Dynegy out of the new coal business
This is the weekly post from Bruce Nilles, director of Sierra Club’s Beyond Coal Campaign.
Three years ago Dynegy launched plans to partner with LS Power and become the largest new developer of coal-fired power plants. Yesterday Dynegy officially terminated those plans, including selling its shares in a coal-fired power plant currently under construction
Coal is again proving to be a bad investment. Dynegy announced yesterday that the company is essentially going to lose $100 million as it sells its portion of the Texas Sandy Creek coal plant back to LS Power. But they decided a $100 million loss was better than continuing to be involved in the expensive and risky project.
Dynegy is still trying to sell their stake in the Arkansas Plum Point coal plant, also under construction. There have been no takers so far, which most likely means more losses to come.
Dynegy and LS Power’s joint venture, launched in the fall of 2006, was supposed to build at least seven new coal plants. But in February 2008, Sierra Club responded with what would become our most successful national grassroots and corporate accountability campaign to date. We focused on the six states where Dynegy proposed their coal plants—AR, IA, GA, MI, NV and TX.
The campaign included a national letter-writing and email campaign to their CEO; and a website specifically targeting Dynegy. We coordinated our efforts with several partner organizations. In addition to thousands of letters, emails, and phone calls, we organized numerous local protests in the states, including a major rally with a broad coalition outside of Dynegy’s annual shareholder meeting in Houston. We also met with Dynegy’s CEO twice—once in their Washington, D.C. lawyers’ offices and once in Sierra Club’s Chicago office.
Although two of the plants had already started construction, Dynegy’s CEO soon admitted that new coal plants were uneconomic. And in January 2009 Dynegy announced that they were pulling out of the joint venture, a move which was finally closed yesterday. Dynegy is now out of building new coal plants, and LS Power can’t find anybody to purchase power from their last proposed coal plant in Georgia.
We know that the once-unabashed coal booster Dynegy is now out of the dirty new coal business – and the financial struggles show how bad a choice coal is. Let’s hope companies still supporting coal see the light from this (We’re looking at you, Blackstone Group).