NRG to Acquire Gas Generation Plants, VPP from LS Power for $12B

NRG Energy Inc. and LS Power Equity Advisors LLC have penned a deal under which NRG will acquire gas-fired power units with a combined capacity of about 13 gigawatts (GW) and a C&P VPP (commercial and industrial virtual power plant) platform from LS Power.

The transaction has an enterprise value of $12 billion. This consists of $6.4 billion in cash, a $2.8 billion stock issuance to LS Power and $3.2 billion of assumed debt.

“The acquisition will double NRG’s generation capacity to 25 GW, adding modern, flexible natural gas assets that cannot be replicated”, said a joint statement Monday. “These new quick-start facilities, serving the Northeast and Texas markets, optimize NRG’s ability to serve customers, simplify risk management, and lower cost-to-serve”.

The 18 gas-fired facilities being transferred to NRG are located across nine states. Meanwhile the C&P VPP platform, called CPower, operates in all the United States’ deregulated energy markets and has around 6 GW of capacity representing over 2,000 commercial and industrial customers, according to the statement.

“The acquisition expands NRG’s capabilities to serve rapidly growing demand for tailored, long-term supply solutions for customers – particularly data centers. It also enhances NRG’s additionality offerings through 1+ GW of potential uprates, additional sites for potential development or colocation opportunities, and a differentiated C&I VPP platform”, the companies added.

“The transaction is financially compelling as it strengthens our credit profile and turbocharges NRG’s growth rate, while also supporting continued robust capital returns”, said NRG chair, president and chief executive Larry Coben. “We are in the early stages of a power demand supercycle, and we are excited to lead the way with reliable energy solutions that will drive considerable value for NRG and all of our stakeholders”.

The statement said, “Given the visible, sustained growth expected to be created by the acquisition, NRG is increasing its stated long-term compounded annual growth rate target for Adjusted Earnings per Share to at least 14 percent, from the current at least 10 percent target, without including upside opportunities such as data centers or increased pricing from tightening markets”.

“NRG expects to return approximately $9.1 billion of capital to NRG shareholders through share repurchases and common dividends over this period”, the statement added.

LS Power is expected to own approximately 11 percent of NRG’s pro-forma shares outstanding. “LS Power’s election to receive NRG shares for approximately 23 percent of the purchase price, which is equivalent to 30 percent of its net consideration after debt assumption, reflects a strong conviction in NRG’s post-acquisition value”, the statement said.

“A portion of LS Power’s shares will be held in a voting trust such that it will control less than 10 percent of the overall voting rights of NRG stock at all times”.

The parties expect to complete the transaction in the first quarter of 2026, subject to clearance from U.S. anti-trust reviews, regulatory approvals and other customary closing conditions.

Separately, in its quarterly report also published Monday, NRG said it had closed the purchase of a 738-megawatt natural gas combined-cycle peaking generation portfolio in Texas from Rockland Capital for $560 million, subject to standard working capital adjustments.

“The transaction enhances NRG’s integrated supply strategy with critical peaking and baseload capacity in key load zones across Texas”, NRG said. 

NRG had a $5.22-billion liquidity at the end of the first quarter of 2025, including $708 million in cash, cash equivalents and restricted cash plus $4.51 billion in availability under the company’s revolving credit facility and collective collateral facilities. Current assets totaled $9.88 billion.

Meanwhile its current liabilities stood at $9.3 billion including a $997 million current portion of long-term debt and finance leases.

NRG logged $750 million in net profit for Q1 2025, up from $511 million for the same three-month period last year. Adjusted for special items, net income was $531 million, or $2.68 per share – higher than the $305 million recorded for Q1 2024.

NRG’s Texas operations generated $299 million in adjusted EBITDA, up $80 million year-on-year primarily due to “higher economic gross margin, including impact of weather, strong plant performance, and supply optimization”.

Adjusted EBITDA from the East came at $474 million, $123 million higher than the comparable period in 2024. “This increase is primarily driven by higher natural gas wholesale and retail gross margins and increased volumes from weather, and higher generation volumes and capacity prices in New York, partially offset by an increase in planned outage expenditures as compared to prior year”, NRG said.

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