Document:

<PAGE>
                                                                    EXHIBIT 10.2

                       FIRST AMENDMENT TO CREDIT AGREEMENT

                  FIRST AMENDMENT (this "Amendment"), dated as of July 12, 2002,
to the $1,800,000,000 Senior B Credit Agreement, dated as of July 13, 2001 (as
heretofore amended, supplemented or otherwise modified, the "Credit Agreement"),
among HOUSTON INDUSTRIES FINANCECO LP, a Delaware limited partnership (the
"Borrower"), RELIANT ENERGY, INCORPORATED, a Texas corporation ("Reliant
Energy"), the several banks and other financial institutions (the "Banks") and
agents from time to time parties thereto and JPMORGAN CHASE BANK (f/k/a The
Chase Manhattan Bank), as administrative agent for the Banks (in such capacity,
the "Agent").

                              W I T N E S S E T H :
                               - - - - - - - - - -

                  WHEREAS, the Borrower, Reliant Energy, the Banks and the Agent
are parties to the Credit Agreement; and

                  WHEREAS, the Borrower and Reliant Energy have requested that
the Banks agree to extend the Termination Date and amend certain other
provisions contained in the Credit Agreement, and the Banks and the Agent are
agreeable to such request upon the terms and subject to the conditions set forth
herein.

                  NOW, THEREFORE, in consideration of the premises herein
contained and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:

                  1. Defined Terms. Unless otherwise defined herein, capitalized
terms used herein which are defined in the Credit Agreement are used herein as
therein defined.

                  2. Amendment to Section 1.1 of the Credit Agreement (Certain
Defined Terms). Section 1.1 of the Credit Agreement is hereby amended by
deleting, in their entirety, the terms "Applicable Margin", "Consolidated
Capitalization", "Designated Rating", "Rating Agencies", "Termination Date" and
"Usage Fee" appearing therein and inserting the following new definitions in the
appropriate alphabetical order:

                  ""Applicable Margin" means the rate per annum set forth below
         opposite the Designated Rating from time to time in effect during the
         period for which payment is due, with respect to any Committed Loan:

<Table>
<Caption>
            =====================================================================================
                                            Applicable Margin for       Applicable Margin for ABR
                 Designated Rating            LIBOR Rate Loans                    Loans
            -------------------------------------------------------------------------------------
<S>                                                <C>                           <C>
               BBB+/Baa1 and higher                1.500%                        0.500%
            -------------------------------------------------------------------------------------
                     BBB/Baa2                      1.650%                        0.650%
            -------------------------------------------------------------------------------------
                     BBB-/Baa3                     2.000%                        1.000%
            -------------------------------------------------------------------------------------
            BB+/Ba1 or lower or unrated            2.500%                        1.500%
            =====================================================================================
</Table>

         In each row in the table set forth above, the first indicated rating
         corresponds to that assigned by S&P and the second indicated rating
         corresponds to that assigned by Moody's; the determination of which row
         of such table is applicable at any time is set forth in the definition
         of "Designated Rating".

<PAGE>
                  "Consolidated Capitalization" means, as of any date of
         determination, the sum of (a) Consolidated Shareholders' Equity, (b)
         Consolidated Indebtedness for Borrowed Money and, without duplication,
         (c) Mandatory Payment Preferred Stock; provided that for the purpose of
         calculating compliance with Section 8.4(b), Consolidated Capitalization
         shall be determined excluding any adjustment, non-cash charge to net
         income or other non-cash charges or writeoffs resulting thereto from
         application of SFAS No. 142.

                  "Designated Rating" means (a) at any time that the Long Term
         Debt Rating is assigned by both S&P and Moody's and such ratings are
         equivalent, such rating shall be the Designated Rating, (b) if clause
         (a) does not apply, (i) at any time that the Long Term Debt Rating is
         issued by only one of S&P or Moody's, the rating of such debt issued by
         such Rating Agency shall be the Designated Rating, and (ii) at any time
         that such debt is rated by both S&P and Moody's, the lower of such
         ratings and (c) if neither (a) nor (b) apply, if the Long Term Debt
         Rating is not assigned by either S&P or Moody's, the rating assigned to
         the senior unsecured debt of Reliant Energy shall be the Designated
         Rating in accordance with clauses (a) and (b) above. Any change in the
         calculation of the Facility Fees or the Applicable Margin with respect
         to the Borrower that is caused by a change in the Designated Rating
         will become effective on the date of the change in the Designated
         Rating. If the rating system of any Rating Agency shall change, or if
         either S&P or Moody's shall cease to be in the business of rating
         corporate debt obligations, Borrower and the Agent shall negotiate in
         good faith if necessary to amend this definition to reflect such
         changed rating system or the unavailability of ratings from such Rating
         Agencies and, pending the effectiveness of any such amendment, the
         Designated Rating shall be determined by reference to the rating most
         recently in effect prior to such change or cessation.

                  "Master Separation Agreement" means the master separation
         agreement, dated as of December 31, 2000, entered into between Reliant
         Energy and Unregco providing for, among other things, the Spin-off, as
         amended, modified or supplemented from time to time.

                  "Rating Agencies" means S&P and Moody's.

                  "Termination Date" means (a) initially October 10, 2002,
         unless the Majority Banks direct in writing on or prior to September 5,
         2002 that such Termination Date shall be September 10, 2002, in which
         case the Termination Date shall automatically be deemed to be September
         10, 2002, or (b) any earlier date on which (i) the Commitments have
         been terminated in accordance with this Agreement or (ii) all unpaid
         principal amounts of Loans hereunder have become due and payable in
         accordance with this Agreement.".

