[STRATEGIC] Energy / Power Generation ·
ERCOT · Utility Cooperative M&A —
April 10, 2026 — CLOSED
South Texas Electric Cooperative Buys Two
384MW Gas Plants from PROENERGY for $768M — Securing 768MW of Fast-Start
Capacity for Texas Grid
Victoria, Texas-based South Texas Electric Cooperative (STEC)
closes its largest-ever single acquisition: $768 million for the Braes Bayou
and Brotman natural gas power plants in the ERCOT market — adding exactly 768
megawatts of fast-start generation capacity to serve the cooperative's
47-county Central and South Texas service territory at a moment of
unprecedented electricity demand growth driven by AI data centers, population
growth, and industrial expansion.
DEAL SNAPSHOT
|
DEAL VALUE $768 Million (all-cash) |
ASSETS ACQUIRED Braes Bayou (384MW, Fort
Bend County) + Brotman (384MW, Brazoria County) |
|
CLOSED April 10, 2026 |
TOTAL CAPACITY ADDED 768 MW of fast-start
natural gas-fired generation |
|
SELLER PROENERGY (Sedalia,
MO-based power generation company) |
STEC SERVICE TERRITORY 47 Central and South
Texas counties |
THE PARTIES
|
ACQUIRER South Texas Electric
Cooperative, Inc. (STEC) Victoria,
Texas-based electric cooperative. President of the Board: Barbara S. Miller.
STEC is a generation and transmission (G&T) cooperative that provides
wholesale electricity to 12 member distribution cooperatives serving 47
Central and South Texas counties. STEC has been executing a multi-year
capacity expansion strategy to meet rising electricity demand across its
territory — driven by rapid population growth in Texas, expanding industrial
activity (petrochemical, manufacturing), and the explosive growth in AI and
data center power consumption across the state. The Braes Bayou and Brotman
acquisition follows several years of deliberate planning and due diligence.
Legal advisor: Latham & Watkins LLP (for PROENERGY as sell-side). |
SELLER PROENERGY (Sedalia,
Missouri) Missouri-based
power generation company specializing in natural gas-fired generation using
proprietary turbine technology, including its PE6000 turbine packages.
PROENERGY designed, built, and operated the Braes Bayou and Brotman
generating stations in the ERCOT market — both completed within the last four
years (Braes Bayou June 2022; Brotman May 2023). The fast-start capability of
these plants — designed to ramp from cold to full output in under 10 minutes
using PROENERGY-manufactured packages — makes them ideal peaking assets for
grid stability. PROENERGY retains its turbine technology business and other
generation assets following the divestiture. |
DEAL OVERVIEW
South Texas
Electric Cooperative closed the acquisition of the Braes Bayou and Brotman
Generating Stations from PROENERGY for $768 million on April 10, 2026. The
Braes Bayou Power Plant, located in Fort Bend County, achieved commercial
operation in June 2022 and generates 384 megawatts. The Brotman Power Plant, in
Brazoria County, achieved commercial operation in May 2023 and generates an
equal 384 megawatts. Together, the two facilities add exactly 768 megawatts of
ERCOT-registered fast-start capacity to STEC's portfolio — representing one of
the largest single generation acquisitions by a Texas electric cooperative in
history.
Both plants are
equipped with PROENERGY's PE6000 turbine