SDG&E Resists Dynegy's Request to Shut Down Local Generating Units

Apr 12, 2001, 01:00 ET from San Diego Gas & Electric

    SAN DIEGO, April 12 /PRNewswire/ -- In a letter sent to Dynegy Power Corp.
 today, the president of San Diego Gas & Electric (SDG&E) said SDG&E will
 resist Dynegy's request to shut down 18 combustion-turbine generators that
 provide 267 megawatts (MW), enough to power more than 250,000 homes in the
 San Diego region.
     Steven Bergstrom, Dynegy's president and chief operating officer, notified
 Sempra Energy officials yesterday of the company's intention to cease
 operations of the combustion turbines and discontinue sales to the California
 Independent System Operator (Cal-ISO) when called to operate for state
 reliability.  They also threatened legal action against SDG&E if the utility
 refused to comply.  Bergstrom cited credit issues associated with the
 Cal-ISO's operations as the reason for Dynegy's actions.
     While Dynegy and NRG Energy jointly own the 18 combustion turbines and the
 951MW Cabrillo Power Plant in Carlsbad, Calif., SDG&E operates both the plant
 and the turbines under a contract signed when the generating facilities were
 sold to Dynegy and NRG in 1999.
     "Given the energy crisis currently gripping our state, we are appalled
 that you would even consider such an action," Debra L. Reed, president of
 SDG&E, wrote to Bergstrom in the letter.
     "Dynegy's request to shut down critically needed electric generation is in
 direct violation of orders by the Cal-ISO and puts thousands of Californians,
 including our customers, at risk for electric service interruptions," Reed
 said.  "We will not comply.  SDG&E is charged with keeping the lights on for
 our customers and we will do everything in our power to do so."
     Under the 1999 sales agreement that transferred ownership of the SDG&E
 plants to Cabrillo Power (Dynegy Corp. and NRG Energy), SDG&E is under
 contract to operate the Cabrillo Power Plant and the combustion turbines until
 May 22, 2001.
     Reed said that the sales agreement provides SDG&E with the legal authority
 to continue operating the generating units, if the Cal-ISO, the state's power
 command center, calls for such action.  Given the severe shortage of power in
 the state, the Cal-ISO has on numerous occasions directed Dynegy to operate
 the units.
 
     San Diego Gas & Electric is a regulated utility that provides service to
 3 million consumers through 1.2 million electric meters and 740,000 natural
 gas meters in San Diego and southern Orange counties.  SDG&E is a subsidiary
 of Sempra Energy (NYSE:   SRE), a Fortune 500 energy services holding company
 based in San Diego.
 
 

SOURCE San Diego Gas & Electric
    SAN DIEGO, April 12 /PRNewswire/ -- In a letter sent to Dynegy Power Corp.
 today, the president of San Diego Gas & Electric (SDG&E) said SDG&E will
 resist Dynegy's request to shut down 18 combustion-turbine generators that
 provide 267 megawatts (MW), enough to power more than 250,000 homes in the
 San Diego region.
     Steven Bergstrom, Dynegy's president and chief operating officer, notified
 Sempra Energy officials yesterday of the company's intention to cease
 operations of the combustion turbines and discontinue sales to the California
 Independent System Operator (Cal-ISO) when called to operate for state
 reliability.  They also threatened legal action against SDG&E if the utility
 refused to comply.  Bergstrom cited credit issues associated with the
 Cal-ISO's operations as the reason for Dynegy's actions.
     While Dynegy and NRG Energy jointly own the 18 combustion turbines and the
 951MW Cabrillo Power Plant in Carlsbad, Calif., SDG&E operates both the plant
 and the turbines under a contract signed when the generating facilities were
 sold to Dynegy and NRG in 1999.
     "Given the energy crisis currently gripping our state, we are appalled
 that you would even consider such an action," Debra L. Reed, president of
 SDG&E, wrote to Bergstrom in the letter.
     "Dynegy's request to shut down critically needed electric generation is in
 direct violation of orders by the Cal-ISO and puts thousands of Californians,
 including our customers, at risk for electric service interruptions," Reed
 said.  "We will not comply.  SDG&E is charged with keeping the lights on for
 our customers and we will do everything in our power to do so."
     Under the 1999 sales agreement that transferred ownership of the SDG&E
 plants to Cabrillo Power (Dynegy Corp. and NRG Energy), SDG&E is under
 contract to operate the Cabrillo Power Plant and the combustion turbines until
 May 22, 2001.
     Reed said that the sales agreement provides SDG&E with the legal authority
 to continue operating the generating units, if the Cal-ISO, the state's power
 command center, calls for such action.  Given the severe shortage of power in
 the state, the Cal-ISO has on numerous occasions directed Dynegy to operate
 the units.
 
     San Diego Gas & Electric is a regulated utility that provides service to
 3 million consumers through 1.2 million electric meters and 740,000 natural
 gas meters in San Diego and southern Orange counties.  SDG&E is a subsidiary
 of Sempra Energy (NYSE:   SRE), a Fortune 500 energy services holding company
 based in San Diego.
 
 SOURCE  San Diego Gas & Electric