Dynegy’s Morro Bay power generation facility continues to provide
Californians with safe, reliable and environmentally compliant
electricity. Until recently, output from the facility was under contract
to a local utility. That contract was cancelled in mid-May and the
cancellation will likely result in a shift of earnings and cash flows
between periods. Dynegy is actively seeking other commercial
arrangements for the facility and has been offering the facility’s
output in the day-ahead market administered by the California
Independent System Operator since May 19, 2012. Dynegy will continue to
respond to requests for offers from California utilities seeking to
procure electric capacity needed to serve their customers. While Dynegy
has been successful in winning contracts through this resource adequacy
process in the past, Dynegy believes that a more forward-looking,
transparent, market-based solution to securing electric supply would
benefit consumers, utilities and independent generators. Dynegy has no
plans to retire the facility at this time, and as long as the plant is
economically viable, Dynegy will continue to operate it.
The Morro Bay Power plant is located at 1290 Embarcadero Road, just east
of Coleman Park.
This press release contains statements reflecting assumptions,
expectations, projections, predictions, intentions or beliefs about
future events that are intended as "forward-looking statements,"
particularly those statements concerning Dynegy’s ability to provide
safe, reliable and environmentally compliant electricity; the timing of
any closure or retirement of the Morro Bay facility, if at all; the
costs associated with the once-through-cooling regulations; Dynegy’s
ability to seek alternative commercial arrangements on terms favorable
to Dynegy and its ability to win contracts through the resource adequacy
process. Discussion of risks and uncertainties that could cause actual
results to differ materially from current projections, predictions,
beliefs and expectations of Dynegy is contained in Dynegy's filings with
the Securities and Exchange Commission. Specifically, Dynegy makes
reference to, and incorporates herein by reference, the section entitled
"Risk Factors" in its most recent Form 10-K, as amended, and subsequent
reports on Form 10-Q. 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, including: (i) expectations regarding
environmental matters, including costs of compliance, and the impact of
ongoing proceedings and potential regulations or changes to current
regulations, including those relating to climate change, air emissions,
cooling water intake structures, and other laws and regulations to which
Dynegy is, or could become, subject; (ii) beliefs, assumptions and
projections regarding the demand for power, generation volumes and
commodity pricing, including natural gas prices and the impact on such
prices from shale gas proliferation and the timing of a recovery in
natural gas prices, if any; (iii) sufficiency of, access to and costs
associated with natural gas inventories and transportation thereof;
(iv) beliefs and assumptions about market competition, generation
capacity and regional supply and demand characteristics of the wholesale
power generation market, including the anticipation of higher market
pricing over the longer term; (v) the effectiveness of Dynegy's
strategies to capture opportunities presented by changes in commodity
prices and to manage its exposure to energy price volatility;
(vi) beliefs and assumptions about weather and general economic
conditions; (vii) projected operating or financial results, including
anticipated cash flows from operations, revenues and profitability,
Dynegy's focus on safety and its ability to efficiently operate its
assets so as to capture revenue generating opportunities and operating
margins; (viii) beliefs about the outcome of legal, regulatory,
administrative and legislative matters; and (ix) expectations regarding
performance standards and estimates regarding capital and maintenance
expenditures.