                  3. Amendment to Section 2.1 of the Credit Agreement (The
Committed Loans). Section 2.1 of the Credit Agreement is hereby amended by
adding at the end of paragraph (b) thereof the following:

                         "At a reasonable time at least one week prior to
                         September 5, 2002, the Agent shall inquire as to
                         whether requisite Banks intend to send the written
                         direction referred to in the definition of Termination
                         Date and shall notify the Borrower and the Banks if the
                         requisite number of such directives have been
                         received.".

                  4. Amendment to Section 4.2 of the Credit Agreement (Fees).
Section 4.2 of the Credit Agreement is hereby amended by:

                  (a) deleting the table in paragraph (a) thereof in its
entirety, and inserting in lieu thereof the following table:

<Table>
<Caption>
            "Designated Rating                               Facility Fee Rate
            ------------------                               -----------------
<S>                                                            <C>
            BBB+/Baa1 or higher                                0.250%
            BBB/Baa2                                           0.350%
            BBB-/Baa3                                          0.500%
            BB+/Ba1 or lower or unrated                        0.500%"; and
</Table>

                                      2
<PAGE>

                  (b) deleting paragraph (b) thereof in its entirety and
substituting in lieu thereof the following:

                         "(b) [INTENTIONALLY OMITTED.]"; and

                  (c) amending paragraph (c) thereof by (i) deleting the phrase
"and Usage Fees" and (ii) deleting the reference to "Sections 4.2(a) and 4.2(b)"
and substituting in lieu thereof "Section 4.2(a)".

                  5. Amendment to Section 4.4(a) of the Credit Agreement (ABR
Loans). Section 4.4(a) of the Credit Agreement is hereby amended by adding
immediately after "ABR" in clause (i) therein "plus the Applicable Margin".

                  6. Amendment to Section 8.4(b) of the Credit Agreement
(Financial Ratios). Section 8.4(b) of the Credit Agreement is hereby amended by
deleting the ratio "0.65:1.00" and substituting in lieu thereof "0.68:1.00".

                  7. Amendment to Section 8.4(g) of the Credit Agreement
(Certain Investments, Loans, Advances, Guarantees and Acquisitions). Section
8.4(g) of the Credit Agreement is hereby amended by adding at the end thereof
the following:

                           "Notwithstanding the foregoing, Reliant Energy and
                  its Subsidiaries shall not (x) make any future investments in,
                  loans to, advances to and Guarantees of any obligations in
                  Unregco or any of its Subsidiaries, (y) purchase or otherwise
                  acquire (in one transaction or a series of related
                  transactions) any assets of Unregco or any of its Subsidiaries
                  other than, in the case of this clause (y), any such
                  transactions contemplated by the Master Separation Agreement
                  and other agreements and arrangements in respect of the
                  relationship between Reliant Energy and Unregco described in
                  Reliant Energy's filings with the SEC or (z) enter into any
                  other transaction constituting a Reliant Energy Investment
                  with Unregco and its Subsidiaries other than, in the case of
                  this clause (z), the transactions contemplated by the Master
                  Separation Agreement and other agreements and arrangements in
                  respect of the relationship between Reliant Energy and Unregco
                  described in Reliant Energy's filings with the SEC or other
                  arrangements among Reliant Energy, Unregco and their
                  respective Subsidiaries in the ordinary course of business
                  consistent with recent past practices or otherwise at prices
                  and on terms and conditions not less favorable to Reliant
                  Energy or its Subsidiaries (other than Unregco and its
                  Subsidiaries) than could be obtained on an arm's length basis
                  from unrelated third parties.".

                  8. Amendment to Section 11.1 of the Credit Agreement
(Amendments and Waivers). Section 11.1 of the Credit Agreement is hereby amended
by (a) deleting "or" at the end of clause (iii) thereof and substituting in lieu
thereof a semicolon, (b) deleting the period at the end of clause (iv) thereof
and substituting in lieu thereof ", or" and (c) adding at the end thereof
immediately after clause (iv) a new clause (v) as follows:

                           "(v) amend, modify or waive the last paragraph of
                  Section 8.4(g) without the written consent of the
                  Supermajority Banks.".

                  9. Amendment to Exhibit L to the Credit Agreement (Form of
Regco $1.8 Billion Credit Agreement). Exhibit L to the Credit Agreement (the
"Regco Credit Agreement") is hereby amended in the manner set forth on Exhibit
A.

                  10. Confirmation and Reaffirmation of Loan Documents. Each
Loan Party does hereby (a) consent and acknowledge and agree to the transactions
described in this Amendment and (b) after giving effect to this Amendment, (i)
confirms, reaffirms and restates the representations and warranties (except for
those representations or warranties or parts thereof that, by their terms,
expressly relate solely to a specific date) made by it in each Loan Document to
which it is a party, (ii) ratifies and confirms each Loan Document to which it
is a party and (iii) confirms and agrees that each such Loan Document is, and
shall continue to be in full force and effect, with

                                       3
<PAGE>
(to the extent applicable) the collateral described therein securing and
continuing to secure, the payment of all obligations of such Loan Party referred
to therein; provided that each reference to the Credit Agreement therein and in
each of the other Loan Documents shall be deemed to be a reference to the Credit
Agreement after giving effect to this Amendment.

                  11. Conditions to Effectiveness. This Amendment shall become
effective as of the date set forth above upon satisfaction of the following
conditions precedent:

                  (a) The Agent shall have received counterparts of this
         Amendment executed by the Borrower, Reliant Energy and each of the
         Banks;

                  (b) The Agent shall have received an amendment fee for the
         account of each Bank in an amount equal to 0.125% of such Bank's
         Commitment;

                  (c) All corporate and other proceedings, and all documents,
         instruments and other legal matters in connection with this Amendment
         shall be in form and substance reasonably satisfactory to the Agent;

                  (d) The Agent shall have received all fees and expenses
         required to be paid in connection with the Credit Agreement; and

                  (e) The Agent shall have received satisfactory legal opinions
         and other documents and certificates reasonably requested by the Agent.

