Houston, Texas, February 23, 1999-El Paso Power Holding Company, a business unit of El Paso Energy Corporation (NYSE:EPG) announced today that it has acquired a 50 percent interest in CE Generation LLC, a holding company of CalEnergy Company, Inc. which owns 14 power generation facilities in the United States. The purchase price of $259.6 million includes equity contributions totaling $23.5 million for two CE Generation LLC facilities currently in construction and 50 percent of CE Generation LLC and project level debt. The transaction is scheduled to close on March 3, 1999 and will be accretive to earnings immediately thereafter.

The fourteen power projects owned by CE Generation LLC have a combined electric generating capacity of approximately 896 net megawatts and include ten geothermal projects near the Imperial Valley in southern California and four natural gas-fired cogeneration projects in New York, Pennsylvania, Texas and Arizona.

This release includes forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The companies have made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release. While the companies make these statements and projections in good faith, neither the companies nor their managements can guarantee that the anticipated future results will be achieved. Reference should be made to the companies' (and their affiliates') Securities and Exchange Commission filings for additional important factors that may affect actual results.