JEA Board Approves Transaction with FPL to Close 848-MW Coal Unit in Georgia

LCG, June 30, 2020--The JEA Board of Directors in a special meeting last Friday unanimously approved a transaction that will result in closing an 848-MW unit at Plant Scherer and entering into a 20-year purchase power agreement (PPA) with Florida Power & Light Company (FPL).

Read more

Analysis of Resource Adequacy in ERCOT - July - December 2020

LCG, June 30, 2020 - LCG Consulting just released its analysis of ERCOT for the second half of 2020, July through December.

Read more

Industry News

Enron Folds as Dynegy Backs Out of Buyout;Stock of Once-Mighty Firm Trades at 35 Cents

LCG, Nov. 29, 2001--Enron Corp., not long ago number 7 on Fortune Magazine's list of the 500 largest U.S. corporations, collapsed yesterday after Dynegy Inc. backed out of a deal to buy it. Today, Enron's stock traded as low as 35 cents a share.

Dynegy had agreed on November 9 to purchase Enron in an $8.4 billion stock swap, but after Enron shares closed at 61 cents yesterday, the company's market capitalization was only about $342 million.

As part of the November 9 deal, Dynegy had given Enron a $1.5 billion transfusion in exchange for preferred stock in Enron's Northern Natural Gas pipeline. That stock can be converted into ownership of the pipeline and Dynegy said yesterday it would exercise the option to acquire the asset.

Enron's collapse has devastated investors, including some big mutual funds, who were sitting pretty when shares traded at $90 a little over a year ago. Also in doubt are the futures of about 21,000 employees, including those of the company's utility subsidiary Portland General Electric Co. in Oregon.

Among the dozens of lawsuits facing Enron is one on behalf of PGE employees who were encouraged by Enron to switch their retirement investments into Enron stock a year ago. One lineman who has been climbing poles for PGE for 35 years said his retirement fund had shrunk from $400,000 to almost nothing and he would have to continue climbing poles until he dropped.

According to federal officials, the damage is likely to be confined to Enron and some of the banks and other firms with which it does business. The Treasury Department, the Federal Reserve and the Federal Energy Regulatory Commission said they had monitored Enron's rapid decline and saw no dangerous domino effect.

"The markets are functioning normally," said Peter Bakstansky, a spokesman for the Federal Reserve Bank of New York.

Since Dynegy and Enron announced their deal three weeks ago, revelation after revelation damaged Enron's credibility and its financial condition. Yesterday, Standard & Poor's downgraded Enron's debt to junk, accelerating up to $3.9 billion in debt payments.

That's when Dynegy Chairman Chuck Watson knew the deal was over. "We knew when to say no, and this morning, we said no," he said.

Enron's chief financial officer, Jeff McMahon, said that the company was still talking to banks about restructuring the company's debt, but not rule out seeking protection under Chapter 11 of the U.S. Bankruptcy Law.

"We are looking at every option under the sun, as you can imagine," McMahon said, adding that involuntary bankruptcy under Chapter 7, which would mean liquidation of the company, "is not an option we are pursuing."

At 12:30 p.m. EST, Enron shares were trading at 41 cents.

"Sometimes a company's best deals are the very ones they did not do," Watson said.

Copyright © 2020 LCG Consulting. All rights reserved. Terms and Copyright
Generator X
Generation and Transmission Planning and Optimization
The Locational Marginal Price Model (LMP) Network Power Model
Day Ahead and Real Time Market Simulation
Day-ahead and real-time portfolio revenue optimization
The Gas Procurement and Competitive Analysis System
Database of Plants, Loads, Assets, Transmission...
Daily LMP Forecast for ERCOT
Annual summary of prices, congestion and important events in ERCOT
CAISO CRR Auctions
Monthly Price and Congestion Forecasting Service