GenOn will be led by Mirant Chairman and CEO Edward R. Muller until 2013, when he will retire and the top post will be taken by Mark M. Jacobs, RRI Energys current president and CEO. Jacobs will serve as GenOns president, chief operating officer and a director until that time.

There likely will be job cuts among the two companies 3,600 employees, but how many has not been decided, Jacobs told The Associated Press. Muller, who has been Mirant CEO since 2005, said that once he retires he has no plans to head another major company.

Mirant stockholders will receive 2.835 RRI common shares for each Mirant share they own. Based on RRIs Friday closing price of $3.95, that values Mirant at $11.20 per share - a 4 percent premium. Based on Mirants 143.9 million shares outstanding at March 8, the deal values Atlanta-based Mirant at $1.61 billion.

Mirant stockholders will own roughly 54 percent of the combined company, while shareholders of RRI Energy will own roughly 46 percent.

The two companies said they expect $150 million in annual cost savings starting in January 2012 from reductions in corporate overhead. The transaction, expected to close by the end of the year, is subject to regulatory and stockholder approvals and the refinancing of a portion of each companys existing debt.

GenOn will be based in Houston, where RRI Energy is headquartered, and the Mirant and RRI Energy corporate names will be phased out, according to the companies. The GenOn board will include 10 members - five from each of the two companies existing boards. Mirant Chief Financial Officer J. William Holden III will serve as GenOn CFO.

As for the name change, that decision was made because the companies wanted to show their employees they were creating a “merger of equals” and starting anew rather than one company acquiring another, executives said.

The merger is the second big transaction in the power industry this year. In February, FirstEnergy agreed to buy Allegheny Energy in a $4.7 billion stock deal that will create a company made up of 10 utilities with $16 billion in annual revenue.

The deal would conclude a remarkable turnaround for Mirant. In 2003, the company filed what was at the time the 11th largest bankruptcy in US history. In January 2006, it emerged from Chapter 11 protection after having reduced its work force and shaved billions in debt from its balance sheet as part of its return to the public markets.

Mirant later made a play for rival NRG Energy Inc., but rescinded its $8 billion bid to acquire the company after NRGs board rebuffed the unsolicited offer.

“Since Mirant came out of bankruptcy, it has been focused on delivering value to its owners,” Muller said in an interview. “We have tried various ways to do that, and some efforts didnt pan out. But we have through various cycles … been a healthy company and done many things we set out to do, including divesting our assets outside the United States at a very good time in the market.”

The combined cash balance of the companies as of Dec. 31 totaled $2.9 billion.

Mirant was advised by J.P. Morgan and Wachtell, Lipton, Rosen & Katz. Goldman, Sachs & Co. and Morgan Stanley acted as RRI Energys financial advisers and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal counsel.

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“Peabodys revised proposal remains highly conditional and does not fully value Macarthur and its significant growth prospects,” chairman Keith De Lacy said in a statement.

The board gave no indication of a possible price it might accept but said Peabodys offer is not an “adequate premium” for control. The American offer is 15.8 percent above Macarthurs closing stock price on March 30 but the board said it is below the price industry analysts believe represents the full value of the company.

Foreign investors who are rushing to buy into Australias mining and resource industries in hopes of profiting from future demand. Some Australian critics object to selling control of natural resources to foreigners, but many target companies welcome the influx of capital to pay down debt or expand.

Peabody, based in St. Louis, Missouri, is one of the worlds biggest coal producers. It has eight mines in Australia and wants to expand in a country rich in coal used in the resurgent steelmaking industry and in demand by key Asian markets such as China.

Macarthur plans to pursue its own bid to purchase Gloucester Coal Ltd., a smaller Australian rival, and further consolidate Australias coal industry. The Peabody offer would have required Macarthur to drop its bid for Gloucester.

“The board … continues to believe these transactions are in the best interests of Macarthur and its shareholders,” de Lacy said.

On Wednesday, Macarthurs shares were trading down 4.04 percent at AU$14.49 soon after the announcement.

Gloucesters shares remained in a trading halt, and last traded at AU$9.31.

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“Demand in the U.S. has been very depressed,” said Eliane Tanner, an analyst at Credit Suisse Group AG in Zurich. “Thats looking like its starting to pick up and get to more average levels, and we expect a gradual improvement in prices. The risk is that the inventory numbers will not be so positive today.”

Crude for April delivery was at $81.55 a barrel, 6 cents higher in electronic trading on the New York Mercantile Exchange as of 9:32 a.m. London time. It had fallen as low as $81.05 earlier today. Brent crude oil for April delivery traded 16 cents higher at $80.04 a barrel on the London-based ICE Futures Europe exchange.