                  12. Reference to and Effect on the Loan Documents; Limited
Effect. On and after the date hereof and the satisfaction of the conditions
contained in Section 11 of this Amendment, each reference in the Credit
Agreement to "this Agreement", "hereunder", "hereof" or words of like import
referring to the Credit Agreement, and each reference in the other Loan
Documents to "the Credit Agreement", "thereunder", "thereof" or words of like
import referring to the Credit Agreement, shall mean and be a reference to the
Credit Agreement as amended hereby. The execution, delivery and effectiveness of
this Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of any Bank or the Agent under any of the
Loan Documents, nor constitute a waiver of any provisions of any of the Loan
Documents. Except as expressly amended herein, all of the provisions and
covenants of the Credit Agreement and the other Loan Documents are and shall
continue to remain in full force and effect in accordance with the terms thereof
and are hereby in all respects ratified and confirmed.

                  13. Representations and Warranties. Each of the Borrower and
Reliant Energy, as of the date hereof and after giving effect to the amendment
contained herein, hereby confirms, reaffirms and restates the representations
and warranties (except for those representations or warranties or parts thereof
that, by their terms, expressly relate solely to a specific date) made by it in
Article VII of the Credit Agreement and otherwise in the Loan Documents to which
it is a party; provided that each reference to the Credit Agreement therein
shall be deemed to be a reference to the Credit Agreement after giving effect to
this Amendment.

                  14. Counterparts. This Amendment may be executed by one or
more of the parties hereto in any number of separate counterparts (which may
include counterparts delivered by facsimile transmission) and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Any executed counterpart delivered by facsimile transmission shall
be effective as an original for all purposes hereof. The execution and delivery
of this Amendment by any Bank shall be binding upon each of its successors and
assigns (including Transferees of its Commitments and Loans in whole or in part
prior to effectiveness hereof) and binding in respect of all of its Commitments
and Loans, including any acquired subsequent to its execution and delivery
hereof and prior to the effectiveness hereof.

                  15. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                                       4
<PAGE>
                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed and delivered by their duly authorized officers as of
the date first written above.

                                          HOUSTON INDUSTRIES
                                          FINANCECO LP

                                          By: HOUSTON INDUSTRIES
                                              FINANCECO GP, LLC,
                                              its General Partner

                                          By: /s/ MARC KILBRIDE
                                             -----------------------------------
                                              Name:  Marc Kilbride
                                              Title: Treasurer

                                          RELIANT ENERGY, INCORPORATED

                                          By: /s/ MARC KILBRIDE
                                             -----------------------------------
                                              Name:  Marc Kilbride
                                              Title: Treasurer

                                          JPMORGAN CHASE BANK, as
                                          Agent and as a Bank

                                          By: /s/ ROBERT TRABAND
                                             -----------------------------------
                                              Name:  Robert Traband
                                              Title: Vice President

<PAGE>
                                                                  Signature Page
                                             Senior B Credit Agreement Amendment

                                          ABN AMRO BANK N.V.

                                          By: /s/ THOMAS J. STARR
                                             -----------------------------------
                                          Name:  Thomas J. Starr
                                          Title: Vice President

                                          By: /s/ KRIS A. GROSSHANS
                                             -----------------------------------
                                          Name:  Kris A. Grosshans
                                          Title: Senior Vice President

<PAGE>
                                                                  Signature Page
                                             Senior B Credit Agreement Amendment

                                          BANK OF AMERICA, N.A.

                                          By: /s/ RICHARD L. STEIN
                                             -----------------------------------
                                          Name:  Richard L. Stein
                                          Title: Principal

<PAGE>
                                                                  Signature Page
                                             Senior B Credit Agreement Amendment

                                          BARCLAYS BANK PLC

                                          By: /s/ ERIC CHILTON
                                             -----------------------------------
                                          Name:  Eric Chilton
                                          Title: Managing Director

<PAGE>
                                                                  Signature Page
                                             Senior B Credit Agreement Amendment

                                          CITIBANK, N.A.

                                          By: /s/ SANDIP SEN
                                             -----------------------------------
                                          Name:  Sandip Sen
                                          Title: Managing Director

<PAGE>
                                                                  Signature Page
                                             Senior B Credit Agreement Amendment

                                          COMMERZBANK AG
                                          New York and Grand Cayman Branches

                                          By: /s/ HARRY P. YERGEY
                                             -----------------------------------
                                          Name:  Harry P. Yergey
                                          Title: Senior Vice President and
                                                 Manager

                                          By: /s/ W. DAVID SUTTLES
                                             -----------------------------------
                                          Name:  W. David Suttles
                                          Title: Vice President

<PAGE>
                                                              Signature Page
                                         Senior B Credit Agreement Amendment

                                      CREDIT SUISSE FIRST BOSTON

                                     By: /s/ JAMES P. MORAN  /s/ DAVID M. KOCZAN
                                        ----------------------------------------
                                     Name:  James P. Moran      David M. Koczan
                                     Title: Director            Associate

<PAGE>
                                                                  Signature Page
                                             Senior B Credit Agreement Amendment

                                          DEUTSCHE BANK AG NEW YORK BRANCH
                                          AND/OR CAYMAN ISLANDS BRANCH

                                          By: /s/ HANS C. NARBERHAUS
                                             -----------------------------------
                                          Name:  Hans C. Narberhaus
                                          Title: Vice President

                                          By: /s/ JOEL MAKOWSKY
                                             -----------------------------------
                                          Name:  Joel Makowsky
                                          Title: Vice President

<PAGE>
                                                                  Signature Page
                                             Senior B Credit Agreement Amendment

                                          WACHOVIA BANK, NATIONAL ASSOCIATION
                                          (f/k/a First Union National Bank)

                                          By: /s/ ROTCHER WATKINS
                                             -----------------------------------
                                          Name:  Rotcher Watkins
                                          Title: Managing Director

<PAGE>
                                                                  Signature Page
                                             Senior B Credit Agreement Amendment

                                          ROYAL BANK OF CANADA

                                          By: /s/ DAVID A. MCCLUSKEY
                                             -----------------------------------
                                          Name:  David A. McCluskey
                                          Title: Manager

<PAGE>
                                                                       EXHIBIT A

                  1. Defined Terms. Unless otherwise defined herein, capitalized
terms used herein which are defined in the Regco Credit Agreement are used
herein as therein defined.

