NRG Energy buys Gregory cogeneration plant for $244MM

Source:NRG Energy

NRG Energy, Inc.(NYSE: NRG), has closed on the acquisition of the natural gas-fired 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 in cash for the plant, exclusive of adjustments relating to working capital. Counting both electrical generation and steam production, this cost equates to approximately $436 per kilowatt.

“The configuration of the Gregory plant being both cogeneration and combined cycle presents us with tremendous cost-effective capability and flexibility going into a summer where demand is expected to be high and reserves low,” said John Ragan, president of NRG’s Gulf Coast region. “This additional capacity in a zone where NRG sees significant growth potential will be exceptionally important to our growing Gulf Coast retail and wholesale operations.”

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 current operator, DPS Gregory, will continue to operate the plant until a transition to NRG operations is completed.

The plant was acquired from a consortium of affiliates of Atlantic Power Corporation, John Hancock Life Insurance Company (U.S.A.), and Rockland Capital, LLC.

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