Executive Insight, Generation, Natural Gas

NRG seeks Texas approval to buy power plant being moved from Mississippi

NRG Texas Power LLC applied March 27 at the Public Utility Commission of Texas for approval of the proposed purchase of all of the issued and outstanding membership interests in PHR Holdings LLC from BTEC New Albany LLC, which currently owns 100 percent of the membership interests in PHR.

PHR owns a peaking facility, comprised of six General Electric natural gas-fired combustion turbine generating units with a combined total summer net capacity of 388 MW, according to GenerationHub. That facility is being transported from Mississippi and reassembled by BTEC at the site of a former generation station located in Texas City, Texas, and owned by NRG Texas.

While PHR does not currently offer electricity for sale in Texas, PHR likely will test the PHR Peaking Facility prior to the closing of the proposed purchase, and, although not currently anticipated by the parties, it is possible that one or more of the peaking units could be put into commercial operation prior to closing.

Should test power delivered to the grid be considered “offering electricity for sale in the state”, or in the remote possibility that the PHR Peaking Facility would commence commercial operation prior to closing, then state Public Utility Regulatory Act (PURA) Section 39.158 would apply. Therefore, NRG Texas Power requests commission approval of the proposed purchase out of an abundance of caution.

The combined generation owned and controlled by NRG Energy and its affiliates following the proposed purchase will exceed 1 percent of the total electricity offered for sale in the Electric Reliability Council of Texas (ERCOT) region. Following the consummation of the proposed purchase, NRG will own about 13.3 percent of the total generating capacity within the ERCOT region – below the 20 percent threshold that could trigger additional review of the proposed purchase under PURA Section 39.154, NRG Texas Power noted.

The application added: “Seller is transporting a peaking facility from Mississippi and reassembling it in Texas City at the site of a former generation station. The Texas City site, which is owned by NRG Texas, is located within, and is electrically interconnected only to, the ERCOT power region. By virtue of the Proposed Purchase, NRG will be adding a combined total Summer Net peaking capacity of 388 MW to the ERCOT grid. PHR, as the entity responsible for developing and constructing the peaking facility, is a new entrant into Texas. At present, no power is being sold by PHR into Texas. However, because prior to closing the Proposed Purchase. PHR will (i) conduct testing of the PHR Peaking Facility after assembly and (ii) possibly, (although not expected) place one or more of the peaking units into commercial operation.”