                  2. Amendment to Section 1.01 of the Regco Credit Agreement
(Certain Defined Terms). Section 1.01 of the Regco Credit Agreement is hereby
amended by (a) deleting, in their entirety, the terms "Applicable Margin",
"Designated Rating", "Termination Date" and "Usage Fee" appearing therein and
inserting the following new definitions in the appropriate alphabetical order:

                  ""Applicable Margin" means the rate per annum set forth below
         opposite the Designated Rating from time to time in effect during the
         period for which payment is due, with respect to any Committed Loan:

<Table>
<Caption>
     =================================================================================================
                                                       Applicable Margin for     Applicable Margin for
        Designated Rating         Facility Fees          LIBOR Rate Loans              ABR Loans
     -------------------------------------------------------------------------------------------------
<S>                                   <C>                     <C>                       <C>
      BBB+/Baa1 and higher            0.250%                  1.500%                    0.500%
     -------------------------------------------------------------------------------------------------
            BBB/Baa2                  0.350%                  1.650%                    0.650%
     -------------------------------------------------------------------------------------------------
            BBB-/Baa3                 0.500%                  2.000%                    1.000%
     -------------------------------------------------------------------------------------------------
       BB+/Ba1 or lower or
             unrated                  0.500%                  2.500%                    1.500%
     =================================================================================================
</Table>

         In each row in the table set forth above, the first indicated rating
         corresponds to that assigned by S&P and the second indicated rating
         corresponds to that assigned by Moody's; the determination of which row
         of such table is applicable at any time is set forth in the definition
         of "Designated Rating".

                  "Designated Rating" means (a) at any time that the Long Term
         Debt Rating is assigned by both S&P and Moody's and such ratings are
         equivalent, such rating shall be the Designated Rating, (b) if clause
         (a) does not apply, (i) at any time that the Long Term Debt Rating is
         issued by only one of S&P or Moody's, the rating of such debt issued by
         such Rating Agency shall be the Designated Rating, and (ii) at any time
         that such debt is rated by S&P and Moody's, the lower of such ratings
         and (c) if neither (a) nor (b) apply, if the Long Term Debt Rating is
         not assigned by either S&P or Moody's, the rating assigned to the
         senior unsecured debt of Reliant Energy shall be the Designated Rating
         in accordance with clauses (a) and (b) above. Any change in the
         calculation of the Facility Fees or the Applicable Margin with respect
         to Borrower that is caused by a change in the Designated Rating will
         become effective on the date of the change in the Designated Rating. If
         the rating system of any Rating Agency shall change, or if either S&P
         or Moody's shall cease to be in the business of rating corporate debt
         obligations, Borrower and the Agent shall negotiate in good faith if
         necessary to amend this definition to reflect such changed rating
         system or the unavailability of ratings from such Rating Agencies and,
         pending the effectiveness of any such amendment, the Designated Rating
         shall be determined by reference to the rating most recently in effect
         prior to such change or cessation.

                  "Master Separation Agreement" means the master separation
         agreement, dated as of December 31, 2000, entered into between Reliant
         Energy and Unregco providing for, among other things, the Spin-off, as
         amended, modified or supplemented from time to time.

                  "Spin-off" shall have the meaning specified in Schedule 2
         attached hereto.
<PAGE>

                  "Supermajority Banks" means, at any time, Banks having at
         least 65% of the aggregate Commitments or, if the Commitments have been
         terminated, 65% of the aggregate Commitments in effect immediately
         prior to such termination.

                  "Termination Date" means (a) initially October 10, 2002,
         unless the Majority Banks direct in writing on or prior to September 5,
         2002 that such Termination Date shall be September 10, 2002, in which
         case the Termination Date shall automatically be deemed to be September
         10, 2002, or (b) any earlier date on which (i) the Commitments have
         been terminated in accordance with this Agreement or (ii) all unpaid
         principal amounts of Loans hereunder have become due and payable in
         accordance with this Agreement."; and

                  (b) amending the definition of "Consolidated EBITDA" by
         deleting "for any period" and substituting in lieu thereof "means, for
         any twelve-month period ending on the date of determination".

                  3. Amendment to Section 2.01 of the Credit Agreement (The
Committed Loans). Section 2.01 of the Credit Agreement is hereby amended by
adding at the end of paragraph (a) thereof the following:

                           "At a reasonable time at least one week prior to
                           September 5, 2002, the Agent shall inquire as to
                           whether requisite Banks intend to send the written
                           direction referred to in the definition of
                           Termination Date and shall notify the Borrower and
                           the Banks if the requisite number of such directives
                           have been received.".

                  4. Amendment to Section 4.02 of the Regco Credit Agreement
(Fees). Section 4.02 of the Regco Credit Agreement is hereby amended by:

                  (a) deleting paragraph (b) thereof in its entirety and
substituting in lieu thereof the following:

                           "(b)  [INTENTIONALLY OMITTED.]"; and

                  (b) amending paragraph (c) thereof by (i) deleting the phrase
"and Usage Fees"; and (ii) by deleting "Sections 4.02(a) and 4.02(b)" and
substituting in lieu thereof "Section 4.02(a)".

                  5. Amendment to Section 4.04(a) of the Credit Agreement (ABR
Loans). Section 4.04(a) of the Credit Agreement is hereby amended by adding
immediately after "ABR" in clause (i) therein "plus the Applicable Margin".

