HOUSTON--(BUSINESS WIRE)--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."
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.
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.