Centrica has announced selling three gas-fired power stations in Texas

Centrica to sell gas-fired power plants in Texas

Centrica's North American subsidiary Direct Energy will sell its gas-fired power stations in Texas to Blackstone for $685m (£420m), it has been announced.

The three stations located in Paris, Bastrop, and Mission have a combined capacity of 1,295MW.  

As part of the transaction, Direct Energy has also entered into a three year call option arrangement for an equivalent amount of capacity with Blackstone.

“This transaction allows us to realise value from our gas-fired fleet, while ensuring stability of price and supply in the Texas power market through the call option arrangement,” said Badar Khan, President and CEO of Direct Energy.

“Residential retail supply is key to our North American business, and with sufficient generation capacity in Texas, we can support our downstream business through contractual arrangements, rather than asset ownership.”

Centrica will return the proceeds from this sale to shareholders through a £420 million extension of its share repurchase programme, which will be conducted over the course of 2014.

Shares in Centrica were up 2.5 per cent at 331.2 pence by 10.47am GMT, having previously dropped following the debate around energy prices for consumers in the UK and the announcement of the the Labour leaders to freeze prices in case Labour wins the 2015 election.

The shares fell further last month when Centrica cut its 2013 earnings forecast, citing not only rising costs in Britain but also intensifying competition in the United States.

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