Dynegy adding capacity at several gas-fired power plants

Dynegy (NYSE: DYN) said in its Nov. 5 quarterly Form 10-Q report to the SEC that its gas segment is adding new capacity through incremental additions at several power plants.

The gas segment is comprised of 19 power generation facilities within PJM Interconnection (7,081 MW), California ISO (2,694 MW), ISO New England (2,440 MW) and New York ISO (1,108 MW) regions, totaling 13,323 MW of generating capacity.

  • In PJM, Dynegy is installing a total of 260 MW of energy and capacity, which will be accomplished primarily through upgrades to the hot gas path components of combined cycle gas turbines.  The uprates start in fall 2015 at the Hanging Rock facility and are expected to be completed in the spring of 2017 at Liberty Electric.
  • In New England, Dynegy has qualified 70 MW of new uprates for participation in Forward Capacity Auction-10, which covers Planning Year 2019-2020.
  • In New York, during 2016 the company will be installing 45 MW of additional energy and capacity at the Independence facility.

Dynegy also reported that in October 2015, it contracted resource adequacy (RA) capacity with Southern California Edison for Moss Landing units 1 and 2 for 575 MW, 400 MW, and 850 MW, for calendar years 2017, 2018, and 2019, respectively.

In its 2015 Gas Transmission and Storage rate case, which will set gas transportation rates for 2015-2017, Pacific Gas & Electric’s (PG&E) proposed revenue requirements and allocation proposals would result in a significant increase in the rates for electric generators served by the local transmission system, including Dynegy’s Moss Landing Units 1 and 2, Dynegy said. Historically, after PG&E’s gas transportation rate structure was changed to unbundle the Backbone Transmission System (BB) rates, PG&E gas transmission and storage rate case settlements have included a bill credit for Moss Landing Units 1 and 2 that effectively reduces the differential between rates for BB and local transmission system service, allowing the plant to compete against other power generators.

However, said Dynegy, according to PG&E’s own estimates, the rate differential between BB and local transmission system rates PG&E proposes in its 2015 proceeding would result in Moss Landing Units 1 and 2 likely experiencing a decline in dispatch hours. Dynegy said it is actively participating in the hearing process before the California Public Utility Commission (CPUC) and is advocating positions that would maintain the ability of Moss Landing Units 1 and 2 to compete in California electricity markets. A post-hearing briefing concluded in May 2015, and oral argument was held on Oct. 28. A decision is expected in late 2015.

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.