                  6. Amendment to Section 8.02(a) of the Regco Credit Agreement
(Financial Ratio). Section 8.02(a) of the Regco Credit Agreement is hereby
amended by deleting the ratio "4.50:1.00" and substituting in lieu thereof the
ratio "4.75:1.00".

                  7. Amendment to Section 8.02(g) of the Credit Agreement
(Certain Investments, Loans, Advances, Guarantees and Acquisitions). Section
8.02(g) of the Regco Credit Agreement is hereby amended by adding at the end
thereof the following:

                           "Notwithstanding the foregoing, Borrower and its
                  Subsidiaries shall not (x) make any future investments in,
                  loans to, advances to and Guarantees of any obligations in
                  Unregco or any of its Subsidiaries or purchase or otherwise
                  acquire (in one transaction or a series of related
                  transactions) any assets of Unregco or any of its
                  Subsidiaries, (y) purchase or otherwise acquire (in one
                  transaction or a series of related transactions) any assets of
                  Unregco or any of its Subsidiaries other than, in the case of
                  this clause (y), any such transactions contemplated by the
                  Master Separation Agreement and other agreements and
                  arrangements in respect of the relationship between Reliant
                  Energy and Unregco described in Reliant Energy's filings with
                  the SEC or (z) enter into any other transaction constituting
                  an Investment with Unregco and its Subsidiaries other than, in
                  the case of this clause (z), the transactions contemplated by
                  the Master Separation Agreement and other agreements and
                  arrangements in respect of the relationship between Reliant

<PAGE>
                  Energy and Unregco described in Reliant Energy's filings with
                  the SEC or other arrangements among Borrower, Unregco and
                  their respective Subsidiaries in the ordinary course of
                  business consistent with recent past practices or otherwise at
                  prices and on terms and conditions not less favorable to
                  Borrower or its Subsidiaries (other than Unregco and its
                  Subsidiaries) than could be obtained on an arm's length basis
                  from unrelated third parties.".

                  8. Amendment to Section 11.01 of the Credit Agreement
(Amendments and Waivers). Section 11.01 of the Credit Agreement is hereby
amended by (a) deleting "or" at the end of clause (ii) thereof and substituting
in lieu thereof a comma, (b) deleting the period at the end of clause (iii)
thereof and substituting in lieu thereof ", or" and (c) adding at the end
thereof immediately after clause (iii) a new clause (iv) as follows:

                           "(iv) amend, modify or waive the last paragraph of
                  Section 8.02(g) without the written consent of the
                  Supermajority Banks.".<PAGE>
                                                                    EXHIBIT 10.3

                       FIRST AMENDMENT TO CREDIT AGREEMENT

                  FIRST AMENDMENT, dated as of July 12, 2002 (this "Amendment"),
to the $400,000,000 Amended and Restated Revolving Credit and Competitive
Advance Facilities Agreement, dated as of July 13, 2001 (as heretofore amended,
supplemented or otherwise modified, the "Credit Agreement"), among, RELIANT
ENERGY, INCORPORATED, a Texas corporation ("Borrower"), the several banks and
other financial institutions (the "Banks") and agents from time to time parties
thereto and JPMORGAN CHASE BANK (f/k/a The Chase Manhattan Bank), as
administrative agent for the Banks (in such capacity, the "Agent").

                              W I T N E S S E T H :
                               - - - - - - - - - -

                  WHEREAS, Borrower, the Banks and the Agent are parties to the
Credit Agreement; and

                  WHEREAS, Borrower has requested that the Banks agree to extend
the Termination Date and amend certain other provisions contained in the Credit
Agreement, and the Banks and the Agent are agreeable to such request upon the
terms and subject to the conditions set forth herein.

                  NOW, THEREFORE, in consideration of the premises herein
contained and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:

                  1. Defined Terms. Unless otherwise defined herein, capitalized
terms used herein which are defined in the Credit Agreement are used herein as
therein defined.

                  2. Amendment to Section 1.01 of the Credit Agreement (Certain
Defined Terms). Section 1.01 of the Credit Agreement is hereby amended by
deleting, in their entirety, the terms "Applicable Margin", "Consolidated
Capitalization", "Consolidated Indebtedness", "Designated Rating", "Long-Term
Debt Rating", "Rating Agencies", "Termination Date" and "Usage Fee" appearing
therein and inserting the following new definitions in the appropriate
alphabetical order:

                  ""Applicable Margin" means the rate per annum set forth below
         opposite the Designated Rating from time to time in effect during the
         period for which payment is due, with respect to any Committed Loan:

<Table>
<Caption>
            =====================================================================================
                                            Applicable Margin for       Applicable Margin for ABR
                 Designated Rating            LIBOR Rate Loans                    Loans
            -------------------------------------------------------------------------------------
<S>                                                <C>                           <C>
               BBB+/Baa1 and higher                1.500%                        0.500%
            -------------------------------------------------------------------------------------
                     BBB/Baa2                      1.650%                        0.650%
            -------------------------------------------------------------------------------------
                     BBB-/Baa3                     2.000%                        1.000%
            -------------------------------------------------------------------------------------
            BB+/Ba1 or lower or unrated            2.500%                        1.500%
            =====================================================================================
</Table>

         In each row in the table set forth above, the first indicated rating
         corresponds to that assigned by S&P and the second indicated rating
         corresponds to that assigned by Moody's; the determination of which row
         of such table is applicable at any time is set forth in the definition
         of "Designated Rating".

                  "Consolidated Capitalization" means, as of any date of
         determination, the sum of (a) Consolidated Shareholders' Equity, (b)
         Consolidated Indebtedness for Borrowed Money and, without duplication,
         (c)

<PAGE>
         Mandatory Payment Preferred Stock; provided that for the purpose of
         calculating compliance with Section 8.02(a), Consolidated
         Capitalization shall be determined excluding any adjustment, non-cash
         charge to net income or other non-cash charges or writeoffs resulting
         thereto from application of SFAS No. 142.

