NRG Energy to Acquire Corpus Christi, Texas Cogeneration Plant

NRG Energy, Inc. has entered into an agreement with a consortium of affiliates of Atlantic Power Corporation, John Hancock Life Insurance Company (U.S.A.), and Rockland Capital, LLC to acquire the Gregory cogeneration plant in Corpus Christi, Texas.

The cogeneration plant is equivalent to an approximately 560 megawatt (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).

NRG is paying approximately $244 million for the plant. Counting both electrical generation and steam production, this cost equates to approximately $436 per kilowatt.

"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 David Crane, President and Chief Executive Officer of NRG.

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.