Charlotte, NC, and Houston, TX, May 22, 2006 — Duke Energy announced an agreement to acquire an approximately 825 megawatt power plant located in Rockingham County, NC, from Dynegy for approximately $195 million.
The plant, which went into operation in 2000, consists of five 165 megawatt Westinghouse combustion turbine units capable of using either natural gas or oil to operate.
The acquisition is consistent with Duke Energy’s Integrated Resource Plan, which describes the company’s plan to meet customers’ electricity needs over the next twenty years. Under that plan, Duke Energy recently conducted a competitive “Request for Proposals” (RFP) bidding process for peaking capacity to meet growing customer demand for electricity in North Carolina and South Carolina.
“We received a number of bids related to our recent RFP,” said Duke Energy Carolinas president Ellen Ruff. “As we looked at the needs of our customers and our system and the cost of meeting those needs, it was clear the best overall deal was an outright purchase of the Rockingham plant.
The transaction, anticipated to close by year-end, requires North Carolina Utilities Commission, Federal Energy Regulatory Commission and Hart-Scott- Rodino approvals.
The Rockingham plant is located north of Greensboro within Duke Energy’s North Carolina service area. It is a peaking power plant — used during times of high electricity demand, generally in the winter and summer months.
Also, Dynegy Inc. announced that it plans to make a public offering of approximately 35 million shares of its Class A common stock pursuant to an effective shelf registration statement on Form S-3 previously filed with the Securities and Exchange Commission.
Dynegy has granted the underwriters a 30-day option to purchase up to an additional 5,250,000 shares. J.P. Morgan Securities Inc. and Lehman Brothers Inc. will act as joint book-running managers for the offering.
Dynegy intends to use the net proceeds from the offering, together with approximately $250 million in cash on hand, to redeem all of its outstanding Series C Convertible Preferred Stock (Series C preferred) at its aggregate liquidation preference of $400 million, plus accrued and unpaid dividends, and to pay related fees and expenses. The Series C preferred is convertible into 69.2 million shares of Dynegy’s common stock, all of which are included in Dynegy’s fully diluted share count for fully diluted earnings-per-share calculations.
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