                  "Consolidated Indebtedness" means, as of any date of
         determination, the sum of (i) the total Indebtedness as shown on the
         consolidated balance sheet of Borrower and its Consolidated
         Subsidiaries, determined without duplication of any Guarantee of
         Indebtedness of Borrower by any of its Consolidated Subsidiaries or of
         any Guarantee of Indebtedness of any such Consolidated Subsidiary by
         Borrower or any other Consolidated Subsidiary of Borrower, plus any
         Mandatory Payment Preferred Stock, less (ii) such amount of
         Indebtedness attributable to amounts then outstanding under receivables
         facilities or arrangements to the extent that such amounts would not
         have been shown as Indebtedness on a balance sheet prepared in
         accordance with GAAP prior to January 1, 1997, less (iii) if any
         Indexed Debt Securities the liabilities in respect of which as shown on
         the consolidated balance sheet of Borrower and its Consolidated
         Subsidiaries have increased from the amount of liabilities in respect
         thereof at the time of their issuance by reason of an increase in the
         price of the Indexed Asset relating thereto, the excess of (a) the
         aggregate amount of liabilities in respect of such Indexed Debt
         Securities at the time of determination over (b) the initial amount of
         liabilities in respect of such Indexed Debt Securities at the time of
         their issuance.

                  "Designated Rating" means (a) at any time that the Long -Term
         Debt Rating is assigned by both S&P and Moody's and such ratings are
         equivalent, such rating shall be the Designated Rating, (b) if clause
         (a) does not apply, (i) at any time that the Long -Term Debt Rating is
         issued by only one of S&P or Moody's, the rating of such debt issued by
         such Rating Agency shall be the Designated Rating, and (ii) at any time
         that such debt is rated by both S&P and Moody's, the lower of such
         ratings and (c) if neither (a) nor (b) apply, if the Long -Term Debt
         Rating is not assigned by either S&P or Moody's, the rating assigned to
         the senior unsecured long-term debt of Borrower shall be deemed to be
         the rating that is one level below the then current rating of the
         senior secured long-term debt of Borrower in accordance with clauses
         (a) and (b) above. Any change in the calculation of the Facility Fees
         or the Applicable Margin with respect to Borrower that is caused by a
         change in the Designated Rating will become effective on the date of
         the change in the Designated Rating. If the rating system of any Rating
         Agency shall change, or if either S&P or Moody's shall cease to be in
         the business of rating corporate debt obligations, Borrower and the
         Agent shall negotiate in good faith if necessary to amend this
         definition to reflect such changed rating system or the unavailability
         of ratings from such Rating Agencies and, pending the effectiveness of
         any such amendment, the Designated Rating shall be determined by
         reference to the rating most recently in effect prior to such change or
         cessation.

                  "Long-Term Debt Rating" means the rating assigned by a Rating
         Agency to the senior unsecured long-term debt of Borrower (it being
         understood that a change in outlook status (e.g., watch status,
         negative outlook status) is not a change in rating as contemplated
         hereby).

                  "Master Separation Agreement" means the master separation
         agreement, dated as of December 31, 2000, entered into between Borrower
         and Unregco providing for, among other things, the Spin-off, as
         amended, modified or supplemented from time to time.

                  "Moody's" means Moody's Investors Service, Inc., and any
         successor rating agency.

                  "Rating Agencies" means S&P and Moody's.

                  "S&P" means Standard & Poor's Ratings Group, and any successor
         rating agency.

                  "Spin-off" shall have the meaning specified in Schedule 8.04
         attached hereto.

                  "Supermajority Banks" means, at any time, Banks having at
         least 65% of the aggregate Commitments or, if the Commitments have been
         terminated, 65% of the aggregate Commitments in effect immediately
         prior to such termination.

                                       2
<PAGE>
                  "Termination Date" means (a) initially October 10, 2002,
         unless the Majority Banks direct in writing on or prior to September 5,
         2002 that such Termination Date shall be September 10, 2002, in which
         case the Termination Date shall automatically be deemed to be September
         10, 2002, or (b) any earlier date on which (i) the Commitments have
         been terminated in accordance with this Agreement or (ii) all unpaid
         principal amounts of Loans hereunder have become due and payable in
         accordance with this Agreement.".

                  3. Amendment to Section 2.01 of the Credit Agreement (The
Committed Loans). Section 2.01 of the Credit Agreement is hereby amended by
adding at the end thereof the following:

                           "At a reasonable time at least one week prior to
                           September 5, 2002, the Agent shall inquire as to
                           whether requisite Banks intend to send the written
                           direction referred to in the definition of
                           Termination Date and shall notify the Borrower and
                           the Banks if the requisite number of such directives
                           have been received.".

                  4. Amendment to Section 4.02 of the Credit Agreement (Fees).
Section 4.02 of the Credit Agreement is hereby amended by:

                  (a) deleting the table in paragraph (a) thereof in its
entirety, and inserting in lieu thereof the following table:

<Table>
<Caption>
            "Designated Rating                               Facility Fee Rate
            ------------------                               -----------------
<S>                                                            <C>
            BBB+/Baa1 or higher                                0.250%
            BBB/Baa2                                           0.350%
            BBB-/Baa3                                          0.500%
            BB+/Ba1 or lower or unrated                        0.500%"; and
</Table>

                  (b) amending paragraph (b) thereof by (i) deleting the phrase
"and the fees payable under Section 4.02(e)" and (ii) deleting the phrase ", as
the case may be,"; and

                  (c) deleting paragraph (e) thereof in its entirety.

                  5. Amendment to Section 4.04(a) of the Credit Agreement (ABR
Loans). Section 4.04(a) of the Credit Agreement is hereby amended by adding
immediately after "ABR" in clause (i) therein "plus the Applicable Margin".