The U.S. dollar lost some of its strength to trade at $1.357 against the euro, compared with $1.3543 earlier.

The Energy Department report will probably show that U.S. inventories of crude oil rose from 341.6 million barrels, according to the median of 17 analyst responses in a Bloomberg News survey. The department is scheduled to release its Weekly Petroleum Status Report at 10:30 a.m. in Washington.

More Demand

In its Short-Term Energy Outlook published yesterday, the department revised up its projection for global oil consumption this year to 85.51 million barrels a day from 85.3 million last month. Thats up 1.7 percent from last years 84.04 million barrels a day. Demand will climb to 87.06 million in 2011, up 0.2 percent from last months projection.

“The recovery does look like its becoming entrenched, but things are still quite slow,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne.

The Organization of Petroleum Exporting Countries, responsible for 40 percent of global oil output, will release its monthly report on supply and demand later today. The group is scheduled to meet on March 17 in Vienna to review policies, having left quotas unchanged for a fourth time at its last meeting on Dec. 22.

Saudi Arabia had 4 million barrels a day of spare oil output capacity that can be absorbed into the market when global energy consumption recovers, the head of the kingdoms state- owned oil company said yesterday.

“Oil supply will decline if there is no investment, so that 4 million could be absorbed by demand alone,” said Khalid al-Falih, chief executive officer of the Saudi Arabian Oil Co., in a speech at a Cambridge Energy Research Associates conference in Houston.

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“We had a nice spike up on the jobless report,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut.

Crude oil for April delivery gained $1.29, or 1.6 percent, to settle at $81.50 a barrel on the New York Mercantile Exchange, the highest closing price since Jan. 11. The contract jumped 2.3 percent this week.

Gasoline for April delivery climbed 3.73 cents, or 1.7 percent, to $2.2710 a gallon in New York, the highest settlement price since Oct. 1, 2008.

The Standard & Poors 500 Index gained 15.73, or 1.4 percent, to 1,138.70 in New York. The Dow Jones Industrial Average increased 122.06 points to 10,566.20.

The number of jobless Americans held at 9.7 percent of the workforce in February, Labor Department figures showed. The unemployment rate was projected to increase to 9.8 percent, according to the median of 82 responses from economists surveyed by Bloomberg News.

Positive Outlook

“The figures were better than expected, and thats boosted oil prices,” said Mike Wittner, head of oil market research at Societe Generale SA in London. “Fewer job losses than forecast is positive in the short term for U.S. GDP, and therefore the outlook for oil demand.”

The U.S. grew at a 5.9 percent annual rate in the last three months of 2009, the biggest gain in six years, according to data from the Commerce Department last week. The U.S. is the worlds biggest energy-consuming country.

“The employment numbers were quite good relative to expectations,” said Michael Fitzpatrick, vice president of energy at MF Global in New York.

Total U.S. fuel demand, averaged over the past four weeks, rose 219,000 barrels to 19.3 million barrels a day, the Energy Department said. The total has increased for four consecutive weeks.

Positive Headlines

“Everyone seems happy about todays positive headlines,” said Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington. “It will be interesting to see if this has any impact on what OPEC does on March 17. What King Abdullah thinks is the most important factor.”

The Organization of Petroleum Exporting Countries is scheduled to meet in Vienna on March 17. Saudi Arabias King Abdullah has targeted $75 as a fair price for consumers and producers. The desert kingdom is the worlds biggest oil exporter and the most influential member of OPEC.

OPEC will cut shipments 2.3 percent in the four weeks ending March 20, according to consultant Oil Movements. The group will reduce exports by sea in the period by 2.3 percent to 22.87 million barrels a day from 23.42 million in the month ended Feb. 20, the Halifax, England-based tanker-tracker said yesterday. The data exclude Ecuador and Angola.

No Shortage

“Theres no shortage of oil,” Sieminski said. “Demand is still tepid and there is plenty of supply. I still think that some point between now and the middle of the year the market will hit some headwinds, which will deflate the price of oil.”

U.S. inventories of crude oil climbed 4.03 million barrels to 341.6 million last week, the highest level since August and 5.7 percent above the five-year average for the week, according an Energy Department report on March 3.

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Hes now calling for a new generation of nuclear power plants.

During the campaign, Obama said he would support nuclear power with caveats. He was concerned about how to deal with radioactive waste and how much federal money was needed to support construction costs. Those concerns remain.

