Duke Energy Sells Generation Business to Dynegy

Posted by Eric Haun
Friday, August 22, 2014

Duke Energy announced Dynegy will buy its non-regulated Midwest Commercial Generation Business for $2.8 billion in cash, which includes ownership interests in 11 power plants and Duke Energy Retail Sales, the company's competitive retail business in Ohio.

"This transaction is an important milestone in our strategy to exit the merchant generation business," said Marc Manly, president of Duke Energy's Commercial Businesses. "In the coming months, we will continue to safely operate these plants and work closely with Dynegy to obtain the regulatory approvals necessary to close the transaction. We will also be working with employees and community leaders to ensure a smooth transition for all stakeholders."

"These power plants have been important to Duke Energy and our Midwest customers for many years, and I am proud of the employees who have operated these plants well in challenging market conditions," said Lynn Good, president, CEO and vice chairman of Duke Energy.

"The Duke Energy employees at these plants are committed, hardworking men and women and we look forward to engaging their expertise and talents as we grow our company," said Dynegy's President and CEO Robert C. Flexon. "In addition, we intend to honor the terms of the collective bargaining agreements at the plants."

The completion of the transaction is conditioned on approval from the Federal Energy Regulatory Commission, the expiration of the waiting period under the Hart-Scott Rodino Act, and the release of certain credit support obligations. Closing is expected to occur in three to six months.

The Midwest generation business includes 11 merchant power plants with a capacity of approximately 6,100 megawatts. The plants are dispatched into the PJM wholesale power market and equipped with significant environmental controls. The plants are fully owned or partially-owned by Duke Energy Ohio and reported in the company's Commercial Power business unit.

Nine of the power plants are located in Ohio, one is in Illinois and one in Pennsylvania. Dayton Power & Light and American Electric Power's ownership interest in some of the power plants is not included in this transaction.

As a result of this announcement, in the third quarter Duke Energy will recognize an approximate $500 million pre-tax reversal of the $1.4 billion impairment previously recognized in 2014. Use of the proceeds is being evaluated. The transaction is expected to be accretive to shareholders by 2016. 

The Duke Energy Ohio and Kentucky and Duke Energy Indiana regulated utilities are not a part of the transaction.

The company began the process to exit its Midwest Commercial Generation Business in February 2014.

Duke Energy's financial advisors are Citigroup and Morgan Stanley. Bracewell & Giuliani is the company's legal advisor.

The following is an alphabetical listing of the 11 power plants being sold.

  • Conesville Station (coal), located in Conesville, Ohio. Partially owned by DP&L and AEP.
  • Dicks Creek (natural gas), located in Middletown, Ohio. Wholly Duke owned.
  • Fayette Energy Facility (natural gas), located in Masontown, Pa. Wholly Duke owned.
  • Hanging Rock Energy Facility (natural gas), located in Ironton, Ohio. Wholly Duke owned.
  • Killen Station (coal), located in Wrightsville, Ohio. Partially owned by DP&L.
  • Lee Energy Facility (natural gas), located in Dixon, Ill. Wholly Duke owned.
  • Miami Fort Station (coal) Units 7 & 8, located in North Bend, Ohio. Partially owned by DP&L.
  • Miami Fort Station (oil), located in North Bend, Ohio. Wholly Duke owned.
  • Stuart Station (coal), located in Aberdeen, Ohio. Partially owned by DP&L and AEP.
  • Washington Energy Facility (natural gas), located in Beverly, Ohio. Wholly Duke owned.
  • Zimmer Generating Station (coal), located in Moscow, Ohio. Partially owned by DP&L and AEP.


duke-energy.com
 

Maritime Reporter January 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

InterMoor Completes Juniper Mooring Installation Contract

InterMoor has completed a mooring and foundation installation campaign for bpTT’s Juniper gas project offshore Trinidad and Tobago, reportedly the largest foundation

Seagull Secures Panama Flag Approval

Seagull Maritime said it has secured training center approval from the Panama Maritime Authority, marking the first time that an overseas company has done so following

26-year Jail Term Sought for Concordia Master

An Italian prosecutor asked a court on Monday to sentence the captain of the Costa Concordia cruise liner to more than 26 years in jail for his role in the 2012 disaster that killed 32 people.

Finance

Study Examines Impacts of Inland Waterway Investment

The National Waterways Foundation (NWF) has commissioned and released a two-year study to examine the U.S. inland waterways’ national economic return on investment

Gypsy Moth Clause Takes Balanced Approach to Risk

A new BIMCO clause provides a simple, practical and commercial solution focusing on the basic obligations and responsibilities of owners and charterers when dealing with the Asian Gypsy Moth (AGM).

Maersk Line Gets new AEO number

Maersk Line has been re-certified as an Authorised Economic Operator (AEO) with the AEO-F, the highest achievable accreditation in the European Union programme.

Energy

KR Launches Software to Aid ECA Compliance

The Korean Register (KR) has launched an in-house developed software program to assist vessels with fuel oil change over when complying with the new low sulphur regulations.

Study Examines Impacts of Inland Waterway Investment

The National Waterways Foundation (NWF) has commissioned and released a two-year study to examine the U.S. inland waterways’ national economic return on investment

Boost for Offshore Wind Energy

As part of President Obama’s Climate Action Plan to create American jobs, develop domestic clean energy resources and cut carbon pollution, Secretary of the Interior

Mergers & Acquisitions

Coldharbour Marine's New UK Office

Coldharbour Marine, long recognised for the design, manufacture and supply of inert gas and fluid handling equipment vessels (FPSOs) has moved into a new 25k sq.

CEVA Opens 4th Chicago Office

CEVA Logistics, one of the world's leading supply chain management companies, has expanded its market presence in Chicago with the opening of a fourth facility.

Chevron, SK LNG Trading Ink Deal for LNG Supply

Chevron Corporation today announced its Australian subsidiaries have signed a binding Sales and Purchase Agreement (SPA) with SK LNG Trading Pte Ltd (SK). Under the SPA,

 
 
Maritime Contracts Maritime Standards Naval Architecture Navigation Pod Propulsion Port Authority Ship Electronics Ship Repair Ship Simulators Shipbuilding / Vessel Construction
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2734 sec (4 req/sec)