NRG to Sell Six Power Plants to LS Power for $4 Billion, Boosts Buybacks

NRG Energy (NYSE:NRG) has agreed to sell six power generation facilities to LS Power for $4 billion and lifted its share repurchase program by $1 billion, the company announced alongside third-quarter results that beat strongly on every key metric.

The assets carry a combined capacity of just under 4.9 gigawatts and sit in New York, Texas and New England. NRG expects the deal to close in the second quarter of 2027, pending regulatory approvals.

Why sell assets back to the seller?

President and CEO Robert Gaudette said LS Power approached NRG with an unsolicited offer valuing the plants at eight times their expected 2027 adjusted EBITDA (earnings before interest, taxes, depreciation and amortization). The facilities were part of a portfolio NRG bought from LS Power earlier in 2026.

"At that valuation, we saw a compelling opportunity to further focus our portfolio and create more value per share by redeploying the proceeds than by continuing to own those assets," Gaudette said.

The money has clear destinations. NRG raised planned buybacks to $3 billion across 2026 and 2027, starting the incremental $1 billion in 2026 — before the sale even closes. The base plan already had $1 billion in repurchases for 2026 and at least $1 billion for 2027. Another $2 billion of proceeds goes to debt reduction at closing, with the remaining $1 billion held for contracted growth or more deleveraging.

NRG keeps the entire PJM generation portfolio and CPower, its demand-response business (programs that pay customers to cut consumption at peak times), plus a substantial Texas fleet backing its residential arm. CFO Bruce Chung cautioned against reading the sale as a pivot toward retail: NRG simply viewed the sold assets as not core to its earnings power.

Takeaway: NRG is cashing out a non-core slice at a premium multiple and recycling it into buybacks and balance-sheet strength.

How strong were the quarter and the 2027 outlook?

Very. Q3 adjusted EBITDA came in at $2 billion, free cash flow before growth at $1.2 billion, and adjusted EPS at $4.68. Chung said all four key financial metrics rose at least 50% year over year, helped by the acquired LS Power portfolio, higher capacity revenue and consumer growth. Smart Home adjusted EBITDA climbed 14% on customer additions and higher recurring service margin.

NRG reaffirmed 2026 guidance, though Chung expects results slightly below the midpoint of the adjusted EBITDA range — ERCOT power prices have averaged nearly 40% under NRG's original planning assumption year to date.

For 2027, the company introduced midpoints of $5.75 billion in adjusted EBITDA, $3.15 billion in free cash flow before growth and $9.05 in adjusted EPS. That outlook still includes the assets being sold and will be updated post-closing. It absorbs $185 million of net wholesale price pressure — mostly lower ERCOT, partly offset by higher PJM — plus $100 million in Regional Greenhouse Gas Initiative compliance costs.

The company reaffirmed more than 14% compound annual growth in adjusted EPS and free cash flow per share through 2030, a rate Chung said applies over the full period, with or without the sale.

Where does the data center project stand?

Gaudette expects approved agreements for the initial 1.2-gigawatt Texas data center project by year-end. Terms are agreed; only internal processes remain, and no regulatory milestones block a signature. NRG has allocated $721 million in its 2026 base capital plan to the project.

Chung said NRG is talking to potential financing partners and ideally would line one up by year-end, though the process could slip into the new year. Partnerships will fund future opportunities; equity issuance is off the table.

On hedging (locking in prices for future output), NRG is 75% covered in ERCOT and 90% in PJM for 2027. Gaudette called current ERCOT prices depressed, citing battery and solar additions demand hasn't absorbed yet, and said NRG hedged to protect near-term cash flows while betting on longer-term price recovery.

Its first Texas Energy Fund plant came online in May; the two remaining plants should add about 4 terawatt-hours of annual generation in 2028, on schedule and on budget.

The message: NRG is monetizing at the top, hedging through the trough, and keeping its growth bets fully funded without new equity.