Dynegy Inc. (NYSE:DYN), through its wholly owned subsidiary, has
finalized its acquisition of Duke Energy’s commercial generation
assets and retail business in the Midwest. The Duke assets include
a seven million megawatt-hour (MWhr) retail portfolio and 11
generating stations, capable of generating 6.1 gigawatts of
electricity into the PJM power market. The acquisition price was
$2.8 billion in cash at closing.
The Company completed its acquisition of EquiPower Resources
Corp. and Brayton Point Holdings, LLC from Energy Capital Partners
yesterday. With these transactions, Dynegy now owns nearly 26,000
megawatts (MW) of generating capacity in eight states—enough to
supply nearly 21 million homes. The Company also provides retail
electricity to 830,000 residential customers and 23,000 commercial,
industrial and municipal customers in Illinois, Ohio and
Pennsylvania.
“The EquiPower and Duke acquisitions are transformational for
Dynegy, ushering in a new era of substantial scale, and geographic
and fuel diversity,” said Dynegy President and Chief Executive
Officer Robert C. Flexon. “We now have a meaningful presence in
three of the best markets in the country and substantial fuel
diversity across our portfolio. Additionally, our PJM retail
business is now fully backed by generation, providing a platform
for growth.”
Yesterday the Company raised its projection for synergies from
$40 million to $100 million and announced it was allocating $100
million of capital to reduce the equity that would have been issued
under the original Energy Capital Partners transaction terms.
Transaction Benefits:
The transactions have doubled Dynegy’s generating capacity and
are expected to increase annual generation from approximately 60
million MWhrs to an estimated 115 million MWhrs for the Company.
Scale will drive productivity gains for the Dynegy platform, and
overhead costs per MWh generated are expected to fall by 35%. With
the higher levels of capacity contracting in PJM and ISO-NE, the
Company will also benefit from improved visibility and
predictability of cash flows. PJM and ISO-NE capacity payments will
represent 25% of the combined company’s gross margin in 2015
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.
Portfolio Diverse in Geography and Fuel Type: 25,758
megawatts in 8 states
Plant
Location
Net Capacity (3)
Market
Ownership Primary
(MW)
Interest
Fuel Moss Landing 1&2
Moss Landing, CA 1,020
CAISO 100% Gas
Moss
Landing 6&7 Moss Landing, CA
1,509 CAISO
100% Gas
Oakland
Oakland, CA 165 CAISO
100% Oil
Brayton
Point (2)(4) Somerset, MA
1,493 ISO-NE
100% Coal
Casco Bay
Veazie, ME 538
ISO-NE 100% Gas
Dighton (2) Dighton, MA
187 ISO-NE
100% Gas
Lake Road (2)
Dayville, CT 856
ISO-NE 100% Gas
Masspower (2) Indian Orchard, MA
280 ISO-NE
100% Gas
Milford(2)
Milford, CT 579
ISO-NE 100%
Gas
Independence Scriba, NY
1,108 NY-ISO
100% Gas
Baldwin
Baldwin, IL 1,815
MISO 100% Coal
Havana Havana, IL
434 MISO 100%
Coal
Hennepin Hennepin,
IL 294 MISO
100% Coal
Wood River
Alton, IL 465
MISO 100% Coal
Coffeen Coffeen, IL
915 MISO-IPH 100%
Coal
Duck Creek
Canton, IL 425 MISO-IPH
100% Coal
Edwards
Bartonville, IL 685
MISO-IPH 100%
Coal
Joppa/EEI Joppa, IL
802 MISO-IPH
80% Coal
Newton
Newton, IL 1,230
MISO-IPH 100% Coal
Conesville Station 4 (1)
Conesville, OH 312 PJM
40% Coal
Dicks
Creek (1) Monroe, OH
153 PJM 100%
Gas
Elwood (2)
Elwood, IL 788 PJM
50% Gas
Fayette
(1) Masontown, PA
649 PJM 100%
Gas
Hanging Rock (1)
Ironton, OH 1,296
PJM 100% Gas
Kendall Minooka, IL
1,209 PJM 100%
Gas
Killen (1)
Manchester, OH 204
PJM 33% Coal
Kincaid (2) Kincaid, IL
1,108 PJM
100% Coal
Lee (1)
Dixon, IL 712 PJM
100% Gas
Liberty
(2) Eddystone, PA
600 PJM 100%
Gas
Miami Fort 7&8 (1)
North Bend, OH 653
PJM 64% Coal
Miami Fort (CT) (1) North Bend,
OH 68 PJM
100% Oil
Ontelaunee
Reading, PA 560
PJM 100% Gas
Richland (2) Defiance, OH
447 PJM
100% Gas
Stryker (2)
Stryker, OH 19
PJM 100% Oil
Stuart (1) Aberdeen, OH
904 PJM 39%
Coal
Washington (1)
Beverly, OH 648
PJM 100% Gas
Zimmer (1) Moscow, OH
628 PJM 47%
Coal
(1) newly acquired Duke assets(2) newly acquired EquiPower
assets(3) unit capabilities are based on winter capacity(4) Brayton
Point is scheduled to be retired from service on June 1, 2017
About Dynegy
We are committed to leadership in the electricity sector. With
nearly 26,000 megawatts of power generation capacity and two retail
electricity companies, we are capable of supplying 21 million homes
with safe, reliable and economic energy. Homefield Energy and
Dynegy Energy Services are retail electricity providers serving
businesses and residents in Illinois.
Forward-Looking Statement
This press release contains statements reflecting assumptions,
expectations, projections, intentions or beliefs about future
events that are intended as “forward-looking statements”
particularly those statements concerning: the anticipated
transformation of Dynegy; Dynegy’s growth ability in its PJM retail
business; anticipated synergies; and Dynegy’s anticipated benefits
associated with the EquiPower and Duke acquisitions. Discussion of
risks and uncertainties that could cause actual results to differ
materially from current projections, forecasts, estimates and
expectations of Dynegy is contained in Dynegy’s filings with the
Securities and Exchange Commission (the “SEC”). Specifically,
Dynegy makes reference to, and incorporates herein by reference,
the section entitled “Risk Factors” in its 2014 Form 10-K. In
addition to the risks and uncertainties set forth in Dynegy’s SEC
filings, the forward-looking statements described in this press
release could be affected by, among other things, (i) problems may
arise in successfully integrating the Duke Energy, EquiPower and
Brayton power facilities into Dynegy’s current portfolio, which may
result in Dynegy not operating as effectively and efficiently as
expected; (ii) Dynegy may be unable to achieve expected synergies
or it may take longer than expected to achieve such synergies;
(iii) any of the transactions may involve unexpected costs or
unexpected liabilities; (iv) the industry may be subject to future
regulatory or legislative actions, including environmental, that
could adversely affect Dynegy; and (v) Dynegy may be adversely
affected by other economic, business, and/or competitive factors.
Any or all of Dynegy’s forward-looking statements may turn out to
be wrong. They can be affected by inaccurate assumptions or by
known or unknown risks, uncertainties and other factors, many of
which are beyond Dynegy’s control.
Dynegy Inc.Media:Micah Hirschfield, 713-767-5800orAnalysts:Andy
Smith, 713-507-6466
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