Dynegy Quits Price Standards Committee

Dynegy Inc., a Houston-based power producer, quit an industry committee formed last year to set standards for energy prices, damaging the group’s effort to build confidence in trading after charges of market manipulation.

Dynegy notified the Committee of Chief Risk Officers on Monday that it was withdrawing, spokesman John Sousa said. The company also sent a letter to trade publications that compile the indexes, saying it has no plans to resume reporting power, natural gas or natural gas liquids trades. Energy indexes are used to set prices for many fuel contracts.

Voluntary reporting “didn’t work properly,” Chief Executive Bruce Williamson said at Dynegy’s shareholder meeting in Houston last week. “We need a system backed by some regulatory oversight.”

Traders for Dynegy and El Paso Corp. have been indicted for allegedly reporting bogus prices to industry publications. Regulators say false trades may have inflated costs for consumers by boosting index figures.

The risk officers committee, formed last year, said in February that trading firms should provide the names of buyers and sellers to publishers to help them check the accuracy of the data. The group also said traders should not be directly involved in the submission of prices and that it should be possible to audit index data. Members of the committee include Duke Energy Corp., American Electric Power Co. and NiSource Inc.

Michael Smith, executive director of the committee, didn’t return a call seeking comment.