FERC last week approved the proposed merger of Illinova Corp.and Dynegy Inc., saying the $2 billion deal posed no competitiveconcerns. It noted “there is insufficient ‘overlap’ betweenrelevant upstream delivered gas and downstream electricitymarkets…to raise significant competitive concerns.” Also, thetransaction “does not enhance the merged company’s incentive toraise its rivals’ costs because it has a relatively small share ofthe relevant downstream electricity markets.”

Before the merger can close, FERC still must okay the sale ofIllinova’s Clinton Power Station, a 930 MW nuclear facility, toAmerGen Energy; the Nuclear Regulatory Commission must approve thetransfer of the plant’s license; and “additional approvals” areneeded from the Illinois Commerce Commission with respect to thegas aspect of the merger. Dynegy also has to complete the sale orrestructuring of its interests in certain qualifying facilities.The companies expect to complete the transaction during the firstquarter of next year.

The merged company, which will retain the Dynegy Inc. name, willhave generation plants with more than 14,000 MW of capacity,natural gas sales in North America of 9.1 Bcf/d, and will servemore than 950,000 retail customers.

Susan Parker

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