Members of the Sierra Club and Environmental Law and Policy Center say an independent report proves the subsidiary that will run the plants does not have the capital to operate them or to install pollution controls. They say there’s risk communities will be responsible for the environmental clean-up costs if Dynegy ever declares bankruptcy.
David Johnson is the author of the report. He says using the subsidiary to operate the plants independent of the parent company is designed to protect company shareholders.
"Dynegy wins if the newly acquired coal-operating plants do produce profits, but if they do not and if those assets are no longer able to support their large debt and they have to file bankruptcy as I believe they will, Dynegy will suffer no ill effects. It's a heads they win, tails they win situation."
Dynegy is expected to purchase Ameren’s coal plants at no cost, but will inherit the debt of the facilities. The Illinois Pollution Control Board is holding a hearing on Dynegy’s variance request Tuesday in Springfield.