NRG Energy agrees to sell 4.9 GW of gas generation to LS Power for US$4B
The sale targets a second-quarter 2027 close and supports additional debt reduction and an expanded share-repurchase plan.
Ines Halvorsen
A second-quarter 2027 close is targeted after NRG Energy, Inc. NYSENRG agreed on Monday to sell 4.9 gigawatts of gas-fired generation to LS Power. The buyer will pay US$4 billion in cash, subject to working-capital and other closing adjustments. The definitive agreement covers six plants across Texas, New York, Rhode Island and Connecticut.
The Nov. 9 announcement supports a plan for US$3 billion of share repurchases across 2026 and 2027. That includes an incremental US$1 billion expected to begin before the end of the fourth quarter of 2026, ahead of the anticipated sale closing.
Upon closing, NRG plans an additional US$2 billion of debt reduction, bringing its total planned 2027 debt reduction to US$3 billion. Monday's release says remaining proceeds would be reserved for contracted growth investments or further debt reduction.
Shares rose 9.20 per cent to US$96.41 on the New York Stock Exchange at 10:39 a.m. EST on Monday NYSENRG. NRG announced the sale alongside its quarterly results.
NRG supplies electricity, natural gas and smart-home services to eight million customers across North America, according to Monday's announcement. Its current generation fleet totals approximately 25 gigawatts.
The company put the sale's implied enterprise-value multiple at eight times the assets' estimated 2027 adjusted earnings before interest, taxes, depreciation and amortization. That valuation uses NRG's forecast of the plants' earnings, rather than a reported historical result.
"This transaction will strengthen our balance sheet, support increased share repurchases and preserve flexibility to invest in growth opportunities with compelling returns," NRG chief executive Robert Gaudette said in the release.
Regulatory Approvals Precede The Sale Closing
NRG said the sale requires customary closing conditions and regulatory approvals, including Hart-Scott-Rodino clearance, the Federal Energy Regulatory Commission and the New York State Public Service Commission. The announcement sets a target closing period rather than a regulatory decision deadline.
The assets being sold are Ravenswood in New York; Ocean State Power in Rhode Island; Wallingford in Connecticut; and Jack County, Johnson County and R.W. Miller in Texas. LS Power's Nov. 9 announcement identifies a mix of combined-cycle, simple-cycle and steam-turbine facilities.
After closing, NRG expects to retain 20 gigawatts of generation, split evenly between Texas's ERCOT market and PJM. Its Nov. 9 release also expects another 1.1 gigawatts from its two remaining Texas Energy Fund projects to be operational by 2028.
NRG's 2027 adjusted earnings guidance, issued on Nov. 9, ranges from US$8.05 to US$10.05 a share. It excludes the expected effects of the announced asset sale, so the range does not describe the planned post-sale business.
Power-sector peer Vistra Corp. NYSEVST also expanded its capital-return authorization. Its Nov. 6 release announced an additional US$1.5 billion of authorized share repurchases, expected to be used by the end of 2028.
Read more: Vistra reports US$2.38B adjusted EBITDA and sets 2027 outlook
NRG's next planned step is to begin the incremental buybacks before the fourth quarter of 2026 ends. The cash sale remains targeted for the second quarter of 2027, subject to the required approvals and closing conditions.
