Texas public power utility CPS Energy and PROENERGY have entered into a definitive agreement under which CPS Energy has agreed to acquire four natural gas power generation facilities with an aggregate electric capacity totaling 1,632 megawatts for $1.387 billion, subject to standard net working capital adjustments.
The transaction is expected to close in the third quarter of 2025. Located in the Electric Reliability Council of Texas market, the acquired assets include state-of-the-art, recently constructed peaking natural gas plants in Harris, Brazoria, and Galveston Counties. The acquired assets are dual-fuel capable, providing CPS Energy future optionality to transition to a hydrogen fuel blend that would enable reduced carbon emissions.
In addition to the purchase agreement, CPS Energy and PROENERGY have entered into Operations and Maintenance (O&M) and Total Care Services Agreements (TCSA).
Under these agreements, PROENERGY will continue to staff, operate, and maintain the acquired units, ensuring safe and reliable operation and maintenance of the power plants.
This purchase is in alignment with CPS Energy’s community-led and board approved generation and resource plan. Pursuing unique opportunities, such as acquiring these new operating assets in ERCOT, presents a lower cost and lower supply chain risk alternative to building new power facilities, and supports CPS Energy’s long-term objectives of providing reliable, affordable, and cleaner energy to its customers and community, the San Antonio-based public power utility said.
“By acquiring recently constructed, currently operating modern power plants that utilize proven technology already in use by CPS Energy, we avoid higher construction costs, inflationary risk, and long timelines associated with building new facilities – while also enhancing the reliability and affordability of the CPS Energy generation portfolio,” said Rudy Garza, President and CEO of CPS Energy.
“We are getting the best of both worlds by securing new infrastructure without delay while also strengthening the power supply for our community. This acquisition secures reliable capacity today – at a lower cost – and is a win for the customers of CPS Energy, the city of San Antonio and all the communities we serve by meeting their long-term energy needs. As we add resources to meet the needs of our fast-growing communities, we will continue to look to a diverse balance of energy sources that complement our portfolio, including natural gas, solar, wind, and storage, keeping our community powered and growing," he said.
J.P. Morgan is acting as the exclusive financial advisor and Dykema Gossett PLLC is acting as legal advisor to CPS Energy with respect to the transaction.
CIBC Capital Markets is serving as exclusive financial advisor and Latham & Watkins LLP is serving as legal advisor to PROENERGY.
