NRG Energy, one of the largest producers of electricity in Texas, will become the largest power producer in the country once it completes the $1.7 billion acquisition of GenOn Energy.
Yet, NRG’s growth ambitions still don’t include any plans to build new power plants in Texas. Sighting low wholesale electricity rates in Texas, NRG CEO David Crane reiterated that the company is in no hurry to invest any more capital in the Texas market.
“We stand ready at our sites to build more as soon as pricing tells us it’s time to build. The pricing point hasn’t been there yet,” Crane said earlier this week.
This further illustrates the irony of low electric prices in Texas. While cheap electricity has been great for consumers in the short term, producers and electricity providers are struggling to make money with rates so low. The resulting disconnect between supply and the growing demand for electricity threatens to being an end to the recent run of low electricity rates in Texas.
The NRG and GenOn merger is an all stock deal and is expected to be completed in 2013 pending shareholder approval. The combined company will own over 47,000 megawatts in electric generation capacity spanning the continental U.S.reaching from California to New York and, of course,Texas.
NRG is one of the largest employers in the Houston area; employing around 1,400 people.