4.     Additional Conditions of the Exchange Offer

                In addition, Xcel Energy will not be required to accept shares of NRG Common Stock for exchange and may choose to extend the expiration of the Exchange Offer or to terminate the Exchange Offer if any of the following occurs and is continuing, and in its good faith reasonable judgment, regardless of the circumstances, it would be inadvisable to proceed with the Exchange Offer:

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These five conditions of the offer are for the sole benefit of Xcel Energy and may be waived by Xcel Energy, in whole or in part, at any time and from time to time prior to the expiration of the Exchange Offer, in its sole discretion, subject to its obligations under the Commission’s rules and regulations. Failure to exercise any of the foregoing rights will not be deemed a waiver of any right.

                5.     Stockholder Litigation

                Shortly after the announcement on February 15, 2002, of the Exchange Offer and the Merger, individual stockholders of NRG filed nine separate but similar class action complaints in the Delaware Court of Chancery against Xcel Energy, NRG and the nine members of NRG’s board. Each of the actions was brought as a class action on behalf of all holders of NRG’s shares, other than the defendants and persons related to or affiliated with the defendants. The actions generally allege that Xcel Energy, NRG and the individual defendants breached fiduciary duties of care, loyalty and candor in connection with the Exchange Offer and the Merger, which the complaints assert is being undertaken in an unfair and coercive manner, at an unfairly low price, using inside information and with inadequate disclosure, all in furtherance of the interests of Xcel Energy at the expense of the public stockholders of NRG.

                The actions considered collectively seek judgment declaring that they may be maintained as class actions, with the respective plaintiffs as class representatives; enjoining the

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Exchange Offer and the Merger; if the transaction is consummated, then rescinding it or awarding rescissory damages; awarding an unspecified sum in damages; accounting to plaintiffs and the class for all profits and special benefits obtained through the transaction; and awarding unspecified costs, disbursements, and attorneys’ and experts’ fees and expenses.

                More recently, a similar class-action complaint challenging the transaction was filed in a Minnesota state court by an NRG stockholder against Xcel Energy, and seven of the nine NRG directors (excluding two present officers of Xcel Energy), advancing essentially the same charges in breach of fiduciary duties, unfairness, and use of superior knowledge in furtherance of the interests of Xcel Energy at the expense of public stockholders of NRG, and characterizing the activities of the special committee and its advisers as a sham. The action seeks judgment declaring that it may be maintained as a class-action; declaring the proposed transaction to be unfair, unjust and inequitable to plaintiff and members of the class; enjoining the defendants from taking any steps to accomplish or implement the proposed transaction with adequate safeguards for the interests of the public stockholders; awarding an unspecified sum in damages, plus interest; and awarding unspecified costs and disbursements, including attorneys’, accounts’ and experts’ fees.

                Neither Xcel Energy nor the other defendants have yet responded to the complaints but Xcel Energy believes there are both factual and legal defenses available and intends to pursue them actively.

ITEM 2.   Fees, Commissions and Expenses

                The estimated fees, commissions and expenses Applicants expect to incur in connection with the proposed transactions are as follows:

ITEM 3.   Applicable Statutory Provisions

                Sections 6(a), 7, 9, 10, 11, 12, 32 and 33 of the Act and Rules 51, 53, 54 and 58 are considered applicable to the proposed transactions as described below:

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                To the extent that the proposed transactions are considered by the Commission to require authorization, exemption or approval under any section of the Act or the rules and regulations other than those set forth above, request for such authorization, exemption or approval is hereby made.

                A.     Discussion

                        1.     Acquisition of NRG Common Stock

                        The acquisition of the shares of NRG Common Stock satisfies the standards of Section 10 of the Act, including, in particular, Section 10(c)(1) which requires that the acquisition of an interest in a business not be “unlawful under the provisions of Section 8” or “detrimental to the carrying out of the provisions of Section 11” of the Act. Section 11(b)(1), in turn, directs the Commission to limit the retention by registered holding companies of non-utility businesses to those that are “reasonably incidental, or economically necessary or appropriate” to the utility operations, including non-utility businesses which are “necessary or appropriate in the public interest or for the protection of investors or consumers and not detrimental to the proper functioning” of the holding company system.

