "Expert"). If the Parties fail to reach agreement
    on this selection and appointment, each of the Parties shall be entitled to
    request the President of the NIVRA to select and appoint the Expert. The
    Parties will submit to the Expert the following documents within two weeks
    of his appointment: this Agreement with its Exhibits. The parties will use
    their best efforts to agree on an explanatory memorandum on the Annex E
    Spreadsheet. The Parties will request that the Expert review these documents
    with a view to his duties under this Article 6. If the Expert does not
    accept these duties within two weeks of the request by the Parties, or
    thereafter is not available to make the Determination within ten weeks of
    the Request for Determination, the Parties will consult to appoint another
    Expert promptly.

2.  The FS may, within 21 days after an Election Notice in which the Company
    elects to apply Article 5, submit a Request for Determination to the Expert
    with a copy to the Company. The following documents will be submitted to the
    Expert, by the FS with the Request for Determination or by the Company
    promptly thereafter: the Compensation Rules, with their history and
    explanatory note (""parlementaire geschiedenis", "nota van toelichting" and
    other relevant parliamentary documents).

3.  The Request for Determination will request that the Expert make the
    Determination by calculating the compensation under the Annex E Formulas and
    the Compensation Rules, using the same assumptions as in the Annex E
    Spreadsheet and as clarified in the Annex E Comparison.

4.  The Expert will allow the Parties to comment in each others' presence at a
    hearing held within four weeks of the Request for Determination. The Expert
    will issue a draft Determination within two weeks of the hearing and invite
    the Parties to comment within two weeks of the draft Determination. The
    Expert will issue the Determination within six weeks of the hearing.

5.  In determining whether Article 4 or Article 5 applies, the Expert will not
    consider whether or not the State of the Netherlands makes a temporary
    withholding of compensation owed to the Company under the Compensation Rules
    in respect of any REB Advantage until the arbitral awards in the REB
    Arbitrations.

6.  In determining whether Article 4 or Article 5 applies, the Expert will take
    into account an imposition by the State of the Netherlands of a time limit
    of 31 December 2010, or

                                       8
<PAGE>
                                                                  EXECUTION COPY

     later, (the "TIME LIMIT") on the period for which compensation will be
     provided under the Compensation Rules, if an extension of such period is
     expressly excluded by the State of the Netherlands unless the State of the
     Netherlands undertakes in the Compensation Rules to provide for
     compensation in respect of stranded costs for district heating projects for
     the lifetime of the district heating projects, subject to notification to
     the European Commission. In this latter case Article 4 will apply.

7.   Any imposition by the State of the Netherlands in a Decree of a maximum
     compensation amount for the Company and the Other Generators of less than
     NLG 1,000,000,000 will constitute a Determination that the compensation
     calculated under the Compensation Rules is not at least the same as the
     compensation calculated under the Annex E Formulas, using the same
     assumptions as in the Annex E Spreadsheet and as clarified in the Annex E
     Comparison, and that Article 5 applies, provided that the maximum
     compensation amount does not include a compensation for REB Advantage. Any
     maximum other than as specified in the previous sentence will not be
     considered in making the Determination.

8.   The Parties will bear all costs in relation to the Determination in equal
     portions, regardless of the substance of the Determination.

ARTICLE 7 FURTHER SETTLEMENT

1.   Under application of Article 5, if the State of the Netherlands does not
     provide for compensation in respect of stranded costs for district heating
     projects for the lifetime of the district heating projects, then the
     Company will calculate these stranded costs for the period for which the
     State of the Netherlands does not provide compensation (the "Uncompensated
     Period"). This calculation (the "Further Calculation") will be a net
     present value calculation as per 1 January 2001 of these stranded costs
     over the Uncompensated Period, in accordance with the Annex E Formulas,
     using the assumptions in the Annex E Spreadsheet, and as clarified in the
     Annex E Comparison, excluding any Additional Settlement Amounts paid by
     the FS to the Company in respect of the Uncompensated Period, and will be
     made within six months after the first day of the Uncompensated Period.
     The Company will submit a claim (a "Further Settlement Claim") to the FS,
     with the Further Calculation, within nine months after the first day of
     the Uncompensated Period.

