Texas Genco was a power generation company that came about as part of the deregulated Texas electricity market and owned numerous power plants in the

Houston Houston (; ) is the most populous city in Texas, the most populous city in the Southern United States, the fourth-most populous city in the United States, and the sixth-most populous city in North America, with a population of 2,304,580 i ...

area that serve area power needs. The Company was created in 2001 as part of the Texas electricity market deregulation. Incumbent utilities were required to separate their business functions into a retail electric provider (REP), a transmission and distribution service provider (TDSP), and a wholesale generator. In 2000, Reliant Energy announced that it was splitting its business into separate regulated and unregulated businesses. This split formed Reliant Resources, an unregulated electricity and energy company, and Centerpoint Energy, the remaining mostly regulated energy delivery company."Company History." Company History. CenterPoint Energy, n.d. Web. 05 May 2013 Reliant Energy's power plants became a wholly owned subsidiary of Centerpoint Energy. The new company was known as Texas Genco. When the state of Texas deregulated the electricity market, the former

Houston Lighting & Power Houston Lighting & Power Co. (HL&P), later named Reliant Energy HL&P/Entex, was the single power and utility company that served Greater Houston of the U.S. state of Texas. It was a subsidiary of Houston Industries (HI, NYSE: HOU), which later wa ...

(HL&P) was split into several companies.Exelon bids for major Texas power producer NRG
" ''

Houston Chronicle The ''Houston Chronicle'' is the largest daily newspaper in Houston, Texas, United States. , it is the third-largest newspaper by Sunday circulation in the United States, behind only ''The New York Times'' and the ''Los Angeles Times''. With i ...

''. October 20, 2008. Retrieved on April 14, 2014. "The plants were originally part of the former Houston Lighting & Power, the integrated utility that served the Houston area until it was broken up into three separate companies as the state deregulated its power markets." In 2003 HL&P was split into

Reliant Energy Reliant Energy is an American energy company based in Houston, Texas. History Headquartered in Houston, Texas, Reliant Energy, a subsidiary of NRG Energy, is one of the largest Texas electricity providers serving over 1.5 million Texans. Relian ...

, Texas Genco, and

CenterPoint Energy CenterPoint Energy, Inc. is an American Fortune 500 electric and natural gas utility serving several markets in the American states of Indiana, Ohio, Louisiana, Minnesota, Mississippi, and Texas. It was formerly known as Reliant Energy (from wh ...

.Fowler, Tom.
8 Houston power plants to be sold to NRG
" ''

''. October 2, 2005. Retrieved on April 14, 2014. Seeking opportunities arising out of the deregulation of the electricity industry in Texas, in late 2004 four private equity firms—the

Texas Pacific Group TPG Inc., previously known as Texas Pacific Group and TPG Capital, is an American investment company based in Fort Worth, Texas. The private equity firm is focused on leveraged buyouts and growth capital. TPG manages investment funds in growth ...

, the

Blackstone Group Blackstone Inc. is an American alternative investment management company based in New York City. Blackstone's private equity business has been one of the largest investors in leveraged buyouts in the last three decades, while its real estate bu ...

Kohlberg Kravis Roberts KKR & Co. Inc., also known as Kohlberg Kravis Roberts & Co., is an American global investment company that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate, credit, and, through its strate ...

, and

Hellman & Friedman Hellman & Friedman LLC (H&F) is an American private equity firm, founded in 1984 by Warren Hellman and Tully Friedman, that makes investments primarily through leveraged buyouts as well as growth capital investments. H&F has focused its efforts ...

of San Francisco—combined forces to purchase Texas Genco from the transmission & distribution provider utility

Centerpoint Energy CenterPoint Energy, Inc. is an American Fortune 500 electric and natural gas utility serving several markets in the American states of Indiana, Ohio, Louisiana, Minnesota, Mississippi, and Texas. It was formerly known as Reliant Energy (from wh ...

for Houston. This coalition of firms acquired Texas Genco—which was the second largest operator of power generation facilities in the state—for a price of approximately $1.9 billion and using just $900 million in cash. In late 2005, these private equity firms announced the sale of Texas Genco to

NRG Energy NRG Energy, Inc. is an American energy company, headquartered in Houston, Texas. It was formerly the wholesale arm of Northern States Power Company (NSP), which became Xcel Energy, but became independent in 2000. NRG Energy is involved in ener ...

of Princeton, N.J., for a price of roughly $5.9 billion. The investors achieved a gain of almost $5 billion over the space of an investment holding period of less than 18 months, a return that will mark one of the most lucrative

private equity In the field of finance, the term private equity (PE) refers to investment funds, usually limited partnerships (LP), which buy and restructure financially weak companies that produce goods and provide services. A private-equity fund is both a t ...

investments in recent years.

External links

Deregulation of the Texas electricity market The Texas electricity market is deregulated, meaning that there is competition in the generation and distribution of electricity. Power generators in the Texas Interconnection, managed by the Electric Reliability Council of Texas, participate in an ...

"The Deal That Even Awed Them in Houston," by Simon Romero, ''The New York Times''

References

NRG Energy Companies based in Houston Companies established in 2001 Energy in Texas Corporate subsidiaries

See also

External links

References