Merchant generator woes threaten N.Y. power market
Friday October 18, 3:56 pm ET
NEW YORK, Oct 18 (Reuters) - A leading energy legislator in New York warned the shaky financial status of merchant generators threatens to undermine the state's power market and, if not addressed, could trigger a California-like crisis here.
"The reliability of the electric system may be compromised by the financial health of companies that are rated at junk bond levels," Assemblyman Paul Tonko (D-Schenectady and Montgomery Counties), Chairman of the Assembly Energy Committee, said in a statement issued late Thursday.
"A capital crisis has shattered the merchant generator industry and major companies are in danger of bankruptcy," he added.
The entire merchant energy sector has been wracked by the collapse of Enron Corp. (Other OTC:ENRNQ.PK - News), formerly the nation's biggest power trader, falling stock prices, reduced credit ratings and sharply lower wholesale power prices.
Officials at the New York Public Service Commission, which oversees the state's energy sector, noted the issues facing the merchant generators were a national problem.
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