Generator

Firm in its rejection of unsolicited takeover moves by a fellow merchant power generator, Princeton, NJ-based NRG Energy, Inc. late last Monday asked Delaware’s Chancery Court to dismiss a complaint filed last month by Mirant Corp, the would-be acquirer of NRG. Mirant sued over NRG’s staunch rejection of its proposed buyout offer as being undervalued and offering a weak stock.

Bankrupt generator Calpine Corp. last Monday said it expects to record $5.5 billion in non-cash impairment charges for the twelve months ending Dec. 31, 2005. Also, the company expects to record additional noncash valuation allowances of $1.6 billion against deferred tax assets, which will be reflected in the tax provision for 2005.

Mirant Corp. and the Official Committee of Unsecured Creditors of the generator in its bankruptcy proceeding announced late Thursday that they have filed a lawsuit against Mirant’s former parent company, Southern Co., seeking recovery of at least $2 billion in connection with transfers made to Southern prior to Southern’s spin-off of Mirant in April 2001.

In his continuing quest to go after major wholesale power generator/marketers from the 2000-2001 crisis period, California Attorney General Bill Lockyer last Wednesday filed yet another lawsuit. This one was against bankrupt Mirant Corp, alleging wholesale electricity market manipulation.

Connecticut Attorney General Richard Blumenthal is investigating the actions of power suppliers during a recent bone-chilling freeze that blanketed the Northeast, saying he has information that some generators sold natural gas on the spot market that could have otherwise been used for their own power plants during the recent power supply crunch.

The Federal Energy Regulatory Commission on Thursday vacated a certificate that gave ANR Pipeline the green light to build a lateral extension to provide natural gas to a planned power generation plant in Wisconsin.

With power producers continuing to reel from depressed stock prices and, in many cases, overleveraged balance sheets, several companies are looking to shed hard assets in an effort to shore up their financial moorings. But the reality is that this is a “buyer’s market” for such assets, Raymond Niles, an analyst with Salomon Smith Barney, recently said. The pricing environment for sellers of generation-related assets is likely to get worse before it improves, he believes.

As work moved forward Tuesday on two new power sources to come on later this summer, the outlook in the immediate two months darkened with no apparent comprehensive solutions emerging from the state legislature.

While condemning the wholesale gas and power volatility thissummer and profit-hungry generator/marketers, San Diego-basedSempra Energy CEO Steve Baum painted a bright picture last Thursdayfor his company and utility consumers, noting that San Diego Gasand Electric customers are now paying on average less for theirelectricity than they did a year ago.