Damage control!! That article puzzled me because it was so "out of whack" with what is happening out there. Here is the other side of the story and IMHO SDG&E now has egg on their face. Someone at SDG&E should lose their job over this one, probably Debra Reed. Dynegy was clearly within their rights and SDG&E wasn't.
biz.yahoo.com
Letter From Dynegy President and COO Steve Bergstrom to San Diego Gas & Electric Chairman Stephen Baum
HOUSTON--(BUSINESS WIRE)--April 12, 2001--Following is the full-text (not excerpted) version of a letter sent today to San Diego Gas & Electric (SDG&E) by Dynegy Inc. President and Chief Operating Officer Stephen W. Bergstrom:
Mr. Stephen Baum
Chairman and CEO
San Diego Gas & Electric
8330 Century Park Court
San Diego, CA 92123-1530
Dear Steve:
I am disappointed by the letter I just received from San Diego Gas
& Electric ("SDG&E") President Debra Reed. That letter seriously
mischaracterizes the conversation you and I had yesterday. It also
incorrectly references language from a letter Dynegy sent to SDG&E
today. To make matters worse, SDG&E simultaneously issued a news
release selectively quoting from Ms. Reed's letter before I even had
an opportunity to read it.
First, contrary to the assertion in Ms. Reed's letter, Dynegy
Power Marketing Inc. (as scheduling coordinator for Cabrillo II LLC,
"Dynegy") has not asked SDG&E to ignore lawful ISO orders. As you
know, last week, both the U.S. Court of Appeals for the 9th Circuit
and the Federal Energy Regulatory Commission clarified, in no
uncertain terms, that the ISO may not compel generators to provide
energy to the ISO unless the ISO can provide a creditworthy buyer.
After requesting, and not receiving, credit assurances from the ISO,
and in accordance with the FERC order, Dynegy has restricted sales
through the ISO to transactions which involve a creditworthy
purchaser. The ISO cannot lawfully compel Dynegy or any other market
participant to sell without providing a creditworthy buyer.
Second, Dynegy did not instruct SDG&E to shut down generating
units, nor did we suggest that we would not make power available to
creditworthy buyers. It has always been Dynegy's practice to make the
output of its California generation facilities available for sale to
meet the State's electricity needs. In fact, last month, Dynegy
executed a long-term agreement with the California Department of Water
Resources to sell up to 2,300 MW of electricity (substantially all of
West Coast Power's(a) generating capacity) to California over the next
three-and-a-half years. Contrary to your press release, the full
output of the Cabrillo units is available to any creditworthy buyer,
including SDG&E. We have reaffirmed this point with both the ISO and
the California Department of Water Resources.
Finally, I will gladly discuss any concerns that you may have. We
continue to believe the best way to address California's energy
situation is to resist the urge to sensationalize normal business
proceedings. Such actions only serve to generate unnecessary
controversy and misinterpretation, and thwart the efforts of all
parties to work together to ensure the State's long-term energy needs
are met.
Cordially,
Stephen W. Bergstrom
President and Chief Operating Officer |
