CPS Energy announced it would acquire natural gas plants in Corpus Christi and Laredo, Texas, from Talen Energy in a $785 million deal. Talen Energy Supply had received court permission in 2022 to solicit creditor votes as part of a bankruptcy restructuring plan. Last year, the restructuring agreement was completed.
CPS Energy’s acquisition of the gas plants adds a 1,710-megawatt (MW) generation portfolio based in the Electric Reliability Council of Texas’s south zone. This deal supports CPS Energy’s generation plan, which its Board of Trustees approved in 2023.
The addition of these units aligns with the generation plan, which includes retiring older units and adding a blend of gas, solar, wind, and energy storage.
As part of the agreement, CPS Energy will acquire all assets associated with Talen’s 897 MW Barney Davis and 635 MW Nueces Bay natural gas-fired generation facilities, both located in Corpus Christi, Texas and its 178 MW natural gas-fired generation facility in Laredo, Texas.
CPS Energy’s Vision 2027 plan includes a generation plan that contemplates the retirement of 2,249 MW of older and inefficient dispatchable generation capacity before 2030. And CPS Energy has added 730 MW of solar energy and 50 MW of energy storage to date as part of its generation plan, with an additional 500 MW energy storage RFP in the works.
J.P. Morgan is the exclusive financial advisor and Dykema Gossett PLLC is the legal advisor to CPS Energy for the deal. RBC Capital Markets, LLC is the exclusive financial advisor and Kirkland & Ellis LLP is the legal advisor for Talen.
The deal is subject to custom closing conditions. The deal is expected to close in the second quarter.
KEY QUOTES:
“The purchase of these assets furthers CPS Energy’s commitment to deliver reliable and affordable energy supply to one of the nation’s fastest growing communities, while also balancing our commitment to reduce carbon emissions by 2030. The investments we are making to purchase and improve the performance of these plants provide cost benefits when compared to building new assets, which means reliability now at a lower price for our community. In addition to these facilities, as our community continues to grow, we are also adding low and zero-carbon resources as well as energy storage to enable that additional growth.”
- Rudy D. Garza, President & CEO of CPS Energy
“This transaction demonstrates our continued commitment to unlocking significant value for Talen, while also taking care of our people. We are happy that these assets will assist CPS Energy in its long-term strategy to serve its growing community with reliable and cost-effective power generation.”
- Talen President and Chief Executive Officer Mac McFarland
