Dynegy finds another salvage specialist buyer for Danskammer

Dynegy Danskammer LLC applied Sept. 9 at the Federal Energy Regulatory Commission for a quick approval of the sale of the “inoperable” Danskammer power plant to demolition specialist Helios Power Capital LLC.

Dynegy Danskammer would initially acquire legal and beneficial title to Units 3 and 4 at the Danskammer plant from a passive lessor and then sell them, together with the other units at the plant and certain associated assets (which Dynegy Danskammer already owns), to Helios Power Capital. Dynegy Danskammer asked that the commission issue an order approving the transaction on or before Oct. 24.

In September 2012, a federal bankruptcy court entered an order confirming a joint plan of reorganization for Dynegy Inc. (NYSE: DYN) and Dynegy Holdings. As contemplated by the plan, an auction of Dynegy Danskammer’s generating facilities commenced in November 2012, and Dynegy Danskammer entered into an agreement to sell the facilities to the winning bidder in that auction. When that entity failed to consummate the transaction by the deadline prescribed by the court, Dynegy Danskammer and its affiliated debtors then picked Helios as the replacement buyer. The sale to Helios was subsequently approved by the bankruptcy court.

Dynegy Danskammer is an exempt wholesale generator (EWG) with market based-rate authority that leases Danskammer 3 and 4, which are coal-fired facilities with a net capacity of about 373 MW (summer rating), and associated interconnecting transmission facilities from Danskammer OL. Dynegy Danskammer also owns and operates the remaining units at the Danskammer plant, which are two oil- and natural gas-fired units with a net capacity totaling about 130 MW (Units 1 and 2) and two emergency diesel generators (Units 5 and 6) each with a net capacity of around 2.5 MW, as well as the interconnecting transmission facilities associated with those units. The Danskammer plant, located in Newburgh, N.Y., is interconnected with the New York Independent System Operator (NYISO) grid.

The Danskammer plant is currently inoperable, the company noted. On Jan. 3, Dynegy Danskammer filed a notice of intent to retire the station with the New York State Public Service Commission.

On Oct. 29, 2012, Danskammer Units 1-4 were flooded due to high water from Super Storm Sandy. Units 5 and 6 were not exposed to the flood water, but the power transformer for these generators was damaged by the flood. The storm damage basically sealed the fate of the aging and already troubled facility.

Helios is a Texas limited liability company that specializes in capturing the value of power generation assets at any point in the course of their life cycle, including through demolition and salvage and site redevelopment, Dynegy Danskammer noted. Neither Helios nor any of its affiliates owns or controls operational generation or transmission facilities in the NYISO market or in any market first-tier to the NYISO market. “Helios intends to demolish the Danskammer Generating Station once it acquires ownership,” Dynegy Danskammer added.

The contact information for Helios is: Helios Power Capital LLC, 5005 Riverway Drive, Suite 440
, Houston, Texas 77056, Attention: Trey Helle,
 E-mail; thelle@heliospowercapital.com.

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.