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Strategies & Market Trends : IPPs and Merchant Energy Co.s
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To: NDBFREE who wrote (3019)12/29/2003 8:20:06 AM
From: NDBFREE  Read Replies (2) of 3358
 
MIRANT RELATED - From 1 of my online newsletters.
From my vantage point (I am not an investor in Mirant) nice to see bankrupcy may not allow one to break "bad" contracts while holding on to "good" contracts.

Pepco says court denies Mirant contract request
HOUSTON, Dec 26 (Reuters)
Pepco Holdings Inc. on Friday said a federal judge denied a request by bankrupt energy merchant Mirant Corp. to reject two power supply contracts.

Mirant has previously sought to have the contracts canceled by a bankruptcy court, but that move was opposed by Pepco and the Federal Energy Regulatory Commission and moved to a U.S. District Court.

The ruling, issued on Tuesday by the District Court in Fort Worth, Texas, denied injunctive relief sought by Mirant on the contracts. The court also ordered Mirant to show caused by January 5 why all injunctive relief granted by the bankruptcy court should not be dissolved, Pepco said.

Mirant was not immediately available for comment.

The dispute over the "back-to-back" contracts that require Mirant to reimburse Pepco's utility unit for the cost of electricity it buys from third party generators has pitted the bankruptcy court against the federal regulators in a jurisdictional battle.

The FERC has argued that it should decide on whether to keep the contracts in place using a "public good" methodology rather than the more narrow scope used by bankruptcy courts, which allow troubled companies to shed money-losing contracts.

Mirant, which generates and markets electricity in the deregulated power markets, filed for Chapter 11 bankruptcy protection in July in the biggest bankruptcy of 2003.
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