NRG Energy (NYSE: NRG) said Aug. 7 that it has closed on the acquisition, first announced in April, of the Gregory cogeneration plant in Corpus Christi, Texas.
The 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 equivalent). NRG is paying about $244m in cash for the plant, exclusive of adjustments relating to working capital. Counting both electrical generation and steam production, this cost equates to around $436 per kW.
“The configuration of the Gregory plant being both cogeneration and combined cycle presents us with tremendous cost-effective capability and flexibility going into a summer where demand is expected to be high and reserves low,” said John Ragan, president of NRG’s Gulf Coast region. “This additional capacity in a zone where NRG sees significant growth potential will be exceptionally important to our growing Gulf Coast retail and wholesale operations.”
The Gregory 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 said it currently serves significant retail load and looks to continue to expand its customer base in this growing part of the state.
The Gregory unit came online in 2000. The current operator, DPS Gregory, will continue to operate the plant until a transition to NRG operations is completed.
The plant was acquired from a consortium of affiliates of Atlantic Power, John Hancock Life Insurance Co. (U.S.A.) and Rockland Capital LLC.
Following the close of this deal, NRG told the Public Utility Commission of Texas that the combined direct- and indirectly-owned generation of NRG within ERCOT will be 11,473 MW. That is based on the summer net dependable capability rating of all generation capacity owned and controlled by NRG and its affiliates that is currently connected, or is scheduled to be connected within the next 12 months, with a transmission or distribution system within ERCOT, except for wind resources which are discounted to 8.7% of installed nameplate capacity as per the methodology currently utilized in ERCOT’s Capacity, Demand and Reserves Report.
NRG said that the combined, direct and indirectly owned generation of NRG within ERCOT will exceed 1% of the total electricity offered for sale in ERCOT, but that NRG will only own about 13.7% of the total generating capacity within the ERCOT region, well below the 20% threshold that could trigger additional review of the proposed purchase under the Public Utility Regulatory Act.