Dynegy Inc. will eventually exit California’s market and focus on investing into New England and the mid-Atlantic states.
In an interview with Bloomberg, Robert Flexon, chief executive officer (CEO) of Dyngey said the company was making the decision because the ISO New England and PJM Interconnection (PJM) power markets are friendlier to producers. Flexon added that the power markets also do a better job of compensating generators.
The solar energy boom in California has only driven power prices down, while generators in the state have complained that fossil-fired power plants struggle to make a profit because of the state’s market design.
The Houston-based power producer has a portfolio including natural gas and coal-fired power plants, making it difficult to profit in California after Gov. Jerry Brown set a goal of getting half of the state’s power from wind and solar by 2030. Flexon said the company would rather further invest in clean technologies in its existing fleet.
“I will minimize any investment possible in the state of California because the business environment there is so hostile to generators that it’s not worth putting money into California,” Flexon said. He said Dynegy’s investments are “going to be in markets that have the best market design, that’s ISO New England and PJM.”
Dynegy shares have ranged from $26.06 to $34.76 over the past year. However, Flexon hopes PJM’s wholesale auction for power capacity should provide generators with an increase in revenue.
The company has no plans to build a renewable energy facility anytime soon, he said.
Currently, Dynegy has about 2,500-MW of generation in California; 4,000-MW in New England; 7,000-MW in the Midcontinent Independent System Operator Inc. (MISO) network; and 12,000-MW in PJM.
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