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| Type | Public (NYSE:DYN) |
|---|---|
| Founded | 1984 as Natural Gas Clearinghouse |
| Headquarters | Houston, Texas, USA |
| Area served | USA (14 states)[1] |
| Key people | Bruce A. Williamson, Chairman and CEO Stephen A. Furbacher, President and CFO[2] |
| Industry | Energy (Electrical power industry) |
| Products | Natural Gas (formerly, discontinued after
2005)[3] Electricity generation |
Dynegy Inc. (NYSE: DYN), based in Houston, Texas, United States, is a large owner and operator of power plants and a player in the natural gas liquids and coal business. The corporate headquarters are in Suite 5800 in the Wells Fargo Plaza at 1000 Louisiana Street in Downtown Houston.[4]
Once known as "The Natural Gas Clearinghouse," Dynegy adopted the "New Economy" branding in 1998, after which the company structured itself in a manner similar to Enron, launching several business ventures, including an online trading platform and broadband communications services, which could be misconstrued of those of its larger rival.
Dynegy has more coal plant proposals than any other company in the country.
Dynegy is proposing to build more coal-fired power plants than any other power company in the United States. Known in some regions of the U.S. as 'LS Power', Dynegy is currently proposing to build six new coal plants in the United States". The company was dubbed the "king of coal" by the National Environmental Trust.
Contents |
The Natural Gas Clearinghouse became better known by its later shortened name, NGC Corporation in the early 1990s, when it became a publicly traded company listed on the New York Stock Exchange. NGC was an integrated natural gas services company, paying a cash dividend to shareholders each year since 1994. By 1996 it had grown to US$550 million in assets, and carried US$525 million in long-term debt.[5]
In June 1998, Dynegy Inc. was created from the merger of its predecessor, NGC Corp., with Chevron Corporation's natural gas and natural gas liquids businesses.[6]
Dynegy adopted the more vibrant "New Economy" branding in 1998, and it became eerily similar to Enron, launching several business ventures that closely duplicated those of its larger rival, including an online trading platform and broadband communications services.
In a merger completed February 1, 2000, Illinova Corporation became a wholly-owned subsidiary of Dynegy Inc., a deal in which Chevron Corporation also took a 28% stake. Illinova, the utility holding company of Illinois Power Company, had grown to over US$415 million in assets and US$1.8 billion long-term debt.[5] As of the late 1980s, the IP utility company had operated almost entirely from coal plants, with less than 1% fueled from oil and gas.[7]
Dynegy, along with Enron, El Paso, Reliant and several other energy companies, was accused of price manipulation and other fraudulent practices during the California electricity crisis in 2000.
In 2001, the company made a white knight takeover bid for crosstown rival Enron, which was saddled with massive debts and whose stock had plummeted as investor confidence eroded. Dynegy pulled out at the last minute after Enron underwent an unexpected restatement of earnings which was later revealed to be a massive accounting fraud. Shortly after the pull-out, Enron filed for Chapter 11 bankruptcy and sued Dynegy unsuccessfully. One aspect of the takeover deal that did survive, however, was Dynegy's acquisition of the Northern Natural Gas Company pipeline, that was awarded to them in bankruptcy court in early 2002. NNGC was Enron's most lucrative pipeline asset and had been put up as collateral in return for Dynegy providing financing to Enron while merger talks had been underway.
Dynegy's energy trading and broadband businesses, similar to those that doomed Enron, caused Dynergy to lapse close to bankruptcy in late 2002. Amid accusations of accounting fraud and other misdoings, founder Charles Watson resigned. Dynegy was forced to sell the Northern Natural Gas pipeline to a consortium of investors led by noted billionaire Warren Buffett in return for a bailout. [8]
Following these incidents, the company hired Bruce Williamson, a former Duke Energy executive, who began a program of cost cutting, elimination of unprofitable businesses and financial restructuring which was successful in averting a bankruptcy filing. Williamson spent his first year leading successful bank refinancings and a capital restructuring plan that postponed major repayments of the company's debt. The company disposed of all of its businesses with the exception of its core merchant power and natural gas liquids businesses. Refocused on these core businesses, and managed with a strong emphasis on efficiency and cost control, Dynegy was able to stabilize its financial position. [9] While Williamson had helped the company's bottom line, his embrace of dirty coal has brought the company significant negative publicity.
In 2004, Dynegy sold the Illinois Power Company to Ameren Corporation (NYSE: AEE), the successor company of the IP Company's original partners from the 1952 Midwest Power Pool system.[10]
In late 2005, Dynegy continued its restructuring by selling its natural gas liquids business[11] to Targa Resources, a company owned by private equity firm Warburg Pincus.
In the first quarter of 2008, Dynegy lost $152 million (18 cents per share). In the most recent quarter (Q2, 2008), the company lost $272 million which contributed to a steep decline in the company's stock price.
The company is a member of Americans for Balanced Energy Choices an organization funded by the coal industry that touts the benefits of "clean coal". ABEC has been criticized as a front company for the coal industry and for greenwashing a dirty energy source.
 Wells Fargo Plaza, which contains the company's headquarters |
   | Dynegy corporate website - Dynegy > Home |
| | Targa is a youngster with a precocious streak - Targa is a youngster with a precocious streak | Chronicle 100 | Chron.com - Houston Chronicle |
| | DYN - NYSE, New York Stock Exchange > Listings > Listings Directory |
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