Dynegy Shutters Illinois Coal-Fired Power Plants

Researched by Industrial Info Resources (Sugar Land, Texas)--Dynegy Midwest Generation (Collinsville, Illinois), a subsidiary of Dynegy Incorporated (NYSE:DYN) (Houston, Texas), recently announced plans to close several Illinois coal-fired power plants before the end of the year. Several generating units at the Baldwin and Newton power stations located in Illinois would shut down due to the inability to recover operating costs in the most recent Midcontinent Independent System Operator (MISO) (Carmel, Indiana) forward capacity auction. The closures will affect about 122 jobs at the generating plants with another 4,000 indirect job losses in companies that support the facilities.

Dynegy requested that MISO remove 1,835 megawatts (MW) of generation from MISO Zone 4, which encompasses the southern two thirds of Illinois, while also announcing that an additional 500 MW of generation would be shut down by the end of this year with a final determination at that time. The request by Dynegy means that additional generating plants could close in the next few years and power plant job layoffs could accelerate.

Competitive generating assets in MISO Zone 4, regardless of fuel type, are unable to support their operating costs in the existing market and cannot be operated at a profit.

Dynegy and Exelon Corporation (NYSE:EXC) (Chicago, Illinois), two of Illinois' largest power producers, recently offered separate proposals to modify the MISO forward capacity auction in order to send a clear price signal, further reliability and boost investment in new and existing power plants in the region.

Exelon also announced that it would close its Clinton and Quad Cities nuclear plants, both located in Illinois, if the state representatives would not pass legislation that would give the company adequate funding and support.

Last year Dynegy announced that the Wood River power plant located near Alton, Illinois, would be closed by June with a loss of about 90 employees and 465 MW of electrical generation, siting similar constraints.

Several older generating plants owned by Dynegy in Illinois could also be affected due to age and inefficiencies, such as the Hennepin power station with units as old as 1953 and the Joppa power station with units constructed in 1953 and 1955.

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