NRG Energy and LS Power Equity Advisors on May 12 announced that they have entered into a definitive agreement under which NRG will acquire a portfolio of natural gas generation facilities and a commercial and industrial virtual power plant platform from LS Power in a cash and common stock transaction valued at approximately $12 billion enterprise value.
This acquisition doubles NRG’s generation capacity with the addition of 18 natural gas-fired facilities totaling approximately 13 GW. These facilities, located across nine states, expand NRG’s generation footprint in the Northeast and Texas, where most of its load is located.
In addition, NRG is acquiring CPower, a leading C&I VPP platform. CPower operates in all the country’s deregulated energy markets and has approximately 6 GW of capacity representing more than 2,000 commercial and industrial customers.
Among the strategic and acquisition benefits for NRG is that the deal:
Transforms NRG’s Generation Fleet with Irreplicable, High-Quality Assets in Core Markets
The acquisition will double NRG’s generation capacity to 25 GW, adding modern, flexible natural gas assets that cannot be replicated. These new quick-start facilities, serving the Northeast and Texas markets, optimize NRG’s ability to serve customers, simplify risk management, and lower cost-to-serve.
Immediately and Highly Accretive with Compelling 5-Year Outlook
The acquisition is expected to be immediately accretive to NRG’s Adjusted Earnings Per Share. Given the visible, sustained growth expected to be created by the acquisition, NRG is increasing its stated long-term compounded annual growth rate (CAGR) target for Adjusted Earnings per Share to at least 14%, from the current at least 10% target, without including upside opportunities such as data centers or increased pricing from tightening markets. NRG expects to return approximately $9.1 billion of capital to NRG shareholders through share repurchases and common dividends over this period.
Creates Optionality and Boosts Upside Opportunities from the Power Market Supercycle
After the transaction, NRG will have a larger, more flexible platform across core Northeast and Texas markets, increasing NRG’s asymmetric gearing to tightening supply and large load demand growth.
The acquisition expands NRG’s capabilities to serve rapidly growing demand for tailored, long-term supply solutions for customers – particularly data centers. It also enhances NRG’s additionality offerings through 1+ GW of potential uprates, additional sites for potential development or colocation opportunities, and a differentiated C&I VPP platform.
Enhanced Credit Profile Reinforces Financial Strength
NRG will maintain a strong balance sheet, with its current credit ratings expected to be affirmed by S&P, Moody’s, and Fitch. Following the acquisition, NRG’s enhanced credit profile supports an increase in its target investment-grade leverage ratio to below 3.0x Net Debt to Adjusted EBITDA, from currently stated target range of 2.50x to 2.75x. The Company expects robust pro forma cash flows to drive rapid deleveraging and is committed to achieving its target leverage ratio within 24 to 36 months following closing.
The acquisition is expected to close in the first quarter of 2026, subject to customary closing conditions and regulatory approvals including Hart-Scott-Rodino (HSR), Federal Energy Regulatory Commission (FERC), and the New York State Public Service Commission (NYSPSC).
