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December 13, 2000    

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Dynegy CEO: Still Supplying Power To Calif ISO

NEW YORK -- Dynegy Inc. (DYN) continues to supply the California electricity 
grid with power - despite some concerns that it won't be paid for the 
supplies, Dynegy chairman Stephen Bergstrom told Dow Jones Newswires 
Wednesday.

The California Independent System Operator said Wednesday that it was on the 
verge of rolling blackouts because about 12 suppliers had stopped selling 
power to the grid operator due to qualms about the credit of the ISO and the 
state's utilities.

Among traders, Dynegy's name quickly came up as one of the companies not 
selling to the ISO, but Bergstrom said that isn't the case.

"We continue to provide all the power that the ISO asks for. We did send a 
letter Friday to the ISO and the Power Exchange asking for assurance of 
payment for the power we're producing. And in the last 24 hours, we've gotten 
more comfortable about that assurance," Bergstrom said.

"We never once said, 'If you don't do this, we're shutting down,"' he added.

Dynegy - which operates about 2,500 megawatts of generating stations in 
California, or about 5% of the state's capacity - "didn't threaten in any way 
to not sell power," Bergstrom said, adding nor could it due to a federal 
order Friday.

But out-of-state suppliers that have decided not to supply the ISO are making 
prudent, normal business decisions, according to Bergstrom.

"PG&E and Edison International have said they may go bankrupt. Out-of-state 
suppliers probably aren't selling unless there's credit protection. You have 
a fiduciary responsibility to your shareholders to get assurance that you're 
going to get paid," he said.

"We're giving all they ask, and we have done so all along. I think that's the 
case for most of the in-state generators," said Bergstrom.

For Dynegy, such assurance for ISO purchases would have to come from some 
other entity than California's investor-owned utilities, whose credit is no 
longer dependable, Bergstrom said. But he wouldn't say what entity had made 
him feel more comfortable that Dynegy will be paid.

-By Mark Golden, Dow Jones Newswires; 201-938-4604; mark.golden@dowjones.com


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