His administration has pledged to close Yucca Mountain, the planned multibillion-dollar burial ground in the Nevada desert for high-level radioactive waste. Energy Secretary Steven Chu has been criticized for his slow rollout of $18.5 billion in loan guarantees to spur investment in new nuclear power plants, and the administration killed a Bush-era proposal to reprocess nuclear fuel.

What has changed is the outlook for climate and energy legislation, a White House priority. The House passed a bill in June that would limit emissions of heat-trapping gases for the first time. But the legislation led to a Republican revolt in the Senate.

Obama reaffirmed his commitment to a bill in his State of the Union speech as a way to create more clean-energy jobs, but added that “means building a new generation of safe, clean nuclear power plants in this country.”

The 104 nuclear reactors in operation in 31 states provide only 20 percent of the nations electricity. But they are responsible for 70 percent of the power from non-greenhouse gas producing sources, including wind, solar and hydroelectric dams.

—

On the Net:

Department of Energy: http://www.doe.gov

Nuclear Regulatory Commission: http://www.nrc.gov

Nuclear Energy Institute: http://www.nei.org

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“The cold weather drove the recent run higher and now oil is taking a breather,” said Andrey Kryuchenkov, an analyst with VTB Capital in London. “While the economic outlook is still positive, the overhang in supplies shows prices ran ahead of themselves and should now remain range-bound between $79.75 and $82.”

Crude oil for February delivery fell as much as 93 cents, or 1.1 percent, to $81.59 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $81.87 a barrel at 9:10 a.m. London time.

Futures reached $83.95 a barrel yesterday, the highest since Oct. 14, 2008, on a report Chinas crude imports reached a record last year. The country is the worlds second-largest energy consumer.

The dollar gained against higher-yielding currencies, damping the investment appeal of commodities. It rose as much as 0.4 percent to $1.4454 per euro, from $1.4513 yesterday in New York.

Average Temperature

The average temperature in New York was 27 degrees Fahrenheit (minus 3 Celsius) during the first 10 days of 2010, according to the National Weather Service. Thats 6 degrees below normal. Oil rose 4.3 percent over that period.

“The cold snap in the U.S. seems to be breaking,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “Distillates and heating oil could see some demand coming off in the coming weeks and months.”

U.S. distillate fuel stockpiles probably declined for a fifth week as demand increased during the cold snap. Supplies including heating oil and diesel dropped 1 million barrels last week, based on the median estimate from 11 analysts surveyed by Bloomberg News. Nine respondents forecast a reduction in stockpiles and two predicted a gain.

Distillate inventories fell to 159 million barrels in the week ended Jan. 1, 16.1 percent above the five-year average level, according to the Energy Department.

U.S. crude oil and gasoline inventories are expected to have increased a second week last week, the Bloomberg survey showed. The Energy Department will release its Weekly Petroleum Status Report at 10:30 a.m. tomorrow in Washington.

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“Most important has been the cold weather,” said Christopher Bellew, senior broker with Bache Commodities Ltd. in London. “There has also been the re-emergence of political risk in Iran and strength across commodities generally. But if theres any sign of a thaw well see prices drop.”

Crude oil for February delivery rose as much as $1.80, or 2.3 percent, to $81.16 a barrel in electronic trading on the New York Mercantile Exchange. Thats the highest since Oct. 30, and the first time above $80 since Nov. 18. The contract was at $80.95 at 10 a.m. London time. Heating oil climbed to the highest in 14 months. Futures climbed 78 percent last year.

Cold Weather

The Climate Prediction Center, a National Weather Service agency, forecast below-normal temperatures across the eastern half of the U.S. from tomorrow through Jan. 13. The northeast region consumes about four-fifths of the nations heating oil.

U.S. heating oil stockpiles have fallen for six weeks to 44.4 million barrels, the longest decline since April 2008, Energy Department data showed Dec. 30.

Heating oil for February delivery rose as much as 4.58 cents, or 2.2 percent, to $2.1646 a gallon in New York. It was at $2.1626 at 9:24 a.m. London time.

Crude oil shipments to Europe from Russia were normal as supply talks with Belarus continued beyond a Jan. 1 deadline, according to Belaruss state-run oil company Belneftekhim. Russia, the worlds largest energy exporter, is still in discussions with its western neighbor, according to Russian energy ministry spokeswoman Irina Yesipova.

PKN Orlen SA, Polands largest refiner, said it is receiving Russian oil as normal through the pipeline that runs through Belarus, according to spokesman Dawid Piekarz.

Russias Deputy Prime Minister Igor Sechin said Dec. 28 Moscow will charge duties starting on Jan. 1 if there was no agreement by then. The countries are negotiating a deal under which part of Russias oil sales to Belarus would be exempt from export duty.

