NRG Energy, Inc.
) has clinched a deal to acquire the Gregory cogeneration plant
in Corpus Christi, Texas, for approximately $244 million.
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Per the deal, NRG Energy will purchase the plant from a group of
affiliates of Atlantic Power Corporation, John Hancock Life
Insurance Company (U.S.A.), and Rockland Capital, LLC. The
transaction, which is subject to regulatory approval, is expected
to close in the third quarter.
With this acquisition, NRG Energy will be able to expand its
generation capacity in Texas where it is striving to enlarge its
customer base. With a generation capacity of around 400 megawatts
(MW) and steam capacity of 160 MW of electricity equivalent, this
cogeneration Gregory plant also supplies steam, processed water
and a small percentage of its electricity generation to the
Corpus Christi Sherwin Alumina plant.
Most of the power output from the Gregory plant is offered for
sale in the grid operated by the Electric Reliability Council of
Texas (ERCOT). ERCOT controls the flow of electric power to 23
million Texas customers that is equivalent to 85% of the state's
Princeton, N.J.-based NRG Energy together with its subsidiaries
operates as an integrated wholesale power generation and retail
electricity company. The company's fleet has a combined capacity
of roughly 47,000 MW.
The company continues to maintain a strong financial position,
with cash and cash equivalents of $2.1 billion as of Dec 31, 2012
compared with $1.1 billion as of Dec 31, 2011. Moreover, the
company's available liquidity stood at an impressive level of
$3.6 billion as of Dec 31, 2012.
We believe the Texas power plant acquisition and the commencement
of operations at the newly installed Alpine Generating Station
and Avra Valley Solar Generating Station will further enable NRG
Energy to meet the growing demand for power.
NRG Energy currently has a Zacks Rank #2 (Buy). Other companies
in the sector that also look promising and are worth accumulating
Brookfield Infrastructure Partners L.P.
Empresa Nacional de Electricidad S.A.
Huaneng Power International, Inc.
). All these companies sport a Zacks Rank #1 (Strong Buy).