                       In the Merger Order, the Commission addressed the retention by Xcel Energy of its interest in NRG and concluded that the businesses of NRG were properly retainable by Xcel Energy under the Act. The proposed transaction does not affect, or in any way change, the nature of the business of NRG. Rather, the proposed transaction merely changes the level of Xcel Energy’s ownership of NRG — from 74.3% to 100% of the outstanding common shares of NRG, which will simplify the corporate and capital structure of Xcel Energy.

                       With respect to Section 8 and as indicated above, NRG is not a “public utility company” or a “holding company” under the Act. The Exchange Offer and the Merger will not affect the ownership or operation of the Xcel Energy Utility Subsidiaries. As described below under Item 4, no state regulatory or other approvals are required in connection with the Exchange Offer and the Merger.7

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                       Thus, Applicants respectfully submit that the Commission should find that the consummation of the Exchange Offer and the Merger is permissible under Section 10 of the Act.

                       2.     Issuance of Xcel Energy Stock in Exchange for NRG Common Stock

                       By this Application, Xcel Energy requests authority to issue up to 33,394,564 shares of its common stock. The 33,394,564 shares would be issued by Xcel Energy in connection with the Exchange Offer and the Merger and upon the subsequent exercise of options issued by NRG for or conversion of the corporate units issued by NRG into shares of Xcel Energy common stock.8 This authority would be in addition to the $2 billion aggregate authority contained in the Financing Order.⁹

                As discussed below, Xcel Energy currently is in compliance with the 30% common equity ratio and the issuance of this additional common stock will further strengthen Xcel Energy’s capitalization ratio.

                B.     Rule 54 Analysis.

                Rule 54 provides that in determining whether to approve certain transactions other than those involving EWGs or FUCOs, as defined in the Act, the Commission will not consider the effect of the capitalization or earnings of any subsidiary which is an EWG or FUCO if Rule 53(a), (b) and (c) are satisfied. Xcel satisfies all of the conditions of Rule 53 except Rule 53(a)(1).

                As of December 31, 2001, Xcel Energy’s “aggregate investment,” as defined in Rule 53(a)(l), was $929 million10. During the first quarter of 2002, Xcel Energy made loans to NRG in the aggregate amount of $300 million. Xcel Energy has plans to invest an additional $300 million in NRG in 2002 if the Exchange Offer and the Merger are completed. On a pro forma basis to take into account such investments and Xcel Energy’s acquisition of the NRG Common Stock in the Exchange Offer and the Merger (and reflecting the entire acquisition price as an investment in EWGs and FUCOs), as of December 31, 2001, Xcel Energy’s “aggregate investment,” as defined in Rule 53(a)(1), in EWGs and FUCOs would have been approximately

        ⁹ In New Century Energies, Inc., HCAR No. 27218 (August 22, 2000) (the “Financing Order”), the Commission authorized Xcel Energy to issue and sell up to $2 billion of long-term debt and common stock (exclusive of common stock issued to fund benefit plans and dividend reinvestment plans). Xcel Energy already has issued $600 million of debt and approximately $500 million of common stock against this limitation.

        ¹⁰ For purposes of these calculations, Xcel Energy’s investment in NRG (including, on a pro forma basis, Xcel Energy’s investment in NRG resulting from the acquisition of NRG Common Stock in the Exchange Offer and the Merger) has been included as an investment in EWGs and FUCOs even though NRG itself is not qualified as an EWG or FUCO, but rather serves as an intermediate holding company for EWG, FUCO and Rule 58 energy-related businesses. Xcel Energy’s investment in NRG includes total paid in capital and outstanding loans of $300 million. Xcel Energy has no outstanding guarantees or other recourse obligations in respect of any obligations of NRG Energy.