The Financial Times reported yesterday on its Web site that Russian oil shipments were halted, citing traders it didnt identify by name.

U.S. payrolls probably fell by 1,000 workers last month, the smallest drop since the recession began two years ago, according to a Bloomberg News survey of economists before a Jan. 8 Labor Department report. A stabilizing labor market may boost consumer spending, the biggest part of the U.S. economy.

“There are further indications that the recovery is progressing,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “Its also been pretty cold in the U.S. and thats also been supportive.”

The Institute for Supply Managements factory index, due today, probably rose to 54 from 53.6 in November, a separate Bloomberg News poll showed. Readings above 50 signal expansion.

China Manufacturing

Chinas manufacturing expanded in December by the most in five years, HSBC Holdings Plc and Markit Economics said in an e- mail today, supporting estimates that the countrys growth has accelerated to more than 10 percent. The country is the worlds second-largest energy consumer.

Police in Iran said last week they detained more than 300 people after clashes between security forces and protesters in Tehran and other cities left more than eight people dead.

Brent crude oil for February settlement rose as much as $1.82, or 2.4 percent, to $79.76 a barrel on the London-based ICE Futures Europe exchange. It was at $79.58 at 10:01 a.m. London time.

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The construction would come with a cost: Government scientists have concluded that more than 6 square miles of habitat for the federally threatened desert tortoise would be permanently lost.

The Sierra Club and other environmentalists want the complex relocated to preserve what they call a near-pristine home for rare plants and wildlife, including the protected tortoise, the Western burrowing owl and bighorn sheep.

“Its actually a good project. Its just located in the wrong place,” said Ileene Anderson of the Center for Biological Diversity, a Tucson, Ariz.-based environmental group.

The dispute is likely to echo for years as more companies seek to develop solar, wind and geothermal plants on land treasured by environmentalists who also support the growth of alternative energy. In an area of stark beauty, the question will be what is worth preserving and at what cost as California pushes to generate one-third of its electricity from renewable sources by 2020.

The Bureau of Land Management has received more than 150 applications for large-scale solar projects on 1.8 million acres of federal land in California, Nevada, Arizona, New Mexico, Colorado and Utah. In California alone, such projects could claim an area the size of Rhode Island, transforming the state into the worlds largest solar farm.

BrightSource Energy wants permission to construct three solar power plants on the site that together would generate enough power each year for 142,000 homes, potentially generating billions of dollars of revenue over time.

The suns power is used to heat water and make steam, which in turn drives turbines to create electricity. Built in phases, the project would include seven, 459-foot metal towers, a natural gas pipeline, water tanks, steam turbine generators, boilers and buildings for administration and maintenance. Each plant would be surrounded by 8-foot high steel fencing.

The site has virtually unbroken sunshine most of the year, and is near transmission lines that can carry the power to consumers.

In November, federal and state biologists reviewing the plan proposed that the company catch and move the tortoises and preserve them elsewhere on 12,000 acres, a proposal that could cost BrightSource an estimated $25 million.

John Kessler, a project manager for the California Energy Commission, said there is disagreement with BrightSource over what the company would pay for long-term maintenance for the land that would be purchased, and the company also believes the cost of buying it should be less.

The company declined to comment directly on those issues.

BrightSource President John Woolard warned in government filings released last month that heavy-handed regulation could kill the proposal. He did not mention the tortoises directly but referred to “unbounded and extreme” requirements being placed on the company.

At a time when the White House is pushing for the rapid development of green power, Woolard predicted the outcome in the California desert would reverberate widely.

The large-scale solar industry “is in its infancy, with great promise to compete with conventional energy,” Woolard wrote. “Overburdening this fledgling industry will cause it to be stillborn, ending that promise before it has truly begun.”

The Sierra Club wants regulators to move the site closer to Interstate 15, the busy freeway connecting Los Angeles and Las Vegas, to avoid what it says will be a virtual death sentence for the tortoises. Estimates of the population have varied, but government scientists say at least 25 would need to be captured and moved.

The group argues that the reptiles are the “most genetically distinct” of all of Californias desert tortoises and point to a 2007 U.S. Fish and Wildlife Service report that found the tortoise population is dropping in parts of a four-state region that includes California.

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U.S. Mine Safety and Health Administration documents show 18 of the deaths occurred in coal mines, down from 29 in 2008; and 16 were in gold, copper and other types of mines, down from 22 in 2008. Most involved aboveground truck accidents on mine property, though some of the deaths resulted from rock falls and being struck by machinery.

Obama administration mine safety czar Joe Main said the numbers are encouraging, but he wont be satisfied until no miners are killed on the job.

