Dive Brief:

• NextEra Energy Resource, LLC, the competitive energy subsidiary of NextEra Energy, has sold its La Frontera gas-fired fleet in Texas to an affiliate of Energy Future Holdings for $1.59 billion, the two companies announced this week.
• Energy Future Holdings, which is currently working through a plan to exit bankruptcy, has already received court approval for the purchase and funding of the deal through its affiliate, Luminant, SNL Energy reports. 
• The deal includes the 1,912 MW Forney Energy Center, which began producing power in 2003, and the 1,076 MW Lamar Energy Center, which began commercial operation in 2000.

Dive Insight:

NextEra Resources is continuing to reduce the size of its merchant fleet, while at the same time taking that capital and reinvesting it into a portfolio of long-term contracted assets. The new deal sheds about 3,000 MW of gas-fired generation in the company's Texas fleet, all of which was less than 15 years old. The generation can power about 1.5 million homes.

The power facilities are being purchased by Luminant, a competitive generator and affiliate of EFH.

"This transaction enables us to further optimize our power generation assets and is consistent with our strategy of reducing our merchant exposure while recycling capital into our growing long-term contracted asset portfolio," NextEra Energy Resources President and CEO Armando Pimentel said in a statement.

A NextEra affiliate will continue to operate both of the power facilities for an initial period of up to one year. The deal is expected to close early next year, and following the sale, NextEra said its portfolio would include a mix of clean generating assets in 25 states, including Texas and Canada, with a combined capacity of approximately 17,000 MW.

"These plants are strategic investments that enhance our asset portfolio while building on our existing operations" in Texas markets," said Luminant CEO Mac McFarland.

While NextEra lists the purchase prise as $1.59 billion, Luminant used a $1.313 billion figure to estimate the acquisition values generation at $440/installed kilowatt. The deal, using Luminant's math, also included another $276 million for cash and capital.

The bankruptcy case to consider Energy Future Holdings' restructuring plan got started last month, potentially marking the final phase in the 18-month long effort to reorganize the company. As part of the plan, EFH will be split into two halves, with Hunt Consolidated leading a group of creditors which will own regulated utility Oncor and another group taking over the struggling power generation assets.

NextEra further complicated that bankruptcy saga last month by making an offer to buy Oncor itself, saying its restructuring plan would hold up to regulatory scrutiny better than Hunt's. 

Negotiations are ongoing and a sale is expected to value Oncor at $18 billion or more.