                  6. Amendment to Section 8.02 of the Credit Agreement
(Financial Ratios). Section 8.02 of the Credit Agreement is hereby amended by
(a) amending paragraph (a) thereof by deleting the ratio "0.65:1.00" and
substituting in lieu thereof "0.68:1.00"; and

                  (b) by adding at the end thereof immediately after paragraph
(d) thereof a new paragraph (e) as follows:

                           "(e) Certain Investments, Loans, Advances, Guarantees
                  and Acquisitions. Borrower will not purchase, or acquire
                  (including pursuant to any merger) any capital stock,
                  evidences of indebtedness or other securities of or other
                  interest in (including any option, warrant or other right to
                  acquire any of the foregoing), make any loans or advances to,
                  Guarantee any obligations of, or make any investment in or
                  capital contribution to, any Subsidiary or any other Person
                  (any of the foregoing, an "Investment"), in each case after
                  the Effective Date, except pursuant to the Loan Documents and
                  except that, notwithstanding the foregoing Borrower and its
                  Subsidiaries may make Investments if, after giving effect
                  thereto, Borrower would be in compliance with its covenant
                  contained in Section 8.02(a) on a pro forma basis.

                                       3
<PAGE>

                           Notwithstanding the foregoing, Borrower and its
                  Subsidiaries shall not (x) make any future investments in,
                  loans to, advances to and Guarantees of any obligations in
                  Unregco or any of its Subsidiaries, (y) purchase or otherwise
                  acquire (in one transaction or a series of related
                  transactions) any assets of Unregco or any of its Subsidiaries
                  other than, in the case of this clause (y), any such
                  transactions contemplated by the Master Separation Agreement
                  and other agreements and arrangements in respect of the
                  relationship between Borrower and Unregco described in
                  Borrower's filings with the SEC or (z) enter into any other
                  transaction constituting an Investment with Unregco and its
                  Subsidiaries other than, in the case of this clause (z), the
                  transactions contemplated by the Master Separation Agreement
                  and other agreements and arrangements in respect of the
                  relationship between Borrower and Unregco described in
                  Borrower's filings with the SEC or other arrangements among
                  Borrower, Unregco and their respective Subsidiaries in the
                  ordinary course of business consistent with recent past
                  practices or otherwise at prices and on terms and conditions
                  not less favorable to Borrower or its Subsidiaries (other than
                  Unregco and its Subsidiaries) than could be obtained on an
                  arm's length basis from unrelated third parties.".

                  7. Amendment to Section 11.01 of the Credit Agreement
(Amendments and Waivers). Section 11.01 of the Credit Agreement is hereby
amended by (a) deleting "or" at the end of clause (ii) thereof and substituting
in lieu thereof a comma, (b) deleting the period at the end of clause (iii)
thereof and substituting in lieu thereof ", or" and (c) adding at the end
thereof immediately after clause (iii) a new clause (iv) as follows:

                           "(iv) amend, modify or waive the last paragraph of
                  Section 8.02(e) without the written consent of the
                  Supermajority Banks.".

                  8. Conditions to Effectiveness. This Amendment shall become
effective as of the date set orth above upon satisfaction of the following
conditions precedent:

                  (a) The Agent shall have received counterparts of this
         Amendment executed by Borrower and each of the Banks;

                  (b) The Agent shall have received an amendment fee for the
         account of each Bank in an amount equal to 0.125% of such Bank's
         Commitment;

                  (c) All corporate and other proceedings, and all documents,
         instruments and other legal matters in connection with this Amendment
         shall be in form and substance reasonably satisfactory to the Agent;

                  (d) The Agent shall have received all fees and expenses
         required to be paid in connection with the Credit Agreement; and

                  (e) The Agent shall have received satisfactory legal opinions
         and other documents and certificates reasonably requested by the Agent.

                  9. Reference to and Effect on the Loan Documents; Limited
Effect. On and after the date hereof and the satisfaction of the conditions
contained in Section 8 of this Amendment, each reference in the Credit Agreement
to "this Agreement", "hereunder", "hereof" or words of like import referring to
the Credit Agreement, and each reference in the other Loan Documents to "the
Credit Agreement", "thereunder", "thereof" or words of like import referring to
the Credit Agreement, shall mean and be a reference to the Credit Agreement as
amended hereby. The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of any Bank or the Agent under any of the Loan Documents,
nor constitute a waiver of any provisions of any of the Loan Documents. Except
as expressly amended herein, all of the provisions and covenants of the Credit
Agreement and the other Loan Documents are and shall continue to remain in full
force and effect in accordance with the terms thereof and are hereby in all
respects ratified and confirmed.

                                       4
<PAGE>

                  10. Representations and Warranties. Borrower, as of the date
hereof and after giving effect to the amendment contained herein, hereby
confirms, reaffirms and restates the representations and warranties (except for
those representations or warranties or parts thereof that, by their terms,
expressly relate solely to a specific date) made by it in Article VII of the
Credit Agreement and otherwise in the Loan Documents to which it is a party;
provided that each reference to the Credit Agreement therein shall be deemed to
be a reference to the Credit Agreement after giving effect to this Amendment.

                  11. Counterparts. This Amendment may be executed by one or
more of the parties hereto in any number of separate counterparts (which may
include counterparts delivered by facsimile transmission) and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Any executed counterpart delivered by facsimile transmission shall
be effective as an original for all purposes hereof. The execution and delivery
of this Amendment by any Bank shall be binding upon each of its successors and
assigns (including Transferees of its Commitments and Loans in whole or in part
prior to effectiveness hereof) and binding in respect of all of its Commitments
and Loans, including any acquired subsequent to its execution and delivery
hereof and prior to the effectiveness hereof.

