CPS Energy agrees to acquire South Texas power plants for $785M
CPS Energy's planned $785 million transaction to acquire three South Texas natural gas-fired plants could end up saving ratepayers money, utility officials say. CPS Energy has agreed to acquire three natural gas-fired plants in South Texas for $785 million, with Talen Energy Corporation (OTCQK: TLNE) for the purchase. The transaction will add 1,710 megawatts of natural gas capacity to CPS Energy's generation portfolio, which aims to power San Antonio through 2030. The acquisition is expected to close in April 2024. CPS Energy President and CEO Rudy Garza stated that the transaction will move forward the utility's Vision 2027 strategy forward and could result in about $1 savings on fuel per month. The company plans to invest in the assets to make them more efficient, enhancing their environmental performance.
Pubblicato : 4 settimane fa di Zoe Gottlieb in Business
CPS Energy's planned $785 million transaction to acquire three South Texas natural gas-fired plants could end up saving ratepayers money, utility officials say.
Earlier today, CPS Energy announced an agreement with Talen Energy Corporation (OTCQK: TLNE) to acquire three of its natural gas-fired plants – two in Corpus Christi and one in Laredo – for $785 million. The transaction will add 1,710 megawatts of natural gas firming capacity to the utility's generation portfolio, which calls for a "blend of gas, solar, wind and energy storage" to power San Antonio through 2030.
The transaction is expected to close in April 2024.
In a press briefing on Wednesday, CPS Energy President and CEO Rudy Garza referred to the transaction as "strategic," adding that it will move forward the utility's Vision 2027 strategy forward in a "big, big way."
"We got these assets at a great value for our community," Garza said. "We get double the capacity that we had planned to build, basically at half the cost."
There are two ways ratepayers are impacted: When CPS Energy needs to go in for a rate case, and by the amount of fuel the utility needs to run through its power plants, Garza explained in response to a reporter's question on Wednesday. Garza said the generation plan, which includes the 1,710 MW addition, will have a "downward pressure" effect on the overall level of fuel, resulting in about $1 savings on fuel per month.
"So at the end of the day with this plan, customers will benefit, because we'll be spending less on fuel than we're spending today," he said.
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CPS Energy was awarded the assets through a competitive bidding process, according to CPS Energy Chief Strategy Officer Elaina Ball. Garza said the utility plans to invest in the assets to make them more efficient, thereby improving their environmental performance.
Talen's Barney Davis and Laredo plants are combined cycle power plants, which consist of two units and use gas and stream turbines to produce more electricity. Ball said CPS Energy will explore operating the units individually or as "peaker plants," a term describing plants that operate only during times of peak demand.
Environmental performance is top of mind for utilities and corporations alike as federal agencies prepare to crack down on emissions, setting stiff penalties for violations. Bexar County, which is currently in exceedance of the EPA's Ozone criteria pollutant standard, will at some point required to get back into compliance, Garza pointed out, adding that CPS Energy is actively preparing for that day.
"Going forward, we're paying attention to that and participating in that process," Garza said.