Dynegy does deals to sell New York plants to two buyers

Dynegy Inc. (NYSE:DYN) said Dec. 10 that the winning bidders are ICS NY Holdings LLC (ICS) and Louis Dreyfus Highbridge Energy LLC (LDH Energy) for the coal-fired Danskammer and gas-fired Roseton capacity, respectively.  

The bidding was the result of a U.S. Bankruptcy Court-supervised auction process for the Roseton and Danskammer facilities located near Newburgh, N.Y. The combined cash purchase price for the two winning bids is $23m and the assumption of certain liabilities. Dynegy filed a notice with the court on Dec. 10 seeking approval of the sales during a hearing scheduled for Dec. 21. The sale will close upon the satisfaction of certain closing conditions and the receipt of any necessary regulatory approvals.

Roseton will be sold to LDH Energy for $19.5m in cash and LDH Energy’s assumption of certain liabilities, including outstanding tax liabilities. LDH Energy has agreed to operate under the terms of the expired union labor contract, as modified by the unilaterally implemented “last, best and final” offer made to the union on Nov. 7.

Danskammer will be sold to ICS for $3.5m in cash and ICS’ assumption of certain liabilities. Danskammer, which was rendered inoperable as a result of Superstorm Sandy, will be retired upon completing the appropriate regulatory processes. Following closing of the sale and retirement notification process, ICS will demolish any remaining structures and remediate the site.

Parent Dynegy emerged from bankruptcy protection earlier this year, but left behind the Roseton and Danskammer capacity for sale in the court process.

Danskammer Units 3 and 4 have a net capacity of 373.4 MW. They use coal and natural gas as their primary fuels, with Peabody Energy (NYSE: BTU) and bankrupt Patriot Coal having been major coal suppliers recently to the units. Roseton Units 1-2 are gas-fired peakers with a net capacity of 1,200 MW.

Dynegy indicated at one point to the bankruptcy court that Danskammer Units 3 and 4 face a heavy spend to install needed emissions controls and that planning had been done to convert them to natural gas.

The Danskammer and Roseton units are connected to the Northeast Power Coordinating Council, one of the 10 regional reliability councils that form the North American Electric Reliability Council. They compete primarily in the New York wholesale market of the New York ISO.

Dynegy’s subsidiaries produce and sell electric energy, capacity and ancillary services in key U.S. markets. The Dynegy Power LLC power generation portfolio consists of approximately 6,771 MW of primarily natural gas-fired intermediate and peaking power generation facilities. The Dynegy Midwest Generation LLC portfolio consists of approximately 3,132 MW of primarily coal-fired baseload power plants. The DNE portfolio, which was involved in this sale effort for Danskammer and Roseton, consists of approximately 1,693 MW from two power plants which are primarily natural gas-fired peaking and baseload coal facilities. 

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.