Exhibit 99.1

Press Release

SOURCE: Dynegy Inc.

Dynegy Provides Financial Update, Comments On Ratings Agency Actions

HOUSTON--(BUSINESS WIRE)--July 23, 2002--Consistent with its ongoing commitment
to provide frequent and open communications about its financial position, Dynegy
Inc. (NYSE:DYN - News) today reported that it is revising its earlier fiscal
year 2002 guidance for cash flow from operations to a range of $600 million to
$700 million from its previous estimate of up to $1 billion.

The company attributed the reduction to a downturn in its marketing and trading
activities, partially the result of industry conditions, and lower-than-expected
prices for power, natural gas and natural gas liquids. The same fundamentals
have also impacted Dynegy's liquidity, which currently ranges between $800
million and $850 million.

Chief Executive Officer Dan Dienstbier said, "At last week's regular board
meeting, the directors indicated they are satisfied with both the speed of
execution and progress we have made on our capital and liquidity plan."

As previously reported, Dynegy has achieved several milestones in its capital
and liquidity plan announced on June 24, 2002, including:

The elimination of $301 million in credit ratings triggers;

A $250 million advance on asset sale proceeds for Dynegy's UK Storage assets;

An amended West Coast Power credit facility, which improved Dynegy's liquidity
by $100 million; and

A $200 million interim financing secured by Renaissance and Rolling Hills
merchant power generation facilities.

"It is clear that the marketing and trading business, in particular, has changed
dramatically in recent weeks. A strong investment grade rating will be required
for this business to be successful in the future," Dienstbier said. "With the
board's support, Dynegy's management team is exploring strategic options for the
risk management business, including the creation of an independently rated joint
venture for that business."

In light of yesterday's ratings actions, Dynegy said that its subsidiary,
Illinois Power (IP), has terminated the previously announced $325 million
mortgage bond sale scheduled to close today. IP hopes to complete a mortgage
bond sale later in the quarter.



With regard to the ratings actions, Dienstbier said, "While we are certainly
disappointed, we understand the agencies' views and remain committed to
re-establishing an investment grade credit profile."

Dynegy will simulcast its second quarter 2002 earnings conference call live via
the Internet on Tuesday, July 30 at 10:00 a.m. ET, 9:00 a.m. CT. The webcast can
be accessed via www.dynegy.com (click on "News and Financials"). The company
plans to provide 2002 annual earnings guidance at that time.

Dynegy Inc. is a global energy merchant. Through its owned and contractually
controlled network of physical assets and its marketing, logistics and risk
management capabilities, Dynegy provides solutions to customers in North
America, the United Kingdom and continental Europe.

Certain statements included in this news release are intended as
"forward-looking statements" under the Private Securities Litigation Reform Act
of 1995. These statements include assumptions, expectations, predictions,
intentions or beliefs about future events. Dynegy cautions that actual future
results may vary materially from those expressed or implied in any
forward-looking statements. Some of the key factors that could cause actual
results to vary materially from those expected include changes in energy
commodity prices; the timing and extent of deregulation of energy markets in
North America and Europe; the effectiveness of Dynegy's risk management policies
and procedures and the creditworthiness of customers and counterparties; the
liquidity and competitiveness of wholesale trading markets for energy
commodities; operational factors affecting Dynegy's power generation or
midstream natural gas facilities; the cost of borrowing, availability of trade
credit and other factors affecting Dynegy's financing activities, including
Dynegy's ability to execute its capital plan and to maintain its credit ratings;
the demand for and pricing of services offered by Dynegy's telecommunications
segment and the effect of general market conditions in the telecommunications
segment on customers or prospective customers and equipment and service
providers; uncertainties regarding environmental regulations or litigation and
other legal or regulatory developments affecting Dynegy's business, including
litigation relating to the terminated merger with Enron, the California power
market and shareholder claims, as well as the SEC, U.S. Attorney and CFTC
investigations primarily relating to Project Alpha and the CMS Energy trades;
general political, economic and financial market conditions; and any extended
period of war or conflict involving North America or Europe. In addition, the
results of Dynegy's balance sheet reconciliation process and the re-audit of its
1999-2001 financial statements could cause material changes to Dynegy's reported
financial results for the applicable periods, to current expectations and
estimates and to financial results for future periods. More information about
the risks and uncertainties relating to these forward-looking statements are
found in Dynegy's SEC filings, which are available free of charge on the SEC's
web site at http://www.sec.gov.