Direct Energy to sell three gas-fired plants

• 10 years ago (2013-12-19)
• Junior Isles

North America 1004

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Houston-based Direct Energy, a subsidiary of Britain’s Centrica PLC, has announced it will sell its three gas-fired power plants in Texas to New York-based Blackstone Group LP for $685 million in first quarter 2014.

The Texas gas-fired plants in Bastrop, Mission and Paris have a combined capacity of about 1295 MW. Blackstone and an affiliate of Direct Energy also agreed to a three-year call option arrangement for an equivalent amount of capacity.

“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," Direct Energy President and CEO Badar Khan said in a statement.

"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,” he said.

Khan had stated in the media earlier this year that he wanted to grow the electric retailer’s core businesses and double its profits over three to five years.

Direct Energy has made a number of acquisitions throughout 2013, including an almost $731 million deal to buy the energy marketing business of New York-based Hess Corp. and a $46 million deal to acquire Houston’s Bounce Energy.