Selling power

Dynegy has entered into a new, 15-year agreement through which it will sell electricity and steam generated by the company’s CoGen Lyondell Power Generation Facility to Lyondell Chemical Company.

Under the terms of the agreement, which will become effective on January 1, 2007, Dynegy will provide the Lyondell chemical manufacturing complex with 70 megawatts of electric supply capacity and approximately two million pounds of steam per hour. The remaining power generated by the plant will continue to be marketed in the Electric Reliability Council of Texas (ERCOT) region.

Dynegy’s CoGen Lyondell facility, located in Channelview, Texas  is a natural gas-fired, 610-megawatt combined-cycle plant that entered commercial operation in 1985 as a qualifying facility under the Public Utility Regulatory Policy Act. The facility, which consists of six 80-megawatt combustion turbines and a 130-megawatt steam turbine generator, has 35 employees.

Separately, Dynegy recently announced the sale of its Midstream natural gas business to Targa Resources for $2.475 billion in cash. The proceeds from the transaction, which is expected to close in the fourth quarter of 2005, will help the company reduce debt.