DYNEGY

'Dynegy Inc.' (), based in Houston, Texas, is a large owner and operator of power plants and a player in the natural gas liquids business.
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 closely duplicated those of its larger rival.

Contents

History

References

External links

History

The Natural Gas Clearinghouse became better known by its later shortened name, 'NGC Corporation' (formerly ) 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.^[4]
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.^[5]
In a merger completed February 1, 2000, Illinova Corporation (formerly ) 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 become an S&P Midcap 400 stock by 1996, with over US$415 million in assets and US$1.8 billion long-term debt. 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.^[6]
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 an unsuccessful takeover bid for Enron, pulling out at the last minute following an unexpected restatement of earnings by Enron. Shortly after the pull-out, Enron filed for Chapter 11 and sued Dynegy. One aspect of the takeover deal that did survive, however, was Dynegy's acquisition of the Northern Natural Gas Company pipeline, Enron's most lucrative pipeline asset.
Unfortunately for Dynegy's shareholders and employees, these events did nothing to prevent Dynegy itself from lapsing into a crisis similar to that of Enron in late 2002. Amid accusations of accounting fraud and other misdoings, founder Charles Watson resigned, and the company was forced to sell the Northern Natural Gas pipeline to a consortium of investors led by noted billionaire Warren Buffett.
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. 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.
In 2004, Dynegy sold the Illinois Power Company to Ameren Corporation (), the successor company of the IP Company's original partners from the 1952 Midwest Power Pool system.^[7]
In late 2005, Dynegy continued its restructuring by selling its natural gas liquids business^[8] to Targa Resources, a company owned by private equity firm Warburg Pincus.

References

1. Dynegy Leadership, Dynegy Website.
2. About Dynegy/ Dynegy Website.
3. "Dynegy > History", Dynegy Website
4. Standard & Poor's Stock Guide, April 1996
5. CHEVRON CORP. APPLAUDS DYNEGY-ILLINOVA MERGER, Chevron Press Release Archives, Feb. 2, 2000
6. Standard & Poor's Stock Guide, December 1987
7. Ameren Corporation, About Us
8. Targa is a youngster with a precocious streak

External links

★ Dynegy corporate website