Dive Brief:
- Dynegy announced on Friday that the company agreed to purchase 12,500 megawatts of coal and gas-fired generation.
- The company agreed to pay $2.8 billion for Duke Energy's retail electricity business in Ohio, Pennsylvania and Michigan and the utility's stake in 10 Midwest power plants totaling 6,100 MW in the PJM Interconnection's footprint.
- Dynegy also agreed to pay $3.45 billion to Energy Capital Partners for its 6,300 MW of merchant generation assets in New England and PJM Interconnection, including EquiPower Resources and Brayton Point Holdings.
Dive Insight:
After the deals close, Dynegy will have nearly doubled its generating capacity to 26,000 MW. The acquisitions will also give the company retail electricity customers representing an annual retail load of over 7 terawatt-hours in PJM, according to a release. Dynegy expects both deals to close by the end of Q1 2015.
If the deal goes the through, the following plants will be under Dynegy's ownership: Duke Energy's Killen, Stuart, Conesville, Miami Fort, Zimmer, Hanging Rock, Washington, Fayette, Lee and Dicks Creek power plants; and Energy Capital Partners' Milford, Lake Road, Dighton, Masspower, Liberty, Elwood, Richland, Stryker, Kincaid and Brayton Point power plants.
Duke Energy's assets are made up of 3,300 MW of gas-fired capacity and 2,800 MW of coal-fired capacity, including approximately 2,600 MW of combined cycle gas turbines, according to a presentation prepared for investors. Dynegy's deal with Duke Energy represents the company's expansion in PJM with a "balanced" fleet.
Energy Capital Partners' assets are made of approximately 3,700 MW of gas-fired capacity and 2,600 MW of coal-fired capacity, including about 2,500 MW of combined cycle gas turbines. This will give Dynegy a greater baseload generation presence in PJM and particularly New England.
The deals will increase Dynegy's capacity in New England, whose wholesale electricity market faces reliability questions, seven times over and increase the company's presence in PJM, which is currently considering capacity market rule changes to bolster reliability, by four.
"The addition of these portfolios transforms Dynegy by adding considerable scale in the PJM (Pennsylvania, New Jersey, Maryland) and New England markets," Dynegy CEO Robert Flexon said, as reported by Reuters.
