NRG Energy (NYSE:NRG) said April 8 that it has paid roughly $244m to acquire a 560-MW cogeneration power plant in Corpus Christi, Texas.
NRG has entered into an agreement with a consortium of affiliates of Atlantic Power, John Hancock Life Insurance (U.S.A.), and Rockland Capital the Gregory cogeneration plant. The cogeneration plant is equivalent to an approximately 560 MW combined cycle gas turbine plant with generation capacity of approximately 400 nominal MW and steam capacity of more than a million pounds per hour (160 MW of electricity equivalent).
Prior to this sale, the NRG website already lists the independent power provider as having 14 projects in ERCOT with a combined generating capacity of roughly 10,700 MW. While baseload is not broken out separately, the company has more than 5,300 MW of coal and nuclear generation in ERCOT, an NRG spokesperson said April 8.
In announcing the deal, NRG stressed its fast start-up potential.
“The addition of what is, in effect, a six heat rate, fast start, gas-fueled plant at a significant discount to replacement cost is an invaluable addition to our Texas fleet, particularly at this time with market rules and supply conditions in Texas placing a premium on flexible operations,” said NRG President and CEO David Crane in a statement.
The Gregory cogeneration plant provides steam, processed water and a small percentage of its electrical generation to the Corpus Christi Sherwin Alumina plant. The majority of the baseload generation is available for sale in ERCOT. This adds greater NRG capacity in ERCOT’s south zone, where the company currently serves significant retail load and looks to continue to expand its customer base in this growing part of the state. The Gregory cogeneration unit came online in 2000.
“The Gregory plant’s long-term steam contract and additional generation in a zone where NRG sees significant growth potential complements our wholesale and retail positions in the State exceptionally well,” said John Ragan, president of NRG’s Gulf Coast region. “Adding Gregory to NRG’s existing portfolio of cogeneration and combined cycle plants also increases our ability to share expertise and best practices across Texas and the nation.”
The transaction is subject to customary closing conditions including Hart Scott Rodino pre-merger notification clearance and approval from Public Utility Commission of Texas, as well as third party consents. The transaction is expected to close in the third quarter.
Atlantic Power owns slightly more than 17% of the Gregory project, according to its website. In March, Atlantic Power announced an agreement to sell its share of the Path 15 transmission project.
Following its recent merger with GenOn, the independent power producer NRG now has more than 47,000 MW of generating capacity across the nation. NRG is also pursuing a major carbon capture and sequestration (CCS) project at its W.A. Parish fossil plant in Texas. In Marc, the Department of Energy (DOE) released an environmental impact statement (EIS) on the project.