Dynegy, LS Power split will not slow Longleaf project

Contacted Dec. 14 about a news article stating Dynegy, Inc. was "reevaluating its role in developing new power plants," project manager Mike Vogt told the News "LS Power remains 100 percent committed to completing development of the Longleaf project, regardless of Dynegy's involvement."

Dynegy announced Friday it had entered into an agreement with LS Power to dissolve the two companies' development joint venture.

Contacted Monday about the dissolution, Vogt reaffirmed LS Power's commitment to completing the Longleaf power plant project in Early County.

"It will actually make the development of Longleaf, and other projects, easier," Vogt stated, noting Dynegy's desire to focus more on development at their existing power plants.

"The development of new generation is increasingly marked by barriers to entry including external credit and regulatory factors that make development much more uncertain," Dynegy stated in Friday's announcement. "Dynegy has elected to focus development and investment around our own portfolio where we control the option to develop and can manage the costs being incurred more closely."

"Some companies don't have the same patience for the permitting and development process as we do," Vogt stated. "Being a privately held company allows us to take a longer term view on difficult and complex projects like Longleaf."

Dynegy Inc. (NYSE:DYN) is a publicly traded company with a volatile history of merger, acquisition and liquidation of generation and other energy assets. LS Power is a privately owned, fully integrated development, investment and asset management group of companies.

"We are deeply excited about this victory, and are hopeful that LS Power will also see the bad business decision that the plant represents," said Bobby McLendon, President of Friends of the Chattahoochee, in a news release from Talking Heads Media Monday. "The financial risks and health repercussions from pollution are so great from the proposed Longleaf Plant, that it is not wise to build it."

In the news release, Talking Heads Media, speaking on behalf of a dozen or so environmental organizations, referred to Dynegy's announcement as a "death knell" for coalfired power plants, and called it "music to the ears of many organizations working for new, clean, smart energy."

In the meantime, all interested parties are awaiting a decision by the Court of Appeals — expected no later than July — of an appeal by Longleaf attorneys and the EPD of Fulton County Judge Thelma Wyatt Cummings Moore's June ruling which threw out Longleaf Energy's air permits issued by the EPD.

Vogt noted that work continues on several other critical elements important to the construction of the plant.

"Executing long term contracts to sell electricity from the plant, executing a cost competitive construction contract, and financing the construction cost of the plant are all critical elements," Vogt stated.

"We're hopeful we can complete these key items and begin construction by the end of 2009."