2.   The FS may notify the Company within 20 days of receipt of a Further
     Settlement Claim in writing that they dispute a Further Settlement Claim,
     failing which the FS shall pay the amount listed in the Further Settlement
     Claim promptly, but not later than 20 days after receipt of the Further
     Settlement Claim. However, in the event that the FS dispute part of a
     Further Settlement Claim, the FS will in accordance with the previous
     sentence pay the undisputed amount of the Further Settlement Claim. If the
     FS notify the Company in writing that they dispute a Further Settlement
     Claim, the Parties will promptly enter into negotiations to reach an
     amicable resolution of the disputed amount. If no resolution is achieved
     within 30 days of the FS's notice of the dispute, each Party shall be
     entitled to initiate arbitration in accordance with Article 13 of this
     Agreement.

3.   Any Further Settlement Claim will be increased by interest at 6% per annum
     as from 1 January 2001 to the date of the claim. From the date of the
     Further Settlement Claim to the date of payment, interest will accrue on
     any Further Settlement Claim at the rate which applies under the Escrow
     Agreement of 7 October 1999. If, however, the FS dispute a Further
     Settlement Claim, any unpaid part of that Further Settlement Claim will be
     increased only by statutory interest from the date of the respective
     Further Settlement Claim until the date of payment. The Further Settlement
     Claim will never exceed NLG 700,000,000 less the Additional Settlement
     Claims after set-off with the

                                       9
<PAGE>
                                                                  EXECUTION COPY

         Maximum Repayment Amount, if any, provided that the Further Settlement
         Claim is a net present value amount as per 1 January 2001.

ARTICLE 8 FIRST ESCROW ACCOUNT

1.       The Parties agree in respect of the First Escrow Account that after the
         release of the Settlement Amount pursuant to Article 1, the District
         Heating Settlement Amount pursuant to Article 4 and, subject to Article
         4, the Additional District Heating Settlement Amount, the remaining
         Escrow Amount in the First Escrow Account shall be released to the FS
         within 20 days after an Election Notice that Article 4 applies or a
         Determination that Article 4 applies.

2.       If Article 5 applies, the Company will submit the respective Additional
         Settlement Claim or Calculation. If the maximum amount of any unpaid
         Additional Settlement Claims submitted by the Company plus the balance
         of the maximum amount of potential future Additional Settlement Claims
         over any Negative Amount, is less than the remaining Escrow Amount in
         the First Escrow Account, the amount of this difference will be
         released from the First Escrow Account to the FS within 20 days of the
         respective Additional Settlement Claim or Calculation.

3.       The Escrow Amount in the First Escrow Account, less the difference
         between any unpaid Additional Settlement Claims submitted by the
         Company and any Negative Amount, will be released to the FS on 30
         January 2004.

ARTICLE 9 SECOND ESCROW ACCOUNT

1.       The Parties agree that the Escrow Agent is only entitled to release an
         amount from the Second Escrow Account to the Company submits to the
         Escrow Agent a written certificate (i) stating the amount and
         describing the nature of the Stranded Costs incurred and (ii)
         confirming that the Company shall utilise the amount to be released
         exclusively for paying or reimbursing the Company for such Stranded
         Costs.

2.       Any remaining amounts held in the Second Escrow Account shall be
         released to the Company on 30 January 2004.

ARTICLE 10 UNCITRAL ARBITRATION PROCEEDINGS

The Parties will request that the Arbitral Tribunal freeze the arbitration
proceedings the Company has brought against the FS (registered under no. UN1316
following the Notice of Arbitration of 10 August 2001) immediately after
signature of this Agreement until the obligations of Parties under this
Agreement become effective or this Agreement is deemed null and void. The
Company will withdraw these arbitration proceedings if and when this Agreement
becomes effective.

ARTICLE 11 EFFECT OF THIS AGREEMENT

This Agreement shall become effective upon a date to be agreed upon by the
Parties.

ARTICLE 12 COURT PROCEEDINGS

The Company is not obliged to challenge any decree or resolution or decision by
the State of the Netherlands to deny or reduce compensation of Stranded Costs
for district heating projects or any compensation for loss of REB Advantage to
the Company. The Company will permit the FS to appoint counsel to act, on behalf
of the Company but on the instructions and at the expense of the FS, to
challenge in favour of the Company and for the benefit of the FS any such decree
or resolution or decision, and counsel will keep the Company fully informed in
this respect.

