NRG scores $1.75 billion for its stake in Bay City nuke plant

Houston-based NRG Energy is selling its stake in the state’s largest nuclear power plant to Baltimore-based Constellation Energy for $1.75 billion, the companies said Thursday.

The South Texas Project nuclear power plant is about 90 miles southwest of Houston in Bay City, Constellation said, and is capable of generating 2,645 megawatts of electricity — enough to power just over half a million homes on a hot summer day, according to Texas’ grid operator.

Pending federal and state approval, Constellation plans to take over NRG’S 44 percent stake in the project by the end of the year. The city-owned utilities for San Antonio and Austin own the remaining stakes.

Constellation is already a major player in the Texas electricity market. The company owns and operates three natural gas-fired power plants with the ability to produce 3,250 megawatts of electricity, as well as two wind projects that can generate more than 150 megawatts. Constellation also owns retail electricity brands serving around 200,000 Texas homes and businesses, the company said.

The Nuclear Regulatory Commission, Department of Justice and the Public Utility Commission of Texas still need to approve the deal, which Constellation said should happen by the end of the year.

The sale makes good on NRG’S promise to investors it would sell off $500 million in assets this year. The deal exceeded that goal, the company said, and the proceeds will primarily be used for share repurchases.

The announcement comes weeks after activist investor Elliott Management — which holds a roughly 13 percent stake representing $1 billion in NRG — sent a letter to the company’s board criticizing the company’s financial performance in recent years, and among other things, called on the company to cut $500 million in costs and up shareholder returns.