The USA’s Federal Energy Regulatory Commission (FERC) has granted conditional approval of Dynegy’s acquisition of ENGIE’s power generation unit, but said that the company may have to sell some generation in ISO New England and the RTO PJM to address market power concerns in the regions’ capacity markets.
FERC’s order found the $3.3 billion acquisition for 9 GW of generation assets will not have an adverse effect on competition in NYISO, MISO, CAISO, nor in the PJM or ISO-NE energy or ancillary services markets. However, FERC said that it was concerned the transactions could harm capacity market competition in PJM’s Commonwealth Edison locational deliverability area and ISO-NE’s Southeast New England (SENE) capacity zone. FERC said that existing market power concerns in ISO-NE would be exacerbated by the acquisition absent mitigation.
The sale also includes the sale of ENGIE’s plants in ERCOT, which are not subject to FERC jurisdiction.
FERC said mitigation was necessary through either a plant sale or a commitment to keep certain plants operating. To proceed with the transaction, Dynegy must submit a compliance filing detailing its mitigation plan within 30 days.