NRG to sell six gas plants to LS Power for $4 billion to fund buybacks, debt reduction

NRG Energy said Monday it will sell six natural-gas-fired power plants with a combined 4.9 gigawatts of capacity to LS Power for $4 billion in cash, a deal the company is using to expand share repurchases and accelerate debt reduction after a major fleet buildup earlier this year.

The portfolio move came alongside a strong third-quarter earnings report. In a press release furnished with a Form 8-K filed with the Securities and Exchange Commission, the U.S. power company said it reaffirmed its 2026 financial guidance and issued an initial 2027 outlook. NRG said the sale supports a more aggressive capital-allocation plan aimed at returning cash to shareholders while preserving flexibility for growth investments.

For the quarter ended Sept. 30, NRG reported GAAP net income of $561 million, or $2.59 per share, on cash provided by operating activities of $1.097 billion. On an adjusted basis, the company posted net income of $983 million, or $4.68 per share, with adjusted EBITDA — earnings before interest, taxes, depreciation and amortization — of $2.013 billion. Free cash flow before growth investments was $1.242 billion.

NRG said the quarter benefited from contributions from the portfolio it acquired from LS Power in January, higher realized capacity prices in eastern power markets, and higher margins in Texas, including favorable weather. Those gains were partly offset by higher depreciation and amortization, higher interest expense, and unrealized non-cash losses on economic hedges.

The sale proceeds are central to NRG’s updated capital-allocation plans. The company said the expected cash supports a pro forma 2027 plan for $3 billion in share repurchases across 2026 and 2027, including an incremental $1 billion of buybacks set to begin before the end of the fourth quarter of 2026. After the asset sale closes, NRG plans an additional $2 billion of debt reduction, which would bring planned 2027 debt reduction to $3 billion. The remaining $1 billion of expected proceeds is earmarked for growth investments or additional debt reduction.

Separately, NRG announced a base 2027 capital-allocation plan that includes $1 billion of debt reduction, $1 billion of share repurchases and an 8% increase in its annual common dividend to $2.05 per share. Through Oct. 31, the company said it had already completed $977 million in share repurchases and paid $302 million in dividends.

“Our 17,000 employees delivered strong third quarter results that reflect the depth of NRG, with our eight million customers and a substantial generation business that produce steady earnings and cash flows,” Robert Gaudette, NRG’s president and CEO, said in the release. “Today’s announcement is about returning more to our shareholders and supporting future growth investments. We remain focused on execution and deliberate about how we allocate capital in pursuit of long-term value.”

The deal is notable because it follows a much larger transaction between the same companies. NRG closed its acquisition of about 13 gigawatts of natural-gas generation assets and CPower from LS Power on Jan. 30, 2026. Monday’s announcement signals a more selective reshaping of that expanded portfolio rather than a broader exit from generation. NRG said it will retain the entire PJM portfolio — assets in the large mid-Atlantic and Midwest power market run by grid operator PJM Interconnection — as well as CPower.

NRG reaffirmed its 2026 guidance for adjusted net income of $1.685 billion to $2.115 billion, adjusted earnings per share of $7.90 to $9.90, adjusted EBITDA of $5.325 billion to $5.825 billion, and free cash flow before growth investments of $2.8 billion to $3.3 billion.

For 2027, the company projected adjusted net income of $1.665 billion to $2.075 billion, adjusted earnings per share of $8.05 to $10.05, adjusted EBITDA of $5.5 billion to $6.0 billion, and free cash flow before growth investments of $2.9 billion to $3.4 billion. NRG said that outlook does not include the expected effects of the 4.9-gigawatt asset sale and that it will update 2027 guidance and capital allocation after the transaction closes.

The sale is expected to close in the second quarter of 2027, subject to customary conditions and regulatory approvals, including clearance under the Hart-Scott-Rodino antitrust law, approval from the Federal Energy Regulatory Commission, which oversees interstate power markets, and the New York State Public Service Commission. As of 11:19:35 UTC, NRG shares were up about 9.6% on the day at $88.29 in intraday trading.