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The acquisitions will also help Dynegy to reduce its overhead costs by 34% to <br />$1.10 per MW hour of electricity produced. <br />Looking Back <br />Dynegy suffered a major setback in 2011 when the booming shale drilling <br />created a supply glut of natural gas that depressed prices and led to losses. In <br />2012, gas prices deceased to a 10 -year low, below $2 per million British thermal <br />units. <br />Burdened by costly power plant leases, Dynegy finally came out of bankruptcy in <br />2012. Since then the company took the inorganic route to spur growth, acquiring <br />five coal-fired power plants in Illinois from Ameren Corp. (AEE - Analyst Report) in <br />December last year. <br />Conclusion <br />The proposed buyouts will increase Dynegy's risks associated with the supply of <br />the industry's major fuel — natural gas. Moreover, the unregulated electricity <br />operations are exposed to descending prices as well as demand in the U.S. <br />That said, in a deregulated electricity business, utility companies are <br />consolidating and shifting toward more gas-fired power production given stringent <br />environmental regulations. Global concerns about the pitfalls of green -house gas <br />emissions supported by increasing restrictions on fossil -fuel usage have brought <br />a wide array of fuel sources like gas into the limelight. <br />Increased demand for gas -fueled generation is helping to push up gas prices. <br />Hence, the deals are a strategic fit giving a much needed boost to Dynegy's fuel <br />mix from its predominantly coal -based fleet now. <br />