PSI Energy has filed an application at the Indiana Utility Regulatory Commission (IURC) for a generic certificate of need that would allow the Cinergy subsidiary to purchase unidentified generating assets “within certain approved parameters,” a PSI spokesperson told NGI last Tuesday.
Such purchases would only be made if the relevant assets “became available at attractive prices and if they were compatible with what our needs are,” said Angeline Protogere, a PSI spokesperson.
Protogere said that the filing was made at the IURC for several reasons. “We have a significant need for capacity in order to maintain [an] adequate level of reserves,” she said. “Our current capacity need [on the PSI system] is about over 300 MW and it’s growing each year.”
In addition, the spokesperson said that this is a “unique time” in the energy industry that creates some “unique opportunities.” The wholesale merchant business “is in the throws of a financial and a credit crisis,” Protogere noted. “A number of merchant generators have lost tremendous stock value, you’ve had credit downgrades [and] a few have filed for bankruptcy.” She said that “it’s possible that these circumstances may lead to a sale of generating assets at attractive prices.”
Moreover, if an attractive price presents an opportunity for PSI “that fits our need, we want to be in a position to capitalize on that,” Protogere went on to say. Indiana’s certificate of need process “is a lengthy process. It’s usually about 12 months start to finish and it’s highly unlikely that a financially stressed seller would or could wait almost a year to finalize a sale.”
NRG Energy, PG&E National Energy Group and Mirant Corp. have all filed for bankruptcy protection in recent months.
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