Pepco Taking Immediate Legal Action to Prevent Mirant’s Unilateral Attempt to Abrogate Contractual Obligations
Thursday, December 09, 2004
Pepco today announced it will immediately take legal action to require Mirant Corp. to continue to make monthly payments to Pepco as required by contract. This followed Mirant’s Notice, filed today in the United States Bankruptcy Court, stating that it will unilaterally cease payments to Pepco. These payments are required as part of the agreement under which Mirant purchased Pepco’s generating assets in December 2000. Pepco is a subsidiary of Pepco Holdings, Inc. (NYSE: POM).
Since declaring bankruptcy in July 2003, Mirant has repeatedly and unsuccessfully attempted to obtain legal approval to terminate its contractual obligations to pay Pepco for the cost of electricity which Pepco provides to Mirant. Pepco is seeking immediate relief from this unilateral action and will take whatever additional actions are necessary to ensure Mirant is required to continue to perform under its contractual obligations.
“Mirant’s action cannot be supported legally” said Kirk J. Emge, Pepco General Counsel. “It is a breach of agreements approved by the Federal Energy Regulatory Commission. Clearly, Mirant is frustrated by its failure to obtain court approval to reject its contractual obligations, and we are outraged that it has now resorted to this desperate and illegal measure. We have a strong legal case to hold Mirant to its contractual obligations. We are taking all appropriate actions to protect our customers and shareholders and will seek full recovery of any losses caused by Mirant’s unilateral actions,” he added.
Contrary to prior representations made before the courts, Mirant is now taking the presumptuous step of acting without proper legal authority, especially in light of the fact that the issue was already pending before the appropriate legal body.
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About PHI: Pepco Holdings, Inc. is a diversified energy company with headquarters in Washington, D.C. Its principal operations consist of Pepco and Conectiv Power Delivery, which deliver 50,000 gigawatt-hours of power to more than 1.8 million customers in Washington, Delaware, Maryland, New Jersey and Virginia. PHI engages in regulated utility operations by delivering electricity and natural gas, and provides competitive energy and energy products and services to residential and commercial customers.
Forward-Looking Statements: Except for historical statements and discussions, the statements in this news release constitute "forward-looking statements" within the meaning of federal securities law. These statements contain management's beliefs based on information currently available to management and on various assumptions concerning future events. Forward-looking statements are not a guarantee of future performance or events. They are subject to a number of uncertainties and other factors, many of which are outside the company's control. Factors that could cause actual results to differ materially from those in the forward-looking statements herein include general economic, business and financing conditions; availability and cost of capital; changes in laws, regulations or regulatory policies; weather conditions; competition; governmental actions; and other presently unknown or unforeseen factors. These uncertainties and factors could cause actual results to differ materially from such statements. PHI disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This information is presented solely to provide additional information to further understand the results and prospects of PHI.