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$2.115 billion. This amount is within the authorization granted to Xcel Energy in the Commission’s recent order (Xcel Energy Inc., Holding Co. Act Release No. 27494 (March 7, 2002)) (the “March Order”) to invest up to 100% of its consolidated retained earnings, as defined in Rule 53 (which, at December 31, 2001, was $2.467 billion), in EWGs and FUCOs.

                In its March Order, the Commission authorized Xcel Energy to invest up to 100% of its consolidated retained earnings, as defined in Rule 53, in EWGs and FUCOs and found that such an investment would not have either of the adverse effects set forth in Rule 53(c). There has been no material change in the facts or circumstances surrounding Xcel Energy’s capitalization since the March Order was issued.

                Reference is made to Exhibit I filed herewith which sets forth Xcel Energy’s consolidated capitalization at December 31, 2001, as adjusted to give effect to the issuance by Xcel Energy of its common stock in the equity offering in February 2002 and to the transactions proposed herein. As is evident from that Exhibit, at December 31, 2001, Xcel Energy’s common equity as a percentage of capitalization was 30.5%. The proposed transaction improves that ratio. As shown on Exhibit I, on a pro forma basis to take into account the recent equity offering by Xcel Energy and the Exchange Offer and the Merger, the ratio of Xcel Energy’s common equity to its total consolidated capitalization would be 31.9%.

                Xcel Energy currently complies with, and will comply with, the record-keeping requirements of Rule 53(a)(2), the limitation under Rule 53(a)(3) on the use of the Xcel Energy system’s domestic public-utility company personnel to render services to EWGs and FUCOs, and the requirements of Rule 53(a)(4) concerning the submission of copies of certain filings under the Act to retail regulatory commissions. Further, none of the circumstances described in Rule 53(b) has occurred or is continuing.

ITEM 4.   Regulatory Approvals

                As a condition to the consummation of the Exchange Offer, the Commission must declare effective Xcel Energy’s registration statement on Form S-4 filed with the Commission on March 13, 2002 in File No. 333-84264. See Exhibit C hereto.

                No state commission has jurisdiction over the proposed transactions. No other approvals are required.

ITEM 5.   Procedure

                The Applicants hereby request that there be no hearing on this Application-Declaration and that the Commission issue its order as soon as practicable after the filing hereof. The Commission is requested to issue and publish the requisite notice under Rule 23 with respect to this Application-Declaration by March 15, 2002; such notice specifying April 5, 2002 as the date by which comments may be entered and the date on which an order of the Commission granting and permitting the Application-Declaration to become effective may be entered by the Commission. The Applicants hereby (i) waive a recommended decision by a hearing officer, (ii) waive a recommended decision by any other responsible officer or the Commission, (iii) consent that the Division of Investment Management may assist in the preparation of the

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Commission’s decision and (iv) waive a 30-day waiting period between the issuance of the Commission’s order and the date on which it is to become effective.

ITEM 6.   Exhibits and Financial Statements

                A.     Exhibits

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                B.     Financial Statements

ITEM 7.   Information as to Environmental Effects

                The proposed transaction involves neither a “major federal action” nor “significantly affects the quality of the human environment” as those terms are used in Section 102(2)(C) of the National Environmental Policy Act, 42 U.S.C. Sec. 4321 et seq. No federal agency is preparing an environmental impact statement with respect to this matter.

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SIGNATURE

                Pursuant to the requirements of the Public Utility Holding Company Act of 1935, the Applicants have duly caused this Application-Declaration to be signed on their behalf by the undersigned thereunto duly authorized.

Date: March 14, 2002

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EXHIBIT H

FORM OF NOTICE OF PROPOSED TRANSACTIONS

SECURITIES AND EXCHANGE COMMISSION

(Release No. 35          ; 70-         )

Filings under the Public Utility Holding Company Act of 1935 (“Act”)

Xcel Energy Inc. (“Xcel Energy”)

March 15, 2002

                Notice is hereby given that the following filing(s) has/have been made with the Commission pursuant to provisions of the Act and rules promulgated under the Act. All interested persons are referred to the application(s) and/or declaration(s) for complete statements of the proposed transaction(s) summarized below. The application(s) and/or declaration(s) and any amendments is/are available for public inspection through the Commission’s Office of Public Reference.

