Mirant: Chalk Point facility shutdown could prompt lost revenue

By Caroline Salls

Pittsburgh, Dec. 12 -Mirant Corp. said a forced outage at one of the generating units at its Chalk Point facility that resulted from a structural failure to one of its retired precipitators could prompt lost revenue and have a material adverse impact on the company's financial performance.

According to an 8-K filing with the Securities and Exchange Commission, the failure caused damage to ductwork and repairs that are in progress. The unit is expected to be out of service for at least four weeks.

Mirant said in the filing that, as a result of unplanned outages at some of the company's generation facilities, including an eight-week forced outage at Unit No. 1 in the company's Morgantown facility and the forced outage at the company's Chalk Point facility, together with the shut down and subsequent reduced operations of the Potomac River facility, the company's gross margin will be negatively impacted.

For the week of Jan. 6, the company said it expects to have an estimated collateral posting of $856 million, compared to $1.13 billion of collateral posted to counterparties as of Sept. 27.

Based on current gas prices, $270.9 million is expected to be released during the fourth quarter, $259.8 million is expected to be released during the first quarter of 2006, $105.3 million is expected to be released during the second quarter of 2006, $185.4 million is expected to be released during the third quarter of 2006, $74.1 million is expected to be released during the fourth quarter of 2006 and $231.3 million thereafter.

The filing said these amounts do not take into account collateral posted to counterparties to support price risk management activities after Sept. 30.

Mirant, an Atlanta-based power company, filed for bankruptcy on July 14, 2003 in the U.S. Bankruptcy Court for the Northern District of Texas. Its Chapter 11 case number is 03-46590.

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