Dynegy Acquires Another Retail Supplier, Two Sets of Merchant Power Plants

Dynegy Inc. announced that it will acquire the Duke Energy Retail business as well as certain Midwest generation assets from Duke Energy totaling 6,100 MW.

Dynegy also announced that it would acquire certain generation assets from EquiPower Resources Corp. and Brayton Point Holdings, LLC from Energy Capital Partners, totaling 6,300 MW in aggregate in MISO, PJM and ISO-NE.

The Duke portfolio to be acquired includes Duke's retail business and ownership interests in the following plants: Killen, Stuart, Conesville, Miami Fort, Zimmer, Hanging Rock, Washington, Fayette, Lee and Dicks Creek.

Duke Energy Retail adds over 7 terawatt-hours of annual retail load in PJM to Dynegy's retail book.

The ECP assets include these generating facilities: Milford, Lake Road, Dighton, Masspower, Liberty, Elwood, Richland, Stryker, Kincaid and Brayton Point.

Combined, the Duke and ECP assets will add 12,500 MW of coal and gas generation to Dynegy's fleet.

Upon closing both transactions, Dynegy will own nearly 26,000 MW of generating capacity nationally and provide retail electricity to residents and businesses in Illinois, Ohio, Pennsylvania and Michigan (the latter three states representing new markets for Dynegy)

The post-transaction retail business will serve over 20 TWh of load evenly split between MISO and PJM, Dynegy said. Dynegy said that retail margins of $1-4/MWh associated with the Duke Retail book are similar to Dynegy's existing margins.

The purchase price was $2.8 billion for the Duke assets and $3.45 billion for the ECP assets.

"The EquiPower and Duke Ohio generation assets will provide load following generation to support the retail businesses," Dynegy said, with the new PJM generation supporting retail growth in that region.

"The addition of the ECP assets and the Duke generation portfolio and retail marketing business complements Dynegy's existing assets and retail business by adding significant scale and fuel diversification in markets the Company currently participates in but otherwise lacks scale. Of the 12,500 MW being acquired, 5,053 MW are modern combined cycle natural gas plants and 3,793 MW are environmentally compliant coal generation plants," Dynegy said.

Dynegy said that with the transactions, PJM and ISO-NE capacity payments will represent 25% of the combined company's gross margin compared to 11% today as a result of quadrupling the size of the PJM fleet and increasing the size of the New England fleet seven-fold.

Both transactions are expected to close by the end of the first quarter 2015.