Reliant announces cut backs in 2006 hedging strategy

Reliant Energy will be reducing its use of hedging, after incurring losses last year which led to increased costs and collateral requirements.

Costs to eliminate hedges totalled an estimated $415 million last year and will be $643 million this year, the company said. It will continue limited hedging in selected circumstances, but will not continue with forward power sales from coal assets, it said. In addition, the company said it will exit existing hedges not consistent with the new strategy.

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