Centrica to sell Texas power stations

Centrica to sell Texas gas-fired power stations and extend its share repurchase programme

Centrica plc’s North American subsidiary, Direct Energy, has agreed to sell its Texas gas-fired power stations to Blackstone for $685 million (£420 million) in cash. The three units, located in Paris, Bastrop, and Mission, have a combined capacity of 1,295MW. As part of the transaction, Direct Energy has also entered into a three year call option arrangement for an equivalent amount of capacity with Blackstone.

Badar Khan, President and CEO of Direct Energy, said: “This transaction allows us to realise value from our gas-fired fleet, while ensuring stability of price and supply in the Texas power market through the call option arrangement.

“Residential retail supply is key to our North American business, and with sufficient generation capacity in Texas, we can support our downstream business through contractual arrangements, rather than asset ownership.”

Centrica plc will return the proceeds from this sale to shareholders through a £420 million extension of its share repurchase programme, which will be conducted over the course of 2014.

Notes

  • The transaction is subject to customary regulatory approvals and is expected to close in the first quarter of 2014.
  • The transaction will be made through Centrica plc’s wholly-owned subsidiary, Direct Energy Power Holdings, Inc.
  • The power stations to be sold by Direct Energy are listed below:
 

Year of purchase

ERCOT region

Installed capacity (MW)

Bastrop

2004

South

540

Frontera (Mission)

2004

South

495

Paris

2006

North

260

Total

    

1,295