NRG Energy to Sell Six Natural Gas Plants to LS Power for $4 Billion

NRG Energy has agreed to sell six natural gas generation assets totaling 4.9 GW to LS Power for $4 billion in cash, subject to working capital and other closing adjustments, according to a regulatory filing. The deal reshapes NRG's generation footprint while funding a mix of shareholder returns and debt reduction, and shares jumped 6.4% pre-market Monday following the announcement, according to Seeking Alpha.

What's Being Sold

The six facilities span three regional power markets: NYISO's Ravenswood plant in New York, ISO-NE's Ocean State Power (Rhode Island) and Wallingford (Connecticut) assets, and ERCOT's Jack County, Johnson County, and R.W. Miller plants in Texas, according to the company's SEC filing. LS Power's own release detailed the technology mix: combined-cycle units at Jack County, Johnson County, and Ocean State Power; combined-cycle, simple-cycle, and steam turbine capacity at Ravenswood; simple-cycle and steam turbine generation at R.W. Miller; and simple-cycle capacity at Wallingford.

The $4 billion price implies an 8.0x EV/Adjusted EBITDA multiple based on 2027 projections, per the filing. For LS Power, the acquisition is part of a broader expansion: combined with its pending purchase of roughly 4.4 GW from Constellation, the company said its natural gas fleet will grow from 2.2 GW to 11.5 GW, with its total generation portfolio, including hydro, solar, wind, and storage, exceeding 19 GW, according to LS Power's statement.

Regulatory Path and Timeline

Regulatory Path and Timeline

NRG and LS Power are targeting a second-quarter 2027 close, contingent on customary closing conditions and regulatory approvals including Hart-Scott-Rodino antitrust clearance, the Federal Energy Regulatory Commission, and the New York State Public Service Commission, according to the SEC filing; LS Power's release said the acquisition is expected to close in 2027. Interpretation: approvals spanning three organized markets add the kind of regulatory timing risk typical of large generation transfers, though neither company disclosed any specific obstacle.

Where the Proceeds Go

NRG laid out the use of proceeds in its filing. Upon closing, the company plans an additional $2 billion of debt reduction intended to maintain its current leverage profile, bringing total planned 2027 debt reduction to $3 billion. The remaining $1 billion of expected proceeds will be reserved to fund either contracted growth investments or additional debt reduction, giving NRG flexibility rather than a fixed commitment, per the filing.

What Remains at NRG

Once the sale closes, NRG will own and operate 20 GW of generation nationwide, down from the approximately 25 GW the company currently operates, according to the SEC filing — a difference of 5 GW based on those two reported figures (25 − 20). The remaining portfolio will be split evenly between ERCOT and PJM, at 10 GW each. NRG also expects an additional 1.1 GW to become operational in ERCOT by 2028 through its remaining two Texas Energy Fund projects, the filing states.

Notably, the transaction leaves NRG's entire PJM portfolio intact, along with CPower, the demand-response business NRG acquired in January 2026, according to a related SEC filing. NRG President and CEO Robert Gaudette framed the sale as a portfolio-concentration move, stating the company is "unlocking substantial value from a select group of assets, while maintaining a robust generation footprint in PJM and ERCOT that provides reliable, affordable power for our customers."

The company noted that its newly initiated 2027 financial guidance does not reflect the expected impacts of the announced 4.9 GW asset sale, meaning the current outlook does not yet capture the divestiture's effects.

Advisors

Barclays served as lead financial advisor and White & Case LLP as legal counsel to NRG on the transaction. LS Power was advised by Milbank LLP on legal matters, with Scotiabank and Evercore serving as financial advisors, according to the companies' respective announcements.

Bottom Line

This is a straightforward divestiture: NRG is trading a geographically diverse slice of its fleet, spread across NYISO, ISO-NE, and ERCOT, for $4 billion in cash, with $2 billion of debt reduction planned at closing and the remaining roughly $1 billion reserved for contracted growth investments or further debt paydown. The move narrows NRG's footprint to a dual ERCOT-PJM concentration while leaving the PJM business and CPower untouched. For LS Power, the company said the deal substantially scales its natural gas and overall generation presence. Interpretation: execution risk centers on the multi-agency approval process behind the targeted second-quarter 2027 close, which leaves several quarters to satisfy HSR, FERC, and New York PSC requirements.