Municipal electric utility CPS Energy is adding power to its portfolio, having announced plans to acquire four natural gas power generation facilities from PROENERGY in a nearly $1.4 billion deal.
The San Antonio, Texas-based company on Sept. 16 said it entered a definitive agreement a day earlier with PROENERGY to buy the power plants, including recently built peaking, dual-fuel capable plants in Brazoria, Galveston and Harris counties. Combined, the facilities in the Electric Reliability Council of Texas region have a capacity of more than 1.6 gigawatts.
“By acquiring recently constructed, currently operating modern power plants that utilize proven technology already in use by CPS Energy, we avoid higher construction costs, inflationary risk, and long timelines associated with building new facilities – while also enhancing the reliability and affordability of the CPS Energy generation portfolio,” said CPS Energy CEO Rudy D. Garza. “We are getting the best of both worlds by securing new infrastructure without delay while also strengthening the power supply for our community.”
The PROENERGY deal is the second acquisition of capacity generation for CPS in 16 months. In May 2024, CPS added approximately 1.7 GW of capacity to its portfolio after closing its acquisition of assets from Talen Energy Corp. for $785 million. The assets included plants in Corpus Christi and Laredo, Texas.
The new acquisition comes as electricity demand surges in Texas fueled by growth of energy-intensive industries such as data centers, artificial intelligence and cryptocurrency mining couple with rising population, industrial expansion and an electrification push in the oil and gas sector. ERCOT forecasts its projected peak demand could reach 218 GW by 2031, up from 94 GW expected in 2025.
CPS, the largest municipally owned electric and natural gas utility in the U.S., serves more than 1.3 million customers. Its portfolio consists of a mix of power generation sources, including natural gas, solar, wind, nuclear and energy storage assets.
The company aims to retire about 1.3 GW of coal assets and about 2 GW of older generation natural gas assets as part of its Vision 2027 plan. As of February 2025, the plan also called for adding about 2.7 GW of renewable energy, about 3.5 GW of natural gas and 200 megawatts of contract power.
The recently constructed facilities being acquired from PROENERGY are also capable of transitioning to a hydrogen fuel blend, which will lower carbon emissions.
As part of the deal, PROENERGY will continue to staff, operate and maintain the acquired assets, CPS said. The transaction is expected to close in third-quarter 2025.
“As we add resources to meet the needs of our fast-growing communities, we will continue to look to a diverse balance of energy sources that complement our portfolio, including natural gas, solar, wind, and storage, keeping our community powered and growing,” Garza said.
J.P. Morgan acted as the exclusive financial adviser for CPS Energy, with CIBC Capital Markets as exclusive financial adviser for PROENERGY. Serving as legal advisors were Dykema Gossett for CPS and Latham & Watkins LLP for PROENERGY.
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