FERC OKs Illinova-Dynegy Merger
FERC last week approved the proposed merger of Illinova Corp.
and Dynegy Inc., saying the $2 billion deal posed no competitive
concerns. It noted "there is insufficient 'overlap' between
relevant upstream delivered gas and downstream electricity
markets...to raise significant competitive concerns." Also, the
transaction "does not enhance the merged company's incentive to
raise its rivals' costs because it has a relatively small share of
the relevant downstream electricity markets."
Before the merger can close, FERC still must okay the sale of
Illinova's Clinton Power Station, a 930 MW nuclear facility, to
AmerGen Energy; the Nuclear Regulatory Commission must approve the
transfer of the plant's license; and "additional approvals" are
needed from the Illinois Commerce Commission with respect to the
gas aspect of the merger. Dynegy also has to complete the sale or
restructuring of its interests in certain qualifying facilities.
The companies expect to complete the transaction during the first
quarter of next year.
The merged company, which will retain the Dynegy Inc. name, will
have generation plants with more than 14,000 MW of capacity,
natural gas sales in North America of 9.1 Bcf/d, and will serve
more than 950,000 retail customers.
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