                                       10
<PAGE>
                                                                  EXECUTION COPY

ARTICLE 13      APPLICABLE ARTICLES

Articles 24, 26, 27, 31, 32, 33, 35, 39.2, 40 and 41 of the Partnership
Agreement govern this Agreement. Capitalized terms used in this Agreement which
are not defined in this Agreement have the meanings assigned to them in the
Share Purchase Agreement, as amended by the Deed of Amendment and the
Supplemental Agreement. The Parties waive any rights to, in whole or in part,
terminate, annul, rescind this Agreement or to request, in whole or in part,
the rescission or dissolution of this Agreement on any grounds including but
not limited to breach of contract (wanprestatie), error (dwaling) and
unforeseen circumstances (onvoorziene omstandigheden).

ARTICLE 14      NOTICE

Any notice to be given by any Party in respect of this Agreement shall be in
writing and shall be deemed duly served if delivered personally or sent by fax
or by prepaid registered post to the addressee at the relevant address as
follows:

If to the Municipality of Amsterdam:
Postbus 202
1000 AE AMSTERDAM
for the attention of: Directeur Concern Financien
fax: +31 20 552 29 45

If to the Province of Noord-Holland:
Gedeputeerde Staten van Noord-Holland
Postbus 123
2000 MD UTRECHT
for the attention of: het Hoofd van de Afdeling Financieel-Economische Zaken
fax: +31 23 514 41 40

If to the Province of Utrecht:
Gedeputeerde Staten van Utrecht
Postbus 80300
3508 TH UTRECHT
for the attention of: J.A. van der Veen
fax: +31 30 258 22 62

If to the Municipality of Utrecht:
Postbus 16200
3500 CE UTRECHT
for the attention of: G.I.A. Koenders
fax: +31 30 286 10 22

If to N.V. Provinciaal en Gemeentelijk Utrechts Stroomleveringsbedrijf:
Postbus 16200
3500 CE UTRECHT
for the attention of: G.I.A. Koenders
fax: +31 30 286 10 22

If to Reliant Energy Power Generation Inc.:
1111 Louisiana
Houston, Texas, United States of America 77002
for the attention of: P. Castanon
fax: +1 713 207 0159

                                       11
<PAGE>
                                                                  EXECUTION COPY

If to Reliant Energy Wholesale Holdings (Europe) Inc.:
1111 Louisiana
Houston, Texas, United States of America 77002
for the attention of: P. Castanon
fax: +1 713 207 0159

If to Reliant Energy Power Generation Benelux N.V.:
Beech Avenue 1
1118 ZX SCHIPHOL-RIJK
for the attention of: P. Castanon
fax: 020 506 44 45

or to such other address as the Party to be served may have notified as its
address for service.

In witness whereof this Agreement is executed by the Parties hereto in sixfold
on 21 November 2001.

GEMEENTE AMSTERDAM

/s/ J. B. IRIK
---------------------------------------
for and on behalf of Gemeente Amsterdam
By: J. B. Irik
Its: Wethouder

PROVINCIE NOORD HOLLAND

By: /s/ [ILLEGIBLE]
----------------------------------------
Name: [Illegible]
Title: [Illegible]

PROVINCIE UTRECHT

By: /s/ [ILLEGIBLE]
----------------------------------------
Name: [Illegible]
Title: [Illegible]

                                       12
<PAGE>
                                                                  EXECUTION COPY

GEMEENTE UTRECHT

By: /s/ M. A. VD BERGER
----------------------------------------
Name:  M. A. Vd Berger
Title: Wethouder

N.V. PROVINCIAAL EN GEMEENTELIJK
UTRECHTS STROOMLEVERINGSBEDRIJF

/s/ B. TROWBERST
----------------------------------------
for an on behalf of N.V. Provinciaal en Gemeentelijk
Utrechts Stroomleveringsbedrijf
By:    B. Trowberst
Its:   Director

RELIANT ENERGY POWER GENERATION INC.

By: /s/ P. CASTANON
----------------------------------------
Name:  P. Castanon
Title: Agent

RELIANT ENERGY WHOLESALE HOLDINGS (EUROPE) INC.

By: /s/ P. CASTANON
----------------------------------------
Name:  P. Castanon
Title: Agent

RELIANT ENERGY POWER GENERATION BENELUX N.V.

By: /s/ G. SCHLOSSER
----------------------------------------
Name:  G. Schlosser
Title: Chief Financial Officer

                                       13

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