Pineville, Louisiana-based Cleco Corporate Holdings, the parent company of electric utility Cleco Power, is acquiring NRG South Central Generating, a subsidiary of New Jersey-based NRG Energy, for $1 billion, in a deal announced this morning.
Cleco says it will acquire eight power plants totaling 3,555 megawatts, transmission operations, and contracts to provide wholesale power to nine Louisiana cooperatives, five municipalities in Arkansas, Louisiana and Texas, and one investor-owned utility.
Additionally, Bloomberg reports cash-strapped NRG is also selling its renewable energy development business as well as a controlling stake in its solar company, NRG Yield, to Global Infrastructure Partners for roughly $1.38 billion in cash. Combined, the deals are expected to remove roughly $7 billion in debt from NRG’s balance sheet.
Cleco says its acquisition is expected to increase the scale of its Louisiana operations, more than doubling its generation capacity and increasing its number of customers. It also will give Cleco access to key industrial and residential growth areas. The company’s long-term strategy will be to merge the companies under one regulated entity, says Cleco Holdings CEO Bill Fontenot.
The sale is expected to close by the end of this year, pending regulatory approvals. Upon closing, Cleco will manage seven of the power plants. A plant in Cottonwood, Texas, will be leased back to NRG, who will operate it until May 2025.
Cleco Power serves approximately 288,000 customers in Louisiana through its retail business and supplies wholesale power in Louisiana and Mississippi.
