Dynegy Inc has completed the purchase from Exelon Corporation of all the outstanding capital stock of ExRes SHC Inc, the parent company of Sithe Energies.
Through the acquisition, Dynegy has added to its power generation portfolio the 1,021-megawatt, combined-cycle Independence power generation facility located near Scriba, New York, four natural gas-fired merchant facilities in New York and four hydroelectric generation facilities in Pennsylvania.
The power generation assets acquired through the transaction will increase Dynegy’s net generating capacity in the Northeast to more than 3,000-megawatts.
In addition to the power generation assets, the acquisition includes a 750-megawatt firm capacity sales agreement with Con Edison, a subsidiary of Consolidated Edison Inc, through to 2014. The capacity sales agreement will provide annual cash receipts of approximately $100 million.
The completion of this transaction provides multiple strategic and financial benefits for Dynegy, including the addition of new generation capacity in an attractive US region where the company has a strong, existing presence and the mitigation of a legacy tolling agreement that minimizes corporate cash outflows, said Bruce Williamson, chairman, president and CEO of Dynegy.
In addition, the debt obligations associated with the acquisition are largely covered by a long-term capacity contract with an investment-grade counterparty, enabling Dynegy to maintain its disciplined focus on capital expenditures that are in the best interest of our shareholders, he added.