Although the second quarter was challenging in some respects, Dynegy (NYSE:DYN) continues to represent an increasingly pure play on the power market. Whether that's a good thing or not depends largely on your risk tolerance and point of view.

For this second quarter, the independent power producer reported that total revenue was down 4% as average power prices fell 2% and net volumes declined 16%. Revenue isn't typically something that a lot of investors in this space focus on, but the underlying fact that pricing and production were both down is relevant in my book.

Though fuel oil prices were up about 24% from last year (Dynegy does have plants that use fuel oil), overall EBITDA nevertheless rose 29% and power generation EBITDA climbed 59%. Looking at guidance, management did bump up the bottom of the range slightly but also lowered the top end, taking the mid-point of guidance (for EBITDA) down about 2%.

I can appreciate how the world of independent producers like Dynegy, NRG Energy (NYSE:NRG), Mirant (NYSE:MIR), and Reliant (NYSE:RRI) could all coalesce into a jumble. So, here's the gig on Dynegy as this Fool sees it: Dynegy is essentially a long natural gas position -- the company isn't looking to hedge production, and that both frees up cash flow and exposes the company to the movements of the power market (good or bad). The company also has a pretty sizable position of gas-fired peaking plants -- assets whose value goes up rapidly when power reserves get tight.

As something of a play on natural gas, investors do need to be aware of the impact of high gas storage levels and the risk of lower spark spreads in the future. That said, the expiry of a contract with Ameren (NYSE:AEE) should be helpful, and the power market as a whole seems pretty favorable these days.

Personally, I'm not a huge fan of the stock right here. That's mostly due to takeover speculation that I feel has taken some of the margin of safety out of the shares. Nevertheless, if you're a believer in higher spark spreads, particularly in the Midwest, Dynegy is most likely worth a look.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).