“I think thats accomplishable, if you look at where we came from, and where weve come to,” Main said.

The latest statistics are vastly improved, he said, from a century ago when hundreds, sometimes thousands of miners were killed each year.

The deadliest year in recorded U.S. coal mining history was 1907, when 3,242 deaths were reported. That year, the nations most deadly mine explosion killed 358 people near Monongah, W.Va.

Main credits the decrease in deaths over the past year to beefed-up enforcement and stricter regulations in the wake of a series of mining disasters over the past four years in Kentucky, Utah and West Virginia.

In 2006, 73 miners were killed, including 12 who died in a methane explosion at the Sago Mine in West Virginia and five who died in a similar explosion at the Darby Mine in Kentucky. In 2007, 67 miners died, including six who were killed in the collapse of the Crandall Canyon mine in Utah.

Coal states reacted by revamping their mine safety laws, and Congress toughened federal rules that that brought a variety of advances. Among the improvements are caches of oxygen stashed in underground mines in case miners are trapped, refuge chambers to provide shelter in emergencies, and a communications system to allow underground miners to talk with colleagues on the surface.

Steve Earle, United Mine Workers of America international vice president for the Midwest, said while those were important improvements, getting inspectors into the field is the key.

“I can say without reservation that the safest day coal miners have is when inspectors are in the mines,” he said. “The more we can put our inspectors in the mines, the safer those mines will become and the closer we will come to zero fatalities.”

Mine safety advocate Tony Oppegard, who has successfully lobbied to triple the number mine inspections conducted in Kentucky, said mining remains a dangerous occupation.

Kentucky led the nation in mining deaths last year with six in coal mines and one in a limestone quarry. That was followed by West Virginia and Alabama, each of which had three coal miners killed.

Illinois, Louisiana, Missouri, Pennsylvania, Tennessee, and Texas each had two miners killed in coal, salt, alumina, zinc or sand and gravel operations. Arizona, Arkansas, California, Georgia, Iowa, Nevada, Ohio, Virginia and Puerto Rico had one miner killed in either clay, copper, gold, lime or sand and gravel operations.

“Its never positive when you have numbers like that, but it could have been worse,” said David Moss, spokesman for the Kentucky Coal Association. “Were always striving for that goal of zero. Thats what we work toward every single day.”

Main credited cooperation between regulatory agencies, coal companies and miners with making mines safer, which led the decrease in workplace deaths.

“It is historic,” he said. “And it does tell us we can achieve a point in time when we have no fatalities.”

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“The hope is of course that oil demand is strong,” Johannes Benigni, chief executive officer of JBC Energy GmbH in Vienna, said in an interview on Bloomberg Television. “With oil prices at $75, everyone is happy and no one really needs to touch the hot iron.”

Crude oil for February delivery was at $73.87, up 15 cents, in electronic trading on the New York Mercantile Exchange at 9:13 a.m. London time. The January contract expired yesterday at $72.47 a barrel.

Brent crude oil for February settlement traded at $73.10 a barrel, up 11 cents, on the London-based ICE Futures Europe exchange. Brent declined 76 cents yesterday.

Nymex crude prices have gained 66 percent this year as OPECs pledge in 2008 to reduce 4.2 million barrels a day of output took effect. The 12-member group left targets unchanged for a third time when it last gathered in September.

OPEC Consensus

There is a consensus among members to keep OPEC quotas unchanged, Algerian Energy Minister Chakib Khelil said today, before the formal meeting began, echoing similar statements from other OPEC officials yesterday.

“Quotas will continue as they are right now, there is no need to change,” al-Naimi said today in the Angolan capital Luanda. “The market sees $70 to $80 as a perfect price, an excellent price for the world.”

All the 36 analysts surveyed by Bloomberg News last week said they expected OPEC to maintain formal production limits. Collectively, the 11 members with quotas pump 6 percent more than their targets allow, according to Bloomberg estimates.

“Investors do not seem to be impressed by the OPEC get- together, with the result being a foregone conclusion that many oil ministers are not even bothering to show up,” Edward Meir, senior analyst with MF Global Ltd. in Connecticut, said in a report today. “We expect the ensuing price bias will be to the downside.”

U.S. distillate inventories, which include heating oil and diesel, probably dropped 2 million barrels in the week ended Dec. 18 from 164.4 million the previous week, according to the median of estimates from 12 analysts before an Energy Department report tomorrow. All of the survey respondents forecast a decrease.

Prior to the Energy Department report, a similar weekly inventory snapshot will be published later today by the American Petroleum Institute.

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