Dynegy to Retire Wood River Power Generation Station
November 04 2015 - 4:33PM
Business Wire
Dynegy Inc. (NYSE: DYN) announced today plans to retire its 465
megawatt (MW) Wood River Power Station in Alton, Illinois in
mid-2016. The Wood River Power Station includes two coal-fueled
units that entered commercial operation in 1954 and 1964,
respectively.
The decision to retire the Wood River facility is due to its
uneconomic operation stemming from a poorly designed wholesale
capacity market in Central and Southern Illinois that does not
allow competitive generators to recover costs. The current market
design of the Midcontinent Independent System Operator, Inc. (MISO)
capacity auction is flawed because it allows regulated utilities
from surrounding states to bid their capacity into the auction at
little to no cost as these regulated utilities receive higher
guaranteed compensation from their respective state-regulated
markets. Central and Southern Illinois market participants, on the
other hand, operate in a state with a deregulated competitive
framework and must rely on the MISO capacity auction for fair
compensation, unlike their regulated counterparts. Mixing these two
regulatory regimes together in the same capacity auction puts all
generating units in Central and Southern Illinois at financial
risk, regardless of fuel type, shifting jobs and the economic
benefits of hosting generating plants from Central and Southern
Illinois to neighboring states.
“I would like to thank the men and women who have proudly and
professionally served and safely operated the Wood River facility
for decades,” said Robert C. Flexon, president and CEO of Dynegy.
“Wood River has been an important part of the local community for
many years providing safe, reliable, and cost effective power while
also being a responsible corporate citizen.”
“Dynegy is committed to working with MISO, the state of
Illinois, Union leadership and all stakeholders to redesign the
MISO capacity market to one that properly functions and fairly
compensates competitive generators or alternatively, to transition
Illinois fully into PJM. Otherwise, all generating plants in the
MISO portion of Illinois will face a future of financial challenge.
If Wood River was located in the PJM market, like Dynegy’s Northern
Illinois generating units, it is unlikely this retirement would be
occurring,” added Flexon.
Dynegy expects to formally file a retirement notice with MISO by
December 1, 2015. This retirement notice will trigger a reliability
review by MISO, which the Company expects to be completed in the
first quarter of 2016. If MISO determines the plant is not needed
for reliability, Dynegy expects the retirement to occur in
mid-2016.
Dynegy will be developing plans to minimize the impact on the
approximately 90 employees at Wood River where possible, and to
terminate operations in a safe and environmentally responsible
manner. The Company will work with all of the relevant state,
local, and community stakeholders to address the impact of the
retirement of Wood River.
About Dynegy
We are committed to leadership in the electricity sector. With
nearly 26,000 megawatts of power generation capacity and two retail
electricity companies, Dynegy is capable of supplying 21 million
homes with safe, reliable and economic energy. Homefield Energy and
Dynegy Energy Services are retail electricity providers serving
businesses and residents in Illinois, Ohio and Pennsylvania.
Forward Looking Statements
This press release contains statements reflecting assumptions,
expectations, projections, intentions or beliefs about future
events that are intended as “forward-looking statements,”
particularly those statements concerning timeline and scope of the
MISO retirement notice; outcome of the MISO reliability review; and
Dynegy’s anticipated impacts and expected timing and manner of
retirement. Discussion of risks and uncertainties that could cause
actual results to differ materially from current projections,
forecasts, estimates and expectations of Dynegy is contained in its
filings with the Securities and Exchange Commission (the “SEC”).
Specifically, Dynegy makes reference to, and incorporates herein by
reference, the section entitled “Risk Factors” in its 2014
Form 10-K and subsequent Form 10-Qs. In addition to the
risks and uncertainties set forth in Dynegy’s SEC filings, the
forward-looking statements described in this press release could be
affected by, among other things, (i) Dynegy’s ability to retire the
facility by mid-2016; (ii) Dynegy’s anticipated benefits associated
with the Wood River facility retirement (iii) expectations about
the outcome of regulatory, administrative and legislative matters;
(iv) the impacts on the scope and timing of any potential
negotiations or the outcome of any legal processes; (v) the effects
of, or changes to, MISO or PJM power and capacity procurement
processes; (vi) expectations and estimates regarding capital and
retirement expenditures; and (vii) Dynegy may be adversely affected
by other economic, business, and/or competitive factors. Any or all
of Dynegy’s forward-looking statements may turn out to be wrong.
They can be affected by inaccurate assumptions or by known or
unknown risks, uncertainties and other factors, many of which are
beyond Dynegy’s control.
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version on businesswire.com: http://www.businesswire.com/news/home/20151104006845/en/
Dynegy Inc.Media:Micah Hirschfield,
713.767.5800orAnalysts:Rodney McMahan, 713.507.6466
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