NRG Energy agreed Monday to sell six natural gas power plants to an affiliate of LS Power for $4 billion in cash, shifting 4.9 gigawatts of generating capacity across three U.S. electricity markets. The sale covers facilities in Texas, New York, Rhode Island and Connecticut. NRG disclosed the agreement in a securities filing and said it was targeting a close in the second quarter of 2027, subject to regulatory approvals and other conditions.

The deal pairs two different strategies. NRG told investors it would use proceeds to help finance share repurchases and reduce debt while retaining its biggest concentrations of generating capacity. For LS Power, it is a way to add capacity that is already connected to the grid. Reuters reported that NRG shares rose more than 7% in premarket trading after the announcement, which came the same morning the company reported higher quarterly earnings.

Six plants in three power markets

The facilities include Jack County, Johnson County and R.W. Miller in Texas, all in the market run by the Electric Reliability Council of Texas. Ravenswood operates in New York’s grid market. Ocean State Power in Rhode Island and Wallingford in Connecticut operate in the New England market. The seller’s announcement lists all six plants, and the buyer identified each facility and its mix of turbine technologies in a separate release.

The 4.9 gigawatts measure generating capacity. They do not describe how much electricity the facilities supply over a day or a year, and the transaction itself adds no new plants to the grid. The immediate commercial change, if the sale closes, is who owns existing capacity. LS Power said the plants’ existing permits and grid connections were part of their appeal: They give the buyer operating assets without the wait involved in building and connecting new ones.

What NRG plans to do with the cash

The price is subject to working capital and other closing adjustments. NRG says the price implies an enterprise value of eight times the assets’ projected adjusted earnings before interest, taxes, depreciation and amortization in 2027. That valuation multiple uses expected earnings for a future year. It gives investors a way to compare the sale price with what NRG expects the plants to earn, without assuming those earnings will be realized.

NRG’s quarterly report lays out a plan for $3 billion in buybacks over 2026 and 2027, including an additional $1 billion that the company expects to start before the end of this year. That start date precedes the expected closing. NRG also plans $2 billion of additional debt reduction after the sale closes, bringing its total planned debt reduction for 2027 to $3 billion. The company says it will reserve remaining proceeds for contracted growth investments or further debt reduction.

NRG reported third-quarter net income available to common shareholders of $544 million, up from $135 million a year earlier, as The Wall Street Journal reported. Its adjusted earnings rose to $4.68 per share from $2.78. The company maintained its adjusted earnings forecast of $7.90 to $9.90 a share for 2026 and gave an initial range of $8.05 to $10.05 for 2027. The quarterly results describe earnings NRG has already recorded; the sale proceeds are still ahead.

Where the companies are expanding

NRG expects to retain 20 gigawatts of generating capacity once the sale closes, split evenly between the Texas market and PJM. Reuters reported that NRG is keeping its entire PJM portfolio as well as CPower, the energy management company it bought from LS Power in January. NRG also expects two projects backed by the Texas Energy Fund to add 1.1 gigawatts by 2028. Selling three Texas plants would therefore change NRG’s holdings in the state while leaving it with a substantial fleet and plans to add capacity there.

LS Power estimates its gas fleet will reach 11.5 gigawatts, up from 2.2 gigawatts, if it completes both the NRG deal and a separate purchase of roughly 4.4 gigawatts from Constellation. The six NRG plants account for just over half the increase LS Power projects, with the rest coming from the separate acquisition. The buyer expects to have more than 19 gigawatts of generating capacity in all if both transactions go through, including its hydroelectric, wind, solar and battery storage assets.

What still has to happen

The closing timetable depends on federal antitrust review and approvals from the Federal Energy Regulatory Commission and the New York State Public Service Commission. In its general guidance, FERC says its review considers effects on competition, rates and regulation. That review matters because the deal shifts plants in multiple markets, where the buyer’s holdings and the structure of wholesale competition can differ. The announcement identifies the approvals the companies expect to need; it does not establish the outcome of those reviews.

NRG said in its initial filing that it would disclose the full purchase and sale agreement separately. That agreement and any conditions regulators attach to the sale will help clarify when the buyer can take control and when NRG can put the proceeds to use. Until then, the planned reduction in debt tied to the sale remains contingent on closing.