Business

Duke closes $2.8 billion sale of power plants in Midwest

Duke Energy has closed a $2.8 billion cash deal to sell its interest in 11 power plants in the Midwest to Houston-based Dynegy.

The sale of the nonregulated plants also includes a regulated business in Ohio, Duke Energy Retail Sales. The sale agreement had been announced last August.

Duke will use $1.5 billion from the sale to buy back company stock. The rest will be used to pay down debt and pay for capital projects this year.

The sale is expected to add to Duke’s earnings per share within a year of the closing, the company said.

“This transaction allows Duke Energy to sharpen our focus to better meet our customers’ needs, while creating long-term value for our investors,” CEO Lynn Good said in a statement.

The deal includes 11 merchant plants in Ohio, Illinois and Pennsylvania with a combined capacity of 6,100 megawatts. Their energy flows to the PJM wholesale power market, which operates in 13 states and the District of Columbia.

Duke Energy Ohio had fully or partially owned the plants. Duke’s regulated utilities in Ohio and Kentucky aren’t part of the sale.

Duke said in February that it would sell the Midwest plants, which have been buffeted by competitive markets that made profits volatile. That announcement followed Ohio’s denial of a new pricing mechanism.

The Federal Energy Regulatory Commission approved the sale in late March. Questions over the market impact of the sale had delayed its expected close in February.

Henderson: 704-358-5051;

Twitter: @bhender

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