Texas Genco
| Company type | Private |
|---|---|
| Industry | Energy generation |
| Predecessor | Houston Lighting & Power (HL&P) |
| Founded | 2001 |
| Headquarters | Houston , United States |
Area served | Houston region, Texas |
| Parent | CenterPoint Energy (until 2004), then owned by private equity consortium, later acquired by NRG Energy |
Texas Genco was an energy generation firm created during the deregulation of the Texas electricity market, operating several power stations supplying the Houston region. Founded in 2001 as a result of market restructuring, incumbent utilities were required to separate into retail electric providers (REPs), transmission and distribution service providers (TDSPs), and wholesale generation companies.
In 2000, Reliant Energy divided into regulated and unregulated segments, forming Reliant Resources to handle unregulated electricity and energy operations, while CenterPoint Energy took over regulated energy delivery services. The power plants previously owned by Reliant Energy became a wholly owned subsidiary of CenterPoint Energy and were renamed Texas Genco.
As part of the deregulation process, the former Houston Lighting & Power (HL&P) was split in 2003 into three distinct entities: Reliant Energy, Texas Genco, and CenterPoint Energy.
Toward the end of 2004, a consortium of four private equity firms—Texas Pacific Group, Blackstone Group, Kohlberg Kravis Roberts, and Hellman & Friedman—purchased Texas Genco from CenterPoint Energy for around $1.9 billion, investing $900 million in cash. At that time, Texas Genco ranked as the second-largest power generation operator within Texas.
By late 2005, these investors sold Texas Genco to NRG Energy for approximately $5.9 billion, achieving close to $5 billion in profits over an 18-month span—marking one of the most lucrative private equity transactions in recent history.
See also
External links
- Deregulation of the Texas electricity market
- "The Deal That Even Awed Them in Houston," by Simon Romero, The New York Times