NRG, Dynegy Swap for West Coast Power

NRG Energy will buy out Dynegy's 50 percent share of the West Coast Power joint venture, which owns 1,808 MW of generation in Southern California. NRG will pay $160 million and hand over to Dynegy its 50 percent share in a 330 MW Illinois peaking plant it co-owns with Dynegy. Acquiring 100 percent interest in West Coast Power "provides us with the flexibility to implement our strategic options for this region," David Crane, NRG president, stated. An option for NRG appears to be the potential sale of the beachfront property that hosts two of the four power plants. NRG "plans to pursue appropriate market returns . . . and/or monetizing the real estate value," Crane noted. West Coast owns the 670 MW El Segundo and the 965 MW Cabrillo gas-fired plants. Both sit on the Southern California coast. NRG's shuttered Long Beach facility is surrounded by the Port of Long Beach. It also has 13 peaking units throughout the San Diego region. NRG's purchase of Dynegy's share in West Coast requires Federal Energy Regulatory Commission approval. The day after the sale was announced, FERC signed off on NRG's purchase of Texas Genco. Although a consortium of equity firms bought the Texas company for $900 million one year ago, NRG agreed to pay $5.8 billion for it. On January 5, NRG launched a $1.5 billion securities sale to finance its Texas Genco purchase. Its offerings will also include $3.6 billion in unsecured notes, according to an NRG statement. Elsewhere, Dynegy agreed December 23 to pay $370 million to terminate tolling agreements held with GE Energy Financial Services and Cogentrix. Dynegy chair Bruce Williamson said the company was "wholly focused on the sale of electricity generated by company-owned power assets to serve our market and customers with reliable delivery of electricity."

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NRG, Dynegy Swap for West Coast Power

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