NRG Energy to acquire LS Power gas generation portfolio

In a move that significantly expands its generation portfolio, NRG Energy has announced it will acquire 13 GW of natural gas-fired power plants and a leading commercial and industrial virtual power plant (C&I VPP) platform from LS Power in a cash and stock deal valued at $12 billion enterprise value.

The acquisition, expected to close in the first quarter of 2026, doubles NRG’s total generation capacity to 25 GW, with the new assets concentrated in Texas and the Northeast—two regions where NRG already serves a large retail load. The deal positions NRG to capitalize on growing U.S. energy demand and ongoing tightening of power market supply-demand balances.

“This acquisition transforms NRG’s generation fleet and broadens our customized product offerings,” said Larry Coben, NRG Chair, President and CEO. “We are in the early stages of a power demand supercycle, and we are excited to lead the way with reliable energy solutions that will drive considerable value for NRG and all of our stakeholders.”

Strategic scale and fuel diversity

The 18 natural gas-fired facilities included in the deal are modern, quick-start units that strengthen NRG’s operational flexibility, simplify risk management, and reduce cost-to-serve, the company said. Many of the assets were expanded and redeveloped by LS Power, which will retain ownership of approximately 10 GW of generation assets, including natural gas, renewables, and storage.

NRG also gains full ownership of CPower, LS Power’s C&I demand response platform, which aggregates 6 GW of flexible capacity across 2,000+ commercial customers. This addition will allow NRG to offer demand-side solutions alongside its physical generation, enhancing its ability to meet long-term supply contracts with large industrial customers and data centers.

The acquisition is expected to be immediately accretive to NRG’s earnings, with an estimated 7.5x EV/EBITDA multiple on 2026 projections, or roughly half the cost of a new build replacement. NRG has increased its long-term earnings growth target to at least 14% CAGR, up from 10%, reflecting confidence in the strategic value of the deal.

The company expects to return $9.1 billion in capital to shareholders over the next five years through share repurchases and dividends, including $1.3 billion in 2025. After closing, NRG aims to reach an investment-grade leverage ratio of below 3.0x Net Debt to Adjusted EBITDA within 24 to 36 months.

To finance the acquisition, NRG will pay $6.4 billion in cash, issue $2.8 billion in stock to LS Power, and assume $3.2 billion in net debt. LS Power will own about 11% of NRG’s outstanding shares, though it will limit voting control to under 10%.

Grid reliability and market impact

For the natural gas industry, this acquisition highlights ongoing investment in dispatchable thermal generation—particularly in regions with growing load, renewables intermittency, and constrained buildout capacity for new fossil assets. As power markets become tighter, NRG’s enhanced platform offers both physical and virtual generation resources that support reliability and price stability.

LS Power CEO Paul Segal called the sale a “significant milestone,” noting that the portfolio had been carefully developed to serve regions with the highest demand growth and market value. “These projects, along with CPower, will continue to provide critical services to the grid, enhancing both its resilience and affordability,” Segal said.