Dynegy to buy power plants from Duke, Energy Capital

Dynegy Inc. announced Friday it would spend $6.25 billion to nearly double its electricity generating capacity through power plant deals with Duke Energy Corp. and Energy Capital Partners.

Dynegy will buy 11 power plants and a retail business from Duke for $2.8 billion in cash, Bloomberg News reported. It will also spend $3.45 billion in cash and stock for units from Energy Capital, a private equity firm.

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The deals represent a bet that energy prices in the Northeast and New England could increase, like they did in last winter’s extreme cold, Bloomberg said. It marks a shift toward competing in the wholesale energy market.

“The combined portfolio will now have approximately 60 percent of total megawatts located in these two markets as compared with Dynegy’s 18 percent today,” Robert Flexon, Dynegy’s chief executive officer, told reporters in a conference call, Bloomberg reported.

Dynegy will own about 26,000 megawatts of generating capacity after the deals, moving it near the second-largest owner of power plants in the country, Calpine Corp.