CPS Energy has reached an agreement with PROENERGY to purchase four natural gas power generation facilities in Southeast Texas. The deal, valued at $1.387 billion and subject to standard net working capital adjustments, covers plants with a combined capacity of 1,632 megawatts. The transaction is expected to close in the third quarter of 2025.
The facilities are located within the Electric Reliability Council of Texas (ERCOT) market and are described as state-of-the-art, recently built peaking natural gas plants situated in Harris, Brazoria, and Galveston Counties. These assets are capable of using dual fuels, giving CPS Energy options for future conversion to hydrogen fuel blends aimed at reducing carbon emissions.
Alongside the acquisition agreement, CPS Energy and PROENERGY have also signed Operations and Maintenance (O&M) and Total Care Services Agreements (TCSA). Under these agreements, PROENERGY will continue staffing, operating, and maintaining the power units.
CPS Energy said that this purchase aligns with its board-approved generation and resource plan. The company stated that acquiring existing operating assets provides a lower cost and lower supply chain risk compared to building new facilities from scratch.
Rudy D. Garza, President and CEO of CPS Energy said: “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. We are getting the best of both worlds by securing new infrastructure without delay while also strengthening the power supply for our community. This acquisition secures reliable capacity today – at a lower cost – and is a win for the customers of CPS Energy, the city of San Antonio and all the communities we serve by meeting their long-term energy needs. 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.”
J.P. Morgan is serving as exclusive financial advisor to CPS Energy on this transaction while Dykema Gossett PLLC acts as legal advisor. For PROENERGY, CIBC Capital Markets serves as exclusive financial advisor with Latham & Watkins LLP as legal counsel.
CPS Energy provides electricity to more than 950,000 customers in San Antonio and surrounding counties; it also supplies natural gas service to nearly 389,000 customers. According to company information available on its website (https://www.cpsenergy.com/en/about-us/company-information.html), CPS Energy is recognized among leading public utilities for renewable energy adoption in Texas.
PROENERGY specializes in engineering services related to fast-start power generation solutions including turbine manufacturing and asset lifecycle care.