                  12. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                                       5

<PAGE>
                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed and delivered by their duly authorized officers as of
the date first written above.

                                          RELIANT ENERGY, INCORPORATED

                                          By:/s/ MARC KILBRIDE
                                             -----------------------------------
                                              Name:  Marc Kilbride
                                              Title: Treasurer

                                          JPMORGAN CHASE BANK, as
                                          Agent and as a Bank

                                          By:/s/ ROBERT TRABAND
                                             -----------------------------------
                                              Name:  Robert Traband
                                              Title: Vice President

<PAGE>
                                                                  Signature Page
                                                  REI Credit Agreement Amendment

                                          BANK ONE, N.A.

                                          By:/s/ GEORGE SCHANZ
                                             -----------------------------------
                                          Name:  George Schanz
                                          Title: Managing Director

<PAGE>
                                                                  Signature Page
                                                  REI Credit Agreement Amendment

                                          BANK OF AMERICA, N.A.

                                          By:/s/ RICHARD L. STEIN
                                             -----------------------------------
                                          Name:  Richard L. Stein
                                          Title: Principal

<PAGE>
                                                                  Signature Page
                                                  REI Credit Agreement Amendment

                       BAYERISCHE LANDESBANK GIROZENTRALE, CAYMAN ISLANDS BRANCH

                       By:/s/ HEREWARD DRUMMOND         By:/s/ SEAN O'SULLIVAN
                          -------------------------        ---------------------
                       Name:  Hereward Drummond         Name:  Sean O'Sullivan
                       Title: Senior Vice President     Title: Vice President

<PAGE>
                                                                  Signature Page
                                                  REI Credit Agreement Amendment

                                          CITIBANK, N.A.

                                          By: /s/ SANDIP SEN
                                             -----------------------------------
                                          Name: Sandip Sen
                                          Title: Managing Director

<PAGE>
                                                                Signature Page
                                                REI Credit Agreement Amendment

                                        COMMERZBANK AG
                                        New York and Grand Cayman Branches

                                        By: /S/ HARRY P. YERGEY
                                           -------------------------------------
                                        Name: Harry P. Yergey
                                        Title: Senior Vice President and Manager

                                        By: /s/ W. DAVID SUTTLES
                                           -------------------------------------
                                        Name: W. David Suttles
                                        Title: Vice President

<PAGE>
                                                                  Signature Page
                                                  REI Credit Agreement Amendment

                                          CREDIT AGRICOLE INDOSUEZ

                                          By:     /s/ GERARD M. RUSSELL
                                             -----------------------------------
                                          Name:   Gerard M. Russell
                                          Title:  Vice President, Manager

                                          By:     /s/ LAURENCE F. GRANT
                                             -----------------------------------
                                          Name:   Laurence F. Grant
                                          Title:  Senior Relationship Manager

<PAGE>
                                                                  Signature Page
                                                  REI Credit Agreement Amendment

                                          CREDIT SUISSE FIRST BOSTON

                                          By:     /s/ JAMES P. MORAN
                                             -----------------------------------
                                          Name:   James P. Moran
                                          Title:  Director

                                          By:     /s/ DAVID M. KOCZAN
                                             -----------------------------------
                                          Name:   David M. Koczan
                                          Title:  Associate

<PAGE>
                                                                  Signature Page
                                                  REI Credit Agreement Amendment

                                          KBC BANK N.V.

                                          By:     /s/ ROBERT SNAUFFER
                                             -----------------------------------
                                          Name:   Robert Snauffer
                                          Title:  First Vice President

                                          By:     /s/ ERIC RASKIN
                                             -----------------------------------
                                          Name:   Eric Raskin
                                          Title:  Vice President

<PAGE>
                                                                  Signature Page
                                                  REI Credit Agreement Amendment

                                          MELLON BANK, N.A.

                                          By: RICHARD A. MATTHEWS
                                             -----------------------------------
                                          Name:  Richard A. Matthews
                                          Title: First Vice President

<PAGE>
                                                                  Signature Page
                                                  REI Credit Agreement Amendment

                                          MIZUHO CORPORATE GROUP, LTD.

                                          By: /s/ TORU MAEDA
                                             -----------------------------------
                                          Name:  Toru Maeda
                                          Title: General Manager

<PAGE>
                                                                  Signature Page
                                                  REI Credit Agreement Amendment

                                          SUMITOMO MITSUI BANKING CORPORATION

                                          By: /s/ DAVID A BUCK
                                             -----------------------------------
                                          Name:  David A. Buck
                                          Title: Senior Vice President

<PAGE>
                                                                  Signature Page
                                                  REI Credit Agreement Amendment

                                          TORONTO DOMINION (TEXAS) INC.

                                          By: /s/ MARK A. BAIRD
                                             -----------------------------------
                                          Name:  Mark A. Baird
                                          Title: Vice President

<PAGE>
                                                                  Signature Page
                                                  REI Credit Agreement Amendment

                                          UBS AG, STAMFORD BRANCH

                                          By: /s/ DAVID J. KEITEL
                                             -----------------------------------
                                          Name:  David J. Keitel
                                          Title: Executive Director
                                                 Recovery Management

                                          By: /s/ WILFRED V. SAINT
                                             -----------------------------------
                                          Name:  Wilfred V. Saint
                                          Title: Associate Director
                                                 Banking Products Services, US

<PAGE>
                                                                  Signature Page
                                                  REI Credit Agreement Amendment

                                          WESTDEUTSCHE LANDESBANK
                                          GIROZENTRALE, New York Branch

                                          By: /s/ SALVATORE BATTINELLI
                                             -----------------------------------
                                          Name: Salvatore Battinelli
                                          Title: Managing Director
                                                 Credit Department

                                          By: /s/ ANTHONY ALESSANDRO
                                             -----------------------------------
                                          Name: Anthony Alessandro
                                          Title: Associate Director

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