Dynegy sees delay in $6bn generator purchase deal

OREANDA-NEWS. Washington, 20 January (Argus) — Dynegy expects to need more time to close its acquisition of 12,500MW of coal and gas generating capacity from Duke Energy and Energy Capital Partners because of a data request from federal energy regulators.

The company yesterday said it no longer expects the transaction to close this quarter because of the bid for more information that the Federal Energy Regulatory Commission (FERC) filed on 16 January. The deal, if approved by regulators, would nearly double Dynegy's generating capacity to 26,000MW.

Dynegy under the deal will pay Duke \\$2.8bn for 3.3GW of gas capacity and 2.8GW of coal capacity in the PJM Interconnection. The company also plans to pay \\$3.45bn to Energy Capital Partners for 3.7GW of gas capacity and 2.6GW of coal capacity in PJM and New England, though that will drop by 1.5GW once the Brayton Point coal plant in Massachusetts retires in mid-2017.

Dynegy had told FERC that its post-transaction market share of 6.5pc in PJM was too small to require running certain tests on how the merger would affect power prices. But the commission in its request for more information said the company had not adequately shown this was the case. FERC also wanted information on how Dynegy's customers would be protected from higher rates once the transaction with Duke closes.

Dynegy did not provide a new estimate for when it expects the deal to close. FERC's approval is the last regulatory hurdle Dynegy needs to overcome.