By Ted Caddell

The Federal Energy Regulatory Commission on Friday approved Dynegy’s purchase of 12,500 MW of generation from Duke Energy and Energy Capital Partners, the final approval needed for both deals (EC14-141, EC14-140).

The $3.45 billion ECP deal is scheduled to close Wednesday, while the $2.8 billion Duke acquisition will close Thursday.

With the two deals, Dynegy — which emerged from bankruptcy less than three years ago — has boosted its total ownership to nearly 26,000 MW of generation.

Dynegy will own 11 Duke generating units in Ohio, Illinois and Pennsylvania totaling about 6,100 MW, as well as Duke Energy Retail Sales, its competitive retail business in Ohio. The ECP deal gives Dynegy 10 generators totaling 6,400 MW, primarily in the Midwest and New England.

Dynegy would gain about 9,000 MW in PJM, boosting it to more than 10,700 MW and eighth in generation share in the RTO.

A New Player in New England

The ECP deal also makes Dynegy a major player in the ISO-NE market, where it had been the owner of a single 540-MW natural gas plant in Maine. (See Dynegy Back in the Game with Duke, ECP Acquisitions.)

Dynegy expected to close the deal with Duke by the end of last year, but it missed that deadline while it was addressing market power concerns from PJM’s Independent Market Monitor. Those concerns were resolved in a settlement last month, with Dynegy agreeing it would not try to buy any of the plants that will come on the market as a result of the PPL-Riverstone Holdings deal to form Talen Energy. It also committed to offer all of its units into the PJM capacity market auctions and promised it wouldn’t retire any units unless they failed to clear. (See Dynegy, PJM IMM Reach Settlement on Duke, Energy Capital Partners Deal.)

No Market Power Concerns

In approving the deals, FERC said it saw no market power concerns in either ISO-NE or PJM. It said Dynegy’s share of New England’s energy market would rise as high as 17.7% and its share of the region’s capacity market would be 9.4%.

The commission also rejected a complaint by Utility Workers of America Local 464 that the transaction would enable Dynegy to raise New England capacity prices due to its acquisition of ECP’s Brayton Point Station, which is scheduled for retirement in 2017.

The commission said Brayton Point’s closure was beyond the scope of its review of the ECP transaction and that the union did not explain how it derived the price increases it claimed would result from the a reduction in offered capacity.

“As the commission has explained, its authority to condition [asset sale] authorizations is limited to addressing specific, transaction-related harm,” FERC said. “The issues raised by UWA Local 464 are related to the retirement of the Brayton Point Station, which the commission has already reviewed, rather than the proposed transaction.”

More Deals on the Way?

The Houston-based merchant generator has indicated it is looking to expand its fleet still further. A Dynegy executive told Columbus Business First last month that the company “would be very interested” in American Electric Power’s coal plants in Ohio. AEP, which failed in its initial bid to secure a power purchase agreement for one of its Ohio coal plants, has hired investment bank Goldman Sachs Group to investigate the sale of its coal-fired fleet. (See AEP Considering Sale of 8,000 MW in Ohio, Indiana.)

Those plants, with a combined capacity of 7,875 MW, are in Ohio, except for the 1,186-MW Lawrenceburg plant in Indiana. Some 2,100 MW of the plants Duke is selling to Dynegy are partially owned by AEP already, and Dynegy has said it would make sense to consider acquiring AEP’s share.