Utility player NRG Energy will pay nearly $10 billion for 18 natural gas-fired power plants from LS Power in a move designed to prepare NRG for a domestic power market that’s set to soar.
The acquisition, which was announced May 12, essentially doubles NRG’s gas power generation to help fuel the oncoming data center construction boom and to add enough quick-start power plants that help balance electric grids with supplies of intermittent renewable energy.
“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,” said NRG chairman, president, and CEO Larry Coben in the announcement.
Along with an overall stock market rebound on May 12, NRG shares spiked by nearly 25% in early trading.
The deal includes a fleet of power plants scattered throughout the Northeast and Texas with about 13 gigawatts (GW) of combined power. The deal would essentially double NRG’s power generation capacity to over 25 GW.
One gigawatt can power roughly 800,000 homes per year.
U.S. grid demand was basically flat and increasing 0.2% per year for more than 15 years as of 2023, according to S&P Global Commodities Research. Now, it’s slated to rise 1.7% per year from 2024 to 2050—a seemingly subtle but sizable surge.
In addition, NRG said it is acquiring LS-owned CPower, a virtual power plant platform with power generation and grid energy management systems. CPower has about 6 GW of capacity, representing more than 2,000 commercial and industrial customers.
The cash-and-stock deal for $9.2 billion includes $6.4 billion in cash and $2.8 billion in stock. The assumption of debt and tax credits brings the total deal value to $12 billion, the companies said.
The deal is expected to close in the first quarter of 2026.
LS Power is expected to own roughly 11% of the pro forma NRG shares outstanding. But a portion of LS Power’s shares will be held in a voting trust so that it will always control less than 10% of the overall voting rights of NRG stock.
After the deal, LS Power will retain about 10 GW of power generation, including is renewable power and energy storage projects.
This story was originally featured on Fortune.com