CALENERGY QUESTIONS NYSEG'S LATEST TACTICS NEW YORK, Aug. 14 /PRNewswire-AsiaNet/ -- CalEnergy Company, Inc. ("CalEnergy") (NYSE: CE; Pacific, London: CE) made the following statement in response to the recent suggestion of New York State Electric & Gas Corporation ("NYSEG") (NYSE: NGE) that it would consider reviewing its dividend policy: "NYSEG shareholders should not be misled by NYSEG's latest defensive tactic. Since CalEnergy announced its 9.9% cash tender offer on July 15, NYSEG management has engaged in a systematic campaign to entrench themselves at the expense of their shareholders and ratepayers. NYSEG has gone to great lengths to create confusion in an attempt to prevent NYSEG shareholders from tendering into our offer. Shareholders need to be aware that CalEnergy's tender offer is scheduled to expire at midnight tonight. "The latest example of NYSEG's tactics is the shameless suggestion that NYSEG will 'review its dividend policy.' May we remind shareholders that NYSEG cut its dividend before, most recently in October 1994. Here is what James A. Carrigg, NYSEG's then Chairman, President and Chief Executive Officer and a current member of NYSEG's Board, said the 1994 dividend cut would deliver to NYSSEG shareholders: "'Today's dividend reduction is a turning point for NYSEG,' said James Carrigg. 'No doubt the pace of change in our industry will continue to accelerate. Financial flexibility will be essential in a competitive environment, and stronger utilities will command higher stock valuations. This dividend reduction will allow us to improve the financial integrity of NYSEG and offer improved shareholder value over the long term... We remain convinced that NYSEG will succeed and that we will provide attractive returns for our shareholders,' Mr. Carrigg said. "While NYSEG may have been convinced, the market clearly has not been. "In fact, during one of the biggest bull-markets this country has ever seen, NYSEG shareholders have suffered through a 32% decline in the price of their NYSEG stock from July 31, 1992 to June 30, 1997. Now that CalEnergy is offering shareholders more value than NYSEG has created on its own, NYSEG suggests reviewing its dividend policy yet again. The timing of this latest empty promise is no coincidence. "Ask yourself, what future does NYSEG, a consistent underperformer, have absent CalEnergy's merger proposal? "Ask yourself, what has NYSEG done in response to our cash offer, to enhance shareholder value? "In the span of just a few weeks, not content with merely squirreling away $52 million in a bank account for 'Golden Parachutes', NYSEG has spent or committed to spend additional funds, resulting in an estimated total of $80 million of your money to 'defend' NYSEG management. These actions have included a number of unnecessary and expensive lawsuits and other proceedings initiated by NYSEG. In the New York PSC proceeding initiated by NYSEG, the PSC ruled in CalEnergy's favor yesterday, noting: "'The Commission finds that it should act immediately under section 202 (6) of the State Administrative Procedure Act to consent to the tender offer. Such action is appropriate in light of the possible harm to holders of 9.9% of NYSEG's stock and the lack of any benefit to ratepayers from a delay in the tender offer, under conditions in this new order. After review, it may in fact prove that the CalEnergy takeover will benefit ratepayers. Precluding the tender offer now may prevent the takeover and could deny ratepayers that benefit.' "As a result of their actions, NYSEG now faces six lawsuits brought against its Board by its own shareholders for breach of fiduciary duty. "NYSEG shareholders should not be misled. CalEnergy's tender offer is scheduled to expire at midnight tonight. Perhaps, Jim Carrigg really did say it best, 'No doubt the pace of change in our industry will continue to accelerate.' We at CalEnergy do not want NYSEG shareholders to be left behind yet again." CalEnergy, which manages and owns interests in over 5,000 net MW of power generation facilities in operation, construction and development worldwide, currently operates 20 generating facilities and also supplies and distributes electricity to 1.5 million customers. CONTACT: Patti McAtee, Director, Corporate Communications of CalEnergy, 402-341-4500; or Joele Frank of Abernathy MacGregor, 212-371-5999.