CPS Energy invests $1.4B in Houston hydrogen-ready power plants

San Antonio-based CPS Energy has acquired four Houston-area power plants that are dual-fuel capable. Photo via Getty Images.

CPS Energy, which services San Antonio, has agreed to acquire four state-of-the-art natural gas power generation facilities in the Houston area from Missouri-based PROENERGY for $1.387 billion, according to a release.

The recently constructed plants have an aggregate electric capacity of 1,632 megawatts and are located in the Electric Reliability Council of Texas (ERCOT) markets in Harris, Brazoria and Galveston counties. The assets are dual-fuel capable, which would allow CPS Energy to transition to a hydrogen fuel blend and reduce carbon emissions.

CPS president and CEO Rudy Garza said that the acquisition presents a lower cost and lower supply chain risk alternative to building new power facilities while providing reliable, affordable and cleaner energy.

“We are getting the best of both worlds by securing new infrastructure without delay while also strengthening the power supply for our community,” Garza said in a news release. “This acquisition secures reliable capacity today – at a lower cost – and is a win for the customers of CPS Energy, the city of San Antonio and all the communities we serve by meeting their long-term energy needs. As we add resources to meet the needs of our fast-growing communities, we will continue to look to a diverse balance of energy sources that complement our portfolio, including natural gas, solar, wind, and storage, keeping our community powered and growing.”

PROENERGY will continue to staff, operate, and maintain the plants.

“By acquiring recently constructed, currently operating modern power plants that utilize proven technology already in use by CPS Energy, we avoid higher construction costs, inflationary risk, and long timelines associated with building new facilities – while also enhancing the reliability and affordability of the CPS Energy generation portfolio,” Garza added in the release.

CPS Energy is one of the nation’s largest public power, natural gas, and electric companies with 950,000 electric and 389,000 natural gas customers in the San Antonio area and surrounding counties.

Trending News

A View From HETI

Texas outpaced the rest of the country in a new energy resilience report, despite grid challenges and rising AI demand. Photo courtesy of ERCOT

A new report by mineral group Texas Royalty Brokers ranks Texas as the No. 1 most energy-resilient state.

The study focused on four main sources of electricity in hydroelectric dams, natural gas plants, nuclear reactors and petroleum facilities. Each state was given an Energy Resilience Score based on size and diversity of its power infrastructure, energy production and affordability for residents.

Texas earned a score of 71.3 on the report, outpacing much of the rest of the country. Pennsylvania came in at No. 2 with a score of 55.8, followed by New York (49.1) and California (48.4).

According to the report, Texas produces 11.7 percent of the country’s total energy, made possible by the state’s 141,000-megawatt power infrastructure—the largest in America.

Other key stats in the report for Texas included:

  • Per-capita consumption: 165,300 kWh per year
  • Per-capita expenditures: $5,130 annually
  • Total summer capacity: 141,200 megawatts

Despite recent failures in the ERCOT grid, including the 2021 power grid failure during Winter Storm Uri and continued power outages with climate events like 2024’s Hurricane Beryl that left 2.7 million without power, Texas still was able to land No. 1 on an energy resilience list. Texas has had the most weather-related power outages in the country in recent years, with 210 events from 2000 to 2023, according to an analysis by the nonprofit Climate Central. It's also the only state in the lower 48 with no major connections to neighboring states' power grids.

Still, the report argues that “(Texas’ infrastructure) is enough to provide energy to 140 million homes. In total, Texas operates 732 power facilities with over 3,000 generators spread across the state, so a single failure can’t knock out the entire grid here.”

The report acknowledges that a potential problem for Texas will be meeting the demands of AI data centers. Eric Winegar, managing partner at Texas Royalty Brokers, warns that these projects consume large amounts of energy and water.

According to another Texas Royalty Brokers report, Texas has 17 GPU cluster sites across the state, which is more than any other region in the United States. GPUs are specialized chips that run AI models and perform calculations.

"Energy resilience is especially important in the age of AI. The data centers that these technologies use are popping up across America, and they consume huge amounts of electricity. Some estimates even suggest that AI could account for 8% of total U.S. power consumption by 2030,” Winegar commented in the report. “We see that Texas is attracting most of these new facilities because it already has the infrastructure to support them. But we think the state needs to keep expanding capacity to meet growing demand."

Trending News