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Power provider NRG Energy, Inc. (NRG - Analyst Report) has clinched a deal to acquire the Gregory cogeneration plant in Corpus Christi, Texas, for approximately $244 million.

Per the deal, NRG Energy will purchase the plant from a group of affiliates of Atlantic Power Corporation, John Hancock Life Insurance Company (U.S.A.), and Rockland Capital, LLC. The transaction, which is subject to regulatory approval, is expected to close in the third quarter.

With this acquisition, NRG Energy will be able to expand its generation capacity in Texas where it is striving to enlarge its customer base. With a generation capacity of around 400 megawatts (MW) and steam capacity of 160 MW of electricity equivalent, this cogeneration Gregory plant also supplies steam, processed water and a small percentage of its electricity generation to the Corpus Christi Sherwin Alumina plant.

Most of the power output from the Gregory plant is offered for sale in the grid operated by the Electric Reliability Council of Texas (ERCOT). ERCOT controls the flow of electric power to 23 million Texas customers that is equivalent to 85% of the state's electric load.

Princeton, N.J.-based NRG Energy together with its subsidiaries operates as an integrated wholesale power generation and retail electricity company. The company’s fleet has a combined capacity of roughly 47,000 MW.

The company continues to maintain a strong financial position, with cash and cash equivalents of $2.1 billion as of Dec 31, 2012 compared with $1.1 billion as of Dec 31, 2011. Moreover, the company’s available liquidity stood at an impressive level of $3.6 billion as of Dec 31, 2012.

We believe the Texas power plant acquisition and the commencement of operations at the newly installed Alpine Generating Station and Avra Valley Solar Generating Station will further enable NRG Energy to meet the growing demand for power.

NRG Energy currently has a Zacks Rank #2 (Buy). Other companies in the sector that also look promising and are worth accumulating now include Brookfield Infrastructure Partners L.P. (BIP - Snapshot Report), Empresa Nacional de Electricidad S.A. (EOC - Snapshot Report) and Huaneng Power International, Inc. (HNP - Snapshot Report). All these companies sport a Zacks Rank #1 (Strong Buy).

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