                Interested persons wishing to comment or request a hearing on the application(s) and/or declaration(s) should submit their views in writing by April 5, 2002 to the Secretary, Securities and Exchange Commission, Washington, D.C. 20549-0609, and serve a copy on the relevant applicant(s) and or declarant(s) at the address(es) specified below. Proof of service (by affidavit or, in the case of an attorney at law, by certificate) should be filed with the request. Any request for hearing should identify specifically the issues of fact or law that are disputed. A person who so requests will be notified of any hearing, if ordered, and will receive a copy of any notice or order issued in the matter. After said date, the application(s) and/or declaration(s), as filed or as amended, may be granted and/or permitted to become effective.

                Xcel Energy Inc. (“Xcel Energy”), a registered public utility holding company, and its wholly owned subsidiary, NRG Acquisition Company, LLC (“Acquisition Company”, and, together with Xcel Energy, “Applicants”), both located at 800 Nicollet Mall, Minneapolis, Minnesota 55402, have filed an application-declaration under sections 6(a), 7, 9(a), 10, 11, 12, 32 and 33 of the Act and rules 51, 53, 54 and 58 under the Act.

                Applicants propose to acquire in an exchange offer (the “Exchange Offer”) all of the issued and outstanding Common Stock, par value $.01, of NRG Energy, Inc., a Delaware corporation, (“NRG”) held by the public (the “Common Stock”). Through its subsidiary Xcel Energy Wholesale Group, Inc. (“Wholesale”), Xcel Energy owns 147,604,500 shares of NRG’s Class A Common Stock, each of which is convertible at any time into one share of NRG’s Common Stock. The Class A Common Stock represents 74.3% of all of the outstanding shares

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of both classes of NRG’s common shares combined as of March 8, 2002. Because each share of Class A Common Stock entitles Xcel Energy to ten votes, Xcel Energy, through Wholesale, holds 96.7% of the combined voting power of all of NRG’s outstanding common shares.

                NRG’s Common Stock is registered under section 12(b) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), and is listed for trading on the New York Stock Exchange.

                Under the terms of the Exchange Offer, Xcel Energy is offering to exchange 0.4846 of a share of Xcel Energy common stock, and cash in lieu of fractional shares, for each outstanding share of NRG Common Stock that is validly tendered in the Exchange Offer and not properly withdrawn prior to the expiration of the Exchange Offer. Xcel Energy will not acquire any shares of NRG’s Common Stock in the Exchange Offer unless NRG stockholders who are not directors or executive officers of Xcel Energy have tendered, and not withdrawn, as of the expiration of the Exchange Offer, enough shares so that, when taken together with the shares of NRG Common Stock that Xcel Energy would hold after the conversion of Class A Common Stock, Xcel Energy would own at least 90% of NRG’s outstanding Common Stock. The obligation to exchange shares of Xcel Energy common stock for shares of NRG Common Stock is also subject to other conditions, including Rule 51 under the Act.11

                If the Exchange Offer is successful, Wholesale will convert enough shares of the Class A Common Stock into shares of NRG Common Stock so that Xcel Energy will own at least 90% of NRG’s outstanding Common Stock. Wholesale will then contribute all of the Common Stock of NRG that it holds, and at least 90% of the shares of Class A Common Stock that it owns and did not convert, to Acquisition Company. Acquisition Company will convert from a limited liability company to a corporation under Delaware law and immediately thereafter will effect a “short-form” merger under Delaware law (the “Merger”) merging Acquisition Company with and into NRG, unless prevented from doing so by court order. Each outstanding share of NRG Common Stock not acquired in the Exchange Offer (except for the shares of Common Stock owned by Acquisition Company and except for shares held by stockholders who properly perfect their appraisal rights under Delaware law12), will be converted in the Merger into the right to receive 0.4846 of a share of Xcel Energy common stock, and cash in lieu of fractional shares. As a result, after completion of the Merger, NRG will be an indirect, wholly owned subsidiary of Xcel Energy.

