Power company buying up nine US plants

Power generation company LS Power is buying nine US power plants from one-time partner Dynegy for around $1 billion.  Under the terms of the deal, which is expected to be announced today, New York-based LS Power will also return around $500 million in shares to wholesale power generator Dynegy. It will also give up its three seats on the Dynegy board and agree to a freezing of its share percentage at only 15 percent, down from the 40 percent it originally held. Houston-based Dynegy will use cash generated by the deal to repay some of its debt. It will sell its plants in Kentucky, Illinois, Michigan, Arizona and Connecticut, as well as an uncompleted plant in Texas. The deal will leave it with 20 plants, mostly powered by coal or gas. The two companies were involved in a joint venture in 2006 that was expected to create the countryÔÇÖs largest developer of coal-fired power plants.  The recession has caused a slump in power generation needs in the US, and with it a lack of demand for the construction of new plants. LS Power has said it expects power demand to return when the economy recovers, which will increase the value of the plants it has purchased. The new deal is expected to close in the fourth quarter.┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á *┬á ┬á┬á┬á┬á┬á*