LS Power said Monday it has reached an agreement with Brazos Electric Power Cooperative to acquire 2.15 GW of its gas-fired generation in the ERCOT market.
The deal is a result of last year’s bankruptcy settlement between Brazos and the Texas grid operator, in which the cooperative agreed to sell its generation and become a transmission and distribution utility. Brazos owns about 4 GW of natural gas-fired capacity in ERCOT. (See Bankruptcy Judge Approves ERCOT-Brazos Settlement.)
The cooperative filed for bankruptcy in the wake of the February 2021 winter storm after being billed for $2.1 billion in wholesale prices. ERCOT later revised the amount due to the market to $1.89 billion. Brazos will use some of the transaction’s revenues to settle its debt.
LS Power is acquiring three plants as it continues to evaluate expansion opportunities in Texas:
- Jack County, two baseload combined cycle units totaling 1,297 MW near Bridgeport;
- Johnson County, a 280-MW combined cycle plant near Cleburne; and
- RW Miller, four peaking units totaling 568 MW near Palo Pinto.
The company will fold the generation into a special-purpose affiliate that includes dual-fuel capability, firm gas and storage arrangements, and on-site fuel oil storage.
“These three generation projects we are acquiring provide critical, reliable energy supply to an ERCOT market that is experiencing continued load growth,” LS Power Generation President Nathan Hanson said in a statement. “These projects provide for considerable flexibility and operational redundancy, which are key to balancing the intermittency of renewables and supporting ERCOT’s reliability requirements.”
The acquisition will increase LS Power’s gas generation fleet to 16 GW. The gas fleet is a key element of its energy transition portfolio, the company said. It expects the transaction to close in early June after receiving regulatory approval.