Houston-based Dynegy Inc. has entered into an agreement to purchase from Exelon Corp. all of the outstanding shares of ExRes SHC Inc. Through the acquisition, Dynegy will acquire a 1,042-megawatt, 7,211-Btu heat rate, combined-cycle independence power generation facility near Scriba, N.Y., four natural gas-fired merchant facilities in New York, and four hydroelectric generation facilities in Pennsylvania.
As a part of the deal, Dynegy will also acquire controlling interest in a 750-megawatt firm capacity sales agreement with Con Edison, a subsidiary of Consolidated Edison Inc. The sales agreement, which runs through 2014, provides annual cash receipts to Dynegy of about $100 million. The financial terms of the agreement include the payment by Dynegy of $135 million and the consolidation of $919 million in project debt, and Dynegy projects that the principal and interest payments related to the consolidated debt will be substantially funded through 2014 by the proceeds from the long-term capacity sales contract with Con Edison.
The deal is the first major purchase that Dynegy has made since it underwent a massive restructuring in 2002. That restructuring was prompted by the crisis in the energy trading industry that followed industry leader Enron‘s spiral into bankruptcy in late 2001.