Dive Brief:
- The Federal Energy Regulatory Commission has approved Dynegy's $3.3 billion acquisition of almost 9,000 MW of generation owned by Engie, likely setting the deal up for a quick closing next week.
- FERC conditionally approved the deal about a month ago after concluding there would be no impact on power rates. The commission did call for some additional market analysis due to concerns over the deal's impacts on competition.
- The fossil-fuel generation is located in the ERCOT, PJM, and ISO-New England electricity markets.
Dive Insight:
FERC, in a flurry of activity leading up to Commissioner Norman Bay's departure today, approved Dynegy's acquisition of Engie's power plants. A compliance filing Dynegy made in December "addresses the competitive concerns identified," FERC said in its order.
Much of FERC's concern focused on the upcoming 2020/2021 base residual auction in the Commonwealth Edison delivery area. Dynegy proposed the possible divestiture of 327 MW of generation to mitigate that concern.
Dynegy's statement indicated it expects to conclude the deal next week. President and CEO Bob Flexon said the deal marked "another major milestone in Dynegy’s transformation, bringing a large portfolio of high-quality assets in key power markets.
The structure of the deal has changed since it was announced last year. Dynegy and Energy Capital Partners formed a joint venture, Atlas Power, in 2016 to purchase 8,731 MW in the deal, but Dynegy subsequently bought ECP out.
In June, Dynegy said it had agreed to buy out ECP’s 35% stake in the joint venture for $375 million. The buyout, however, did not impact ECP’s commitment to buy $150 million of Dynegy common stock at the close of the ENGIE transaction.
The deal will grow Dynegy's reach into regulated markets and gives it a 31,000 MW portfolio. Following completion of the deal, about 40% of Dynegy's capacity would be in the PJM market, 15% in New England, 18% in the Midwest, and 13% in ERCOT.
