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TXU Affiliate Luminant To Acquire Nearly 3,000 MW In ERCOT From Gexa Affiliate NextEra

November 30, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

Luminant has entered into a definitive agreement to acquire generating assets representing 2,988 MW of capacity in the ERCOT market from NextEra Energy Resources, LLC

Specifically Luminant has agreed to purchase NextEra's La Frontera portfolio, which consists of Forney Energy Center and Lamar Energy Center, which are both combined-cycle plants located in Northeast Texas.

The gas-fired Forney Energy Center is located in Forney, Texas. It has a capacity of 1,912 MW with a commercial operation date of 2003.

The gas-fired Lamar Energy Center is located in Paris, Texas. It has a capacity of 1,076 MW with a commercial operation date of 2000.

The transaction includes a $1.313 billion purchase price ($440 per installed kilowatt) plus approximately $239 million for cash and approximately $37 million for net working capital, subject to customary adjustments based on the amounts of cash and net working capital at closing.

For Luminant, the plants are, "strategic investments that enhance our asset portfolio while building on our existing operations in ERCOT," said Luminant Chief Executive Officer Mac McFarland.

NextEra had previously announced that it was reviewing Texas merchant divestitures. "This transaction enables us to further optimize our power generation assets and is consistent with our strategy of reducing our merchant exposure while recycling capital into our growing long-term contracted asset portfolio," said Armando Pimentel, president and CEO of NextEra Energy Resources.

The transaction is expected to close in the spring of 2016, pending customary regulatory approvals.

Luminant said that funding of the purchase price is expected to come from cash on hand as well as borrowings under available credit facilities.

Luminant said that the United States Bankruptcy Court and appropriate creditor groups have granted the necessary approvals for the acquisition.

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