Billions of dollars of power

Dynegy, the parent company of the Decatur, IL-based utility Illinois Power Company, has entered into an agreement with Exelon through which Exelon will acquire substantially all of the assets and liabilities of Illinois Power.

The assets included in the transaction consist of approximately 40,000 miles of electric transmission and distribution lines, more than 750 miles of natural gas transmission pipe and 7,600 miles of natural gas distribution lines. Illinois Power has more than 1,800 employees and approximately 590,000 electricity customers and 415,000 natural gas customers across northern, central and southern Illinois.

Under the terms of the agreement, which has been approved by each company’s board of directors, Exelon will acquire Illinois Power for $2.225 billion. The purchase price includes the assumption of all of Illinois Power’s debt, estimated to be approximately $1.8 billion at closing, a $150 million promissory note and approximately $275 million of cash, subject to working capital adjustments.

In a related agreement that is conditional upon the closing of the transaction, Dynegy has contracted to sell 6,000 MWs of generating capacity to an Exelon subsidiary for six years beginning in January 2005.

The sale is also conditional upon approvals from the Illinois Commerce Commission, the US Federal Energy Regulatory Commission, the US Securities and Exchange Commission and other US governmental and regulatory agencies. Pending these and other approvals, the acquisition is expected to close in the fourth quarter of 2004.