Dynegy Announces Illinois Generation Reliability Act
May 26 2016 - 8:15AM
Business Wire
- Moves Illinois into one reliable
competitive market.
- Relieves capacity shortage and premium
pricing in northern Illinois through generation supply from
existing and available plants in central and southern
Illinois.
- Ensures consistent reliability
throughout the state and eliminates unnecessary and inefficient
regional differences.
- Helps maintain jobs and economic
benefits of the generation fleet in southern and central
Illinois.
- Protects consumers against higher rates
caused by premature retirement of efficient generation and
subsequent shortage pricing, both which are being caused by the
poor market design in southern and central Illinois.
Dynegy Inc. (NYSE:DYN) today plans to file the Illinois
Generation Reliability Act that will provide economic benefits to
consumers and help Illinois preserve vital, high-paying power
generation jobs and the related economic benefits by moving the
state into a single competitive power market.
The ultimate goal of the Illinois Electric Generation
Reliability Act is to move all of Illinois, the ComEd and Ameren
service areas, into the PJM power market. Currently, Illinois is
divided into two separate power markets with northern Illinois
participating in the competitive PJM market while central and
southern Illinois are in MISO, a hybrid power market designed to
benefit traditional utilities in the surrounding states. Upon
integration of central and southern Illinois into PJM, the
long-term beneficiaries will be Illinois consumers and the state’s
economy.
Results from the most recent MISO and PJM capacity auctions
clearly illustrate the problem: capacity prices (the amount
generators are paid to be ready to run) in northern Illinois are
nearly three times that of southern Illinois due to less economic
plants in the north, while more cost effective plants in southern
Illinois sit idle, or shut down, as they don’t receive any
compensation to cover operating costs from MISO. Combining Illinois
into one power market will be beneficial to consumers and
businesses across the state by ensuring a consistent level of
reliability, capacity, and overall lower prices.
“The results from the PJM auction are a valuable and important
indication that combining all of Illinois into PJM through the
Illinois Electric Generation Reliability Act will be beneficial for
the entire state,” said Robert C. Flexon, president and CEO,
Dynegy. “Illinois legislators have a great opportunity to take
control of an issue that is debilitating communities across the
state while at the same time bring lower power prices to consumers
through a more efficient market design that can exist throughout
the state.”
Illinois legislators and labor leaders support the legislation
and offered the following comments.
Senate Majority Leader, James Clayborne (D –
Belleville.) -- “As the results of the most recent PJM and
MISO capacity auctions demonstrate, there is a huge gap between how
generators in northern Illinois and those in southern Illinois are
compensated. This is leading to the shutdown of generation in
southern Illinois, which is threatening electric reliability, jobs,
taxes and related economic development. This legislation is
designed to address this gap, level the playing field, and ensure
electric generation reliability, jobs, and the economy are
protected. We have heard from other energy policy stakeholders as
to their needs but we must ensure that any Illinois energy policy
is comprehensive and includes downstate Illinois.”
Steve Hughart IBEW 702 Business Manager -- "The bill protects
consumers from the high scarcity pricing that will result if out of
state utilities, that are already highly compensated through
utility commission approved rates in their home states, are allowed
to unfairly underbid into the Illinois market and force Illinois'
competitive generators to shut down plants. The IBEW stands ready
to work with the General Assembly, Dynegy, and other stakeholders
on this permanent solution and on an interim solution to protect
downstate generation, jobs, and reliability while we transition to
PJM.”
Matt Moore, IBEW 51 Business Manager -- “I urge the members of
the Illinois General Assembly to take up and pass this legislation
that would move southern Illinois into PJM and find an interim
solution to protect electric generation reliability statewide,
protect jobs, and economic impacts. Thousands of Illinois workers
are counting on you--the General Assembly--to protect our jobs. The
IBEW stands ready to work to pass energy legislation that will both
preserve our energy industry job base in Illinois as well as
position our great state to take advantage of future opportunities
for growth."
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.
In Illinois, Dynegy has 13 power stations serving more than
800,000 retail customers and employing nearly 1,400 people. We
generate over $2 billion in annual economic activity and power more
than 400 Illinois communities across 80 counties.
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 Dynegy’s beliefs and
assumptions about the Illinois power markets; its beliefs about
integration of central and southern Illinois into PJM; expectations
and state benefits of the proposed Illinois Electric Generation
Reliability Act; and anticipated responses from Illinois
legislators and labor leaders. These statements are based on the
current expectations of Dynegy’s management 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 Dynegy’s 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 2015 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 the following, among other
things, (i) ability of the proposed Act to move Illinois into a
single competitive power market; (ii) Dynegy’s anticipated benefits
associated with the proposed Act; (iii) expectations about the
outcome of regulatory, administrative and legislative matters; (iv)
the industry may be subject to future regulatory or legislative
actions, including environmental, that could adversely affect
Dynegy; and (v) 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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Dynegy Inc.Media:Micah Hirschfield,
713-767-5800orAnalysts:Rodney McMahan, 713-507-6466
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