With its restructuring “virtually done,” Dynegy Inc. will begin to focus on organic growth and “opportunistic expansion” around its primary power generation businesses in the Midwest and New York, CEO Bruce Williamson said at the company’s annual shareholder meeting on Wednesday.

Williamson said the company is once again considering expanding its largest power plant, its coal-fired facility in Baldwin, IL. The 1,806 MW plant is Dynegy’s “best performer,” and permits obtained for an expansion, which was postponed a few years ago, remain active, he said. Dynegy also may consider buying “fixer upper” generation plants in the Midwest.

COO Stephen Furbacher noted Dynegy’s now has a “straightforward manufacturing business model” making it a pure-play power producer. Its current portfolio is 33% baseload, 18% intermediate and 49% peaking plants, which are 53% natural gas, 30% coal/oil and 17% dual-fuel facilities.

Asked whether Dynegy might be interested in purchasing some of bankrupt Calpine Corp.’s facilities when they become available, Williamson said it was “kind of early right now” to know. As far as buying other facilities, Williamson said if Dynegy finds “a good growth opportunity, a good user of our cash,” the company may consider a purchase. However, he noted it took the company “time to turn things around,” and anything purchased would have to be done for the benefit of all of the shareholders.

Earlier this month, RBC Capital Markets analyst Lasan Johong upgraded Dynegy to “outperform” from “sector perform” on better-than-expected 1Q2006 results within its commercial operations group. Johong noted Dynegy reduced its 2006 earnings forecast based on softer prices for natural gas.

“We believe that investors will come around to better appreciating the simple yet elegant strategy that Dynegy is employing to deliver shareholder value,” Johong said. “However, under the current strain of low natural gas prices, the strength of the company’s strategy is being obscured.” The analyst raised the price target on Dynegy to $7/share from $5.

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