Reports lead electric utility to reveal deal for 3rd coal-fired plant(Update)

Santo Domingo.- TheState-owned Electric Utility (CDEEE) on Monday said it annulled the agreement signedin 2013 with the company Pinegy Commercial Group to buy energy from a 600 MW coal-firedplant which the firm promised to build.

The revelation comes just 13 hours after the Boston Globe reported that Alpha Natural Resources Inc. and Arch Coal two of the US´ biggest coal companies, have filed for bankruptcy protection.

FILE.- On Tuesday local media report that the terms of the contract were unknown, despite the ambitious transaction.

In its response theCDEEE says Pinergy cannot comply with the provision of the penalty, "inthe absence of contracts for the purchase of the plant and some frontline bankfinancing."

The utility says the company´sbreaches of the agreement for the construction of the third coal plant,"activate scenarios of early termination of the agreements, and "bothparties are fully able to exercise the unilateral termination and anticipatedno reason attributable to the counterparty."

"The cancellationof the contract came through a communication sent via subpoena to the privatecompany on May 27, 2015, by CDEEE executive vice president Ruben JimenezBichara," the utility said in its statement on the publication ofinformation on the third power plant.

The proposed powerplant would have been the third to be built in the south region, after the twobeing build in Punta Catalina, Peravia province.