Renewable Energy Shift Weighs Heavily on Dynegy and PPL Corporation
November 10, 2011 08:16 ET
Renewable Energy Shift Weighs Heavily on Dynegy and PPL Corporation
The Bedford Report Provides Equity Research on Dynegy & PPL Corporation
NEW YORK, NY--(Marketwire - Nov 10, 2011) - Several companies in the Electric Utilities sector have struggled this year. Companies, such as Dynegy, have power plants that run on comparatively pricey coal and have had a hard time competing with producers whose plants run on relatively cheap natural gas. The Bedford Report examines investing opportunities in the Electric Utilities Industry and provides equity research on Dynegy, Inc. (
[ www.bedfordreport.com/DYN ]
[ www.bedfordreport.com/PPL ]
Companies in the Electric Utilities sector are finally being forced to confront some harsh regulations that will undoubtedly change their operating environments. Utilities are now mandated to derive a certain percentage of their electricity output from renewable sources. Multiple utilities have said they will have to retire thousands of megawatts of coal-fired units to comply with EPA's rules. After twenty years of fighting against the Clean Air Act, many companies are finally facing deadlines that will require them to either shut down or improve emissions from their coal fired production facilities.
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The rules have been criticized by many big coal-burning US utilities and a few Republican presidential candidates. They have also fractured the US power industry and made it difficult to present a united front. Utilities are arguing that this will result in lost jobs, higher rates and less capacity during peak usage times. One of the few Electric Utilities companies to defend the new rules is Exelon Corp. Exelon shifted the environmental discussion in its latest Exelon 2020 report, saying that well-functioning wholesale power markets can help achieve cleaner air goals at a lower cost.
The struggling Dynegy Corp, which has many power plants that run on comparatively pricey coal, has had a hard time competing with producers whose plants run on relatively cheap natural gas. Despite its struggles, Dynegy shares skyrocketed this week after the company engineered an unusual bankruptcy filing that could leave shareholders in much better shape than bondholders. The bankruptcy of only part of Dynegy, called Dynegy Holdings, aims to lower Dynegy's debt and enable it to break some pricey leases on two power plants without dragging parent Dynegy Inc, and its shareholders, through bankruptcy.
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