The big news last week in the utility universe was that Illinois passed an energy bill. (See here) Issues in Illinois have been in the news for quite a while, and I discussed some of these in my article on the entelligent website in July. At that time legislation was stalled and it looked like nothing would happen from that end. Companies were more focused on making changes to MISO capacity auction to try to save these plants.
The big winner from this legislation was obviously Exelon, but the big loser is probably Dynegy. Dynegy’s stock price closed at $9.35 at the beginning of the week, but by the end of Friday, after the legislation passed, Dynegy’s stock had fallen to $7.74. There has been some price recovery since then, but DYN has far from fully recovered. Some earlier versions of the bill would have supported DYN’s plants in southern Illinois as well as Exelon’s nukes. The passed version now takes away the potential support for DYN while subsidizing competitors. This doesn’t mean Dynegy’s Illinois plants are doomed, but it does make things more difficult.