Foresight Energy’s proposal to finance Ameren Energy Resource’s Newton scrubber through a surcharge on Foresight’s Illinois basin high sulfur coal is not operationally and economically feasible. Dynegy’s analysis of the Ameren Energy Resources assets included evaluating the use of Illinois Basin coal and the company concluded it was not a viable alternative from a commercial, operating, and financial perspective. Today, more than $250 million has been spent on the construction of the Newton scrubber and the engineering and design work did not contemplate the use of high-sulfur Illinois coal. Modifying scrubber designs at this late juncture materially escalates the engineering and construction costs to complete the scrubber project and likely extends the timetable to achieve the commercial operating startup date.
Additionally, there are several other material factors that result in this not being a viable alternative. For example, the facilities to which Foresight proposes to provide Illinois coal have existing long-term multiyear rail agreements and coal supply contracts in place for cleaner burning low-sulfur coal which cannot be terminated without significant financial penalties. Small scale operating tests of this Illinois basin coal, performed earlier this year, were unsuccessful and resulted in costly equipment repairs. Accordingly, the Foresight Energy proposal completely lacks merit and is absolutely not a viable alternative.
Dynegy's subsidiaries produce and sell electric energy, capacity and ancillary services in key U.S. markets. The Dynegy Power, LLC power generation portfolio consists of approximately 6,771 megawatts of primarily natural gas-fired intermediate and peaking power generation facilities. The Dynegy Midwest Generation, LLC portfolio consists of approximately 2,980 megawatts of primarily coal-fired baseload power plants.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 belief the Foresight Energy proposal is not operationally and economically feasible; Dynegy’s analysis and conclusion of the Ameren Energy Resources assets; escalation of engineering and construction costs and timetable to achieve commercial operating startup date; termination of existing long-term, multiyear rail agreements and coal supply contracts without financial penalties; and Dynegy’s belief that the Foresight Energy Proposal lacks merit and not a viable alternative. 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 2012 Form 10-K and the 10-Q for the quarterly period ended March 31, 2013. 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) conditions to the closing of the transaction may not be satisfied; (ii) Dynegy may be unable to obtain regulatory approvals required for the transaction or required regulatory approvals may delay the transaction or result in the imposition of conditions that could have a material adverse effect on Dynegy or cause Dynegy to abandon the transaction; (iii) the business of Dynegy may suffer as a result of uncertainty surrounding the transaction; (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.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts