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Texas company to buy Masontown plant

By Eric Morris emorris@heraldstandard.Com 4 min read
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Roberto M. Esquivel|Herald-Standard

This August 2014 photo shows the entrance to Fayette Energy Facility in German Township. Dynegy Inc., a Houston-based energy company, purchased the plant and 10 other facilities in Ohio and Illinois from Duke Energy as part of a $2.8 billion acquisition. The sale was finalized April 2.

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Roberto M. Esquivel|Herald-Standard

This file photo shows the entrance to Duke Energy in German Township.

A Houston-based energy company is set to purchase a natural gas-fired power plant in German Township as part of a $2.8 billion acquisition of a portfolio consisting of 11 generating plants.

Dynegy Inc. announced Aug. 22 that it will buy Fayette Energy Facility and 10 other facilities in Ohio and Illinois from Duke Energy, the largest electric power holding company in the nation.

The facility, a natural gas-fired, combined-cycle plant located just outside of Masontown with a 620 megawatt generating capacity, opened in May 2003 and produces enough to power about 500,000 homes.

According to Dynegy spokeswoman Katy Sullivan, the jobs of the workers currently employed at the plant are safe, for now.

“This fleet of facilities was attractive to us because they are well run and have the personnel in place to properly run them,” said Sullivan. “We are committed to honoring the labor agreements when it comes to overall personnel who are contracted through the local labor unions.”

Sullivan indicated that Dynegy will monitor the activity at Fayette Energy Facilities once the power plant comes under the company’s control, and will adjust accordingly.

“We’ll look at the staff in place. We’ll take a closer look following transaction close to see if any changes need to be made,” she said.

The exact number of employees at Fayette Energy Facility was not available, but a plant of its size typically employs between 15 and 25 full-time workers, said Tom Williams, a spokesman for Duke.

“The Duke … employees are committed, hard-working men and women and we look forward to engaging their expertise and talent in the combined business,” Dynegy president and CEO Robert C. Flexon said in a press release.

Flexon called the acquisition an “exceptionally high quality” portfolio that is well-managed and run by Duke employees.

Fayette Energy Facility is situated near the east bank of the Monongahela River — directly across from the recently-closed Hatfield’s Ferry Power Station — and consists of two natural-gas fired turbines, two heat recovery steam generators and one steam turbine operating in combined-cycle mode.

Ground broke on the 300-acre site in February 2002 as a $420 million investment by Duke. It employed 25 full-time workers at the time of its opening.

In addition to Fayette Energy Facility, the purchase by Dynegy includes nine facilities in Ohio and one in Illinois. Five of the plants burn natural gas, five burn coal and one burns oil.

The transaction affects about 500 employees at the 11 power plants included in the deal, said Williams.

Dynegy will also acquire Duke Energy Retail Sales, the company’s competitive retail business in Ohio.

Duke, which is headquartered in Charlotte, N.C., announced in February its intent to sell its stock of gas, coal and oil burning electric power generation plants — including its Fayette County facility.

The company cited inconsistent and unstable earnings in the power generation market as the reason for the sale.

“This transaction is an important milestone in our strategy to exit the merchant generation business,” said Marc Manly, president of Duke Energy’s Commercial Businesses.

“In the coming months, we will continue to safely operate these plants and work closely with Dynegy to obtain the regulatory approvals necessary to close the transaction,” Manky said in a press release. “We will also be working with employees and community leaders to ensure a smooth transition for all stakeholders.”

According to Duke, the completion of the transaction is conditioned on approval from the Federal Energy Regulatory commission, the expiration of the Hart-Scott Rodino Act and the release of certain credit support obligations.

Duke said it expects the deal to close within three to six months.

In a separate deal, Dynegy will be acquiring ten additional generating facilities from Energy Capital Partners for $3.45 billion.

The two acquisitions will double Dynegy’s generating capacity to 26,000 megawatts, putting it on par with the nation’s third-largest competitive generator company.

Dynegy said it expects the two deals to close by the end of the first quarter of next year.

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