Dynegy’s President Steve Bergstrom told analysts in New York Thursday that there’s a higher likelihood now for an energy market expansion rather than a consolidation. Speaking at UBS Warburg’s Global Energy and Utilities Conference, Bergstrom said the massive 25% market share of Enron currently is being dispersed among other existing energy players, but there’s room for more big players in this growing market.

“There’s a lot of market share that they had that is now being disseminated throughout the industry,” he said. “I really don’t see a whole lot of consolidation ahead, at least for the big guys. Where I think consolidation might come in is with the smaller undercapitalized guys who frankly haven’t been able to play in a big way without a balance sheet and today will not be able to play at all. That’s more of a vertical consolidation than a horizontal one.”

Bergstrom and other merchant energy executives speaking on a panel later in the day berated analysts for pushing energy companies in the past to fit the mold of certain companies, particularly Enron. Bergstrom said he was concerned that so many are now on the lookout for the next Enron to fall.

“I had three questions from people this morning asking who will be the next company to go bankrupt,” he said. “Why is everyone looking for who the next guy is that will go bankrupt? This is a good business that just lost a player with 25% market share.” He said he was frustrated that some analysts are saying that 25% market share has somehow vanished. “The guys that are left are going to do very well. They are going to keep executing and are going to do great.”

Bergstrom believes there needs to be a change on Wall Street where analysts have been too concerned about strategic innovations, such as Enron’s flawed idea of forming an energy giant without any assets. “You guys are going to have to get comfortable long term. The energy business is not something you can start and stop and change your strategy on quarterly. This is long-term capital investment, long-term business. You have to believe in the fundamentals of energy.”

He said energy companies have to “get back to basics,” and analysts have to expect them to. “Hopefully we’ll get back to where we were. The energy business is solid.”

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