                As of February 27, 2002, 50,975,665 shares of NRG Common Stock were issued and outstanding, and 17,935,940 shares have been reserved for issuance pursuant to the exercise

        ¹² Under Delaware law, holders of NRG Common Stock do not have appraisal rights in connection with the Exchange Offer. If the Exchange Offer is successfully completed, holders of shares of NRG Common Stock will be entitled to appraisal rights as and to the extent provided in Section 262 of the Delaware General Corporation Law.

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of options and conversion of equity units. Xcel Energy does not currently own any shares of NRG Common Stock.

                NRG has outstanding stock options, which were issued to employees and certain directors of NRG pursuant to the NRG long-term incentive compensation plan and a predecessor plan, to purchase approximately 7.3 million shares of NRG Common Stock (of which options to purchase approximately 1.3 million shares were vested and exercisable as of March 6, 2002) and 11,500,000 equity units initially consisting of corporate units that are listed and traded on the New York Stock Exchange. The terms of the exercisable options and the purchase agreement associated with the corporate units currently enable the holders to purchase NRG Common Stock. To the extent holders of such options or corporate units exercise their rights to purchase NRG Common Stock prior to the completion of the Exchange Offer and the Merger, such holders will be eligible to participate in the Exchange Offer and the Merger to the same extent as other holders of NRG Common Stock. Following completion of the Exchange Offer and the Merger, the terms of all remaining stock options and corporate units will be adjusted, in accordance with the plan or documents governing such options or corporate units, so that each outstanding option or corporate unit will cease to be a right or an obligation to purchase NRG Common Stock and will become a right or obligation to purchase Xcel Energy common stock.

                Xcel Energy also requests authority to issue up to 33,394,564 shares of its common stock. The 33,394,564 shares would be issued by Xcel Energy in connection with the Exchange Offer and the Merger and upon the subsequent exercise of options issued by NRG for or conversion of the corporate units issued by NRG into shares of Xcel Energy common stock. This authority would be in addition to the $2 billion aggregate authority contained in New Century Energies, Inc., Holding Co. Act Release No. 27218 (August 22, 2000).

                NRG is primarily engaged in the acquisition, development, ownership and operation of power generation facilities and the sale of energy, capacity and related products. As of December 31, 2001, NRG had interests in power generation facilities (including those under construction) having a total generating capacity of 38,388MW of which NRG has or will have net ownership of 24,357MW. Approximately 19,100MW, or 78%, of NRG’s net MW generation in operation and under construction is located in the United States. NRG has international power generation projects managed in three distinct markets: Australia/Asia Pacific, Europe and Latin/South America. At December 31, 2001, NRG had net ownership interests of 2,297MW in Asia Pacific, 1,854MW in Europe and 1,107 MW in Latin America.

                In addition to NRG’s power generation projects, NRG also has interests in district heating and cooling systems and steam transmission operations. As of December 31, 2001, NRG’s thermal and chilled water businesses had a steam and chilled water capacity equivalent to 1,506 MW, of which its net ownership interest was 1,379MW. NRG believes that through its subsidiary, NEO Corporation, it is one of the largest landfill gas generation companies in the United States, extracting methane from landfills to generate electricity. NEO Corporation owns 31 landfill gas collection systems and has 46MW of net ownership interests in related electric generation facilities. NEO Corporation also has 42MW of net ownership interests in 18 small hydroelectric facilities and 109MW of net ownership interest in seven distributed generation facilities.

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                For the Commission, by the Division of Investment Management, pursuant to delegated authority.

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EXHIBIT I

Pro Forma Capitalization of Xcel Energy Inc.
as of December 31, 2001 (in 000’s)

        ² Xcel Energy issued approximately $500 million of common stock on Febraury 28, 2002. Xcel Energy advanced $300 million to NRG as subordinated debt. Xcel Energy plans to contribute an additional $300 million to NRG in 2002 if the Exchange Offer and the Merger are completed.