FERC has approved LS Power’s deal to sell 12.9 GW of its gas generation in PJM, NYISO and ISO-NE, as well as its 6-GW demand response business, CPower, to NRG Energy for $12 billion (EC25-102).

The transaction, approved Nov. 14, was opposed by PJM’s Independent Market Monitor, as well as the New Jersey Division of Rate Counsel and Maryland Office of People’s Counsel, which argued it would harm competition and lacked safeguards against market power manipulation.

The Monitor urged the commission to condition its approval on requirements around how NRG could structure its cost- and price-based offers, subject them to the requirement that they offer into the day-ahead and real-time energy markets, base the DR strike price on the cost of dispatch and commit to not removing the generators’ capacity status to serve co-located load. (See NRG, PJM IMM Disagree on LS Power Deal’s Market Power Impact.)

NRG submitted analysis on how the deal would affect prices and ownership concentration, finding that the Herfindahl-Hirschman Index (HHI) for the New York City local capacity market is moderately concentrated and would increase from 1,085 points to 1,122 for the 2026 summer auction and go up from 1,157 to 1,214 in the 2026 winter auction. It determined the PJM capacity market is unconcentrated, with an HHI that would increase from 563 points to 565 across the RTO and would decrease within the MAAC zone from 851 to 840. They argued the increases in NYISO are small and below the commission’s threshold for rejecting a transaction and that the units in New York City would be considered pivotal and therefore subject to mitigation rules.

Commission staff issued a deficiency letter Aug. 13, requesting that the companies file more information about whether the DR resources were included in the horizontal market screens for PJM and NYISO. The companies responded with additional sensitivities showing there would be a “trivial impact” in the city and that the sensitivities for PJM and MAAC likewise found little impact.

The Monitor argued that the three-pivotal-supplier test would more accurately represent the impact to market power than the HHI, particularly given how tight PJM’s capacity market is.

“Regarding the PJM IMM’s arguments that the proposed transaction will increase market power in PJM, we find that the PJM IMM has not demonstrated that the proposed transaction will have an adverse effect on horizontal competition,” FERC wrote. “Although intervenors may submit alternative competitive analyses, accompanied by appropriate data, to support their arguments, the commission historically has not relied on three-pivotal-supplier test results or hourly market share analysis for its analysis of [Federal Power Act] Section 203 transactions, and we decline to do so here. Neither the three-pivotal-supplier test results nor hourly market share analysis cast doubt on the results of applicants’ [delivered price test], which indicates that the proposed transaction does not increase market concentration in any relevant market.”

During NRG’s third-quarter earnings call, CEO Larry Coben said the company expects the deal to close in the first quarter of 2026. It includes $6.4 billion in cash and NRG purchasing about 11% of LS Power’s shares, though it will directly receive less than a 10% holding to avoid the commission’s threshold for determining when a party holds functional control. The remainder will be transferred to an independent trust.