NRG Energy has entered into a definitive agreement to acquire six power generation facilities from Texas-based Rockland Capital, LLC, adding 738 megawatts (MW) of natural gas-fired capacity to its portfolio.
The acquisition includes one combined-cycle unit and five peaker units. NRG is acquiring these assets for $560 MM or $760 per kW, which the company described as “significantly below” the cost of new construction. The acquisition is earnings-accretive and will be primarily funded through corporate debt, with no impact on the company’s stated capital allocation plan.
“This acquisition reinforces our position as a leading generator in Texas,” said Robert J. Gaudette, the executive vice president and president of NRG business and wholesale operations. “Expanding our natural gas generation portfolio with modern, flexible assets enhances our integrated platform as Texas experiences record electricity growth driven by electrification, onshoring, population growth, and data centers – creating long-term value for our shareholders.”
The acquisition is subject to Hart-Scott-Rodino (HSR) regulatory approval and is expected to close in the second quarter of 2025.
Last summer, NRG submitted the first of three loan applications to the Texas Energy Fund (TEF) to develop the previously announced 1,600 MW of new quick-start natural gas power generation in the Electric Reliability Council of Texas (ERCOT). The TEF is administered by the Public Utility Commission of Texas (PUCT).
This first application is for a new 721 MW natural gas combined-cycle unit at NRG’s Cedar Bayou plant in Baytown, Texas. In the coming weeks, the company plans to submit applications for two quick-start natural gas peaking projects near Houston: the 455 MW project at TH Wharton and the 456 MW unit at Greens Bayou.
NRG anticipates that these three projects will be capable of supplying power to customers in under 30 minutes. Completion of these projects is contingent upon timely loan approvals from the PUCT and tax abatements by local authorities.
“Texas is projected to have the fastest growing electricity sector of any market in the United States,” Larry Coben, NRG chair, interim president and CEO, said last summer. “The state expects electricity consumption to grow by 65 gigawatts, or nearly 77% through 2030. NRG urges advancement of any truly shovel-ready projects to meet the demands of the state’s growing and electrified economy. Our three shovel-ready projects have been in development for five years and are among the select few projects positioned to bring much needed flexible and dispatchable generation to the state this decade.”
