CPS Energy, a municipal electric utility in San Antonio, Texas, US, has finalised an agreement to acquire Talen Energy’s 1.7GW portfolio for $785m.

The acquisition is set to enhance the utility’s generation capabilities within the South Zone of the Electric Reliability Council of Texas market.

The portfolio includes natural gas plants in Corpus Christi and Laredo, Texas.

The transaction, which is expected to close in the second quarter of 2024, will see CPS Energy acquiring assets associated with Talen’s 897MW Barney Davis and 635MW Nueces Bay natural gas-fired generation facilities, and a 178MW natural gas-fired generation facility in Laredo.

CPS Energy president and CEO Rudy D Garza stated: “The purchase of these assets furthers CPS Energy’s commitment to deliver reliable and affordable energy supply to one of the nation’s fastest-growing communities, while also balancing our commitment to reduce carbon emissions by 2030.

“The investments we are making to purchase and improve the performance of these plants provide cost benefits when compared to building new assets, which means reliability now at a lower price for our community. In addition to these facilities, as our community continues to grow, we are also adding low and zero-carbon resources as well as energy storage to enable that additional growth.”

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Talen president and CEO Mac McFarland stated: “This transaction demonstrates our continued commitment to unlocking significant value for Talen, while also taking care of our people.

“We are happy that these assets will assist CPS Energy in its long-term strategy to serve its growing community with reliable and cost-effective power generation.”

The move is in line with the company’s generation plan, which was approved by its board in 2023.

It aims to provide additional power for the greater San Antonio community and is anticipated to be operational by summer 2024.

The plan also includes retiring older units and integrating a mix of gas, solar, wind and energy storage into the grid.

As part of its Vision 2027, it is set to retire 2.25GW of older and inefficient dispatchable generation capacity before 2030.

The utility has previously incorporated 730MW of solar energy and 50MW of energy storage, and plans an additional 500MW of energy storage.

In January 2024, CPS Energy entered a long-term power purchase agreement with Genesis Consolidated Industries for the 150MW solar project Exodus 1. Located in Caldwell County, Texas, the solar plant will be operational by the summer of 2025.