Dynegy to buy Duke, Energy Capital plants for $6.25 billion

Houston-based Dynegy Inc. agreed to buy $6.25 billion of power plants - including one just south of Philadelphia International Airport - from Duke Energy Corp. and private-equity firm Energy Capital Partners, almost doubling its generating capacity less than a year after emerging from bankruptcy protection.

The sale includes $2.8 billion for 11 Duke natural gas, coal, and oil power plants in Ohio, southwestern Pennsylvania, and Illinois as well as its retail sales business, Dynegy said in a statement Friday. In a separate transaction, Dynegy is spending $3.45 billion for Energy Capital plants in Massachusetts, Connecticut, Illinois, and Ohio, and the gas plant in Eddystone.

A Dynegy spokeswoman told The Inquirer that the company would operate the Eddystone plant and did not plan immediate staffing changes, though a review would occur after the deal closes.

Duke is one of several utility owners seeking to divest power plants that compete for buyers on wholesale markets, instead favoring returns from units with customers paying regulated rates. The last of Dynegy's subsidiaries emerged from bankruptcy protection in November 2013, after a collapse in wholesale electricity prices drove several years of losses for the independent power producer.

The deal extends Dynegy's sales in PJM Interconnection L.L.C., the largest U.S. wholesale power market, and in New England, where cold weather and a fuel shortage caused electricity prices to surge in January. The PJM market extends from New Jersey and Virginia in the east to Illinois in the west.

"The addition of these portfolios transforms Dynegy by adding considerable scale in the PJM and New England markets," Chief Executive Officer Robert Flexon said in the statement.

With the acquisition, Dynegy would rival Calpine Corp. as the largest U.S. independent power producer by capacity with about 26,000 megawatts of generating capacity each. NRG Energy Inc. owns plants capable of producing 52,466 megawatts. A megawatt can power about 800 typical U.S. homes.