groups say they are even more wary of the pending, no-cash sale of five
Illinois coal-fired power plants from St. Louis-based Ameren Corp. to
Dynegy, a Texas-based energy company, now that a new financial analysis
has shed more light on the proposed deal.
According to a report
issued Thursday by ACM Partners, an independent financial analyst, Dynegy
is preparing for the high-risk purchase by creating an unfunded shell
company, Illinois Power Holdings, to operate the five central and
southern Illinois coal-fired power plants. The plants are located in
Bartonville, Canton, Coffeen, Joppa and Newton.
financial analyst and the report's author, said the findings show that
Dynegy is purposefully using a shell company for shareholder gain and to
minimize any financial hardship for itself. Essentially, the company is
taking "a cost-free gamble that energy prices will rise," Johnson said.
analysis also found that Illinois Power Holdings won't have the proper
capital in order to install coal-pollution controls at the plants,
conduct daily maintenance or make regular repairs, among other
It’s also likely that the Dynegy subsidiary will
eventually declare bankruptcy, Johnson noted. And if it does, there's a
risk that workers’ pensions would be left unfunded and local communities
would have to pick up the tab for environmental cleanup costs. The
company, however, would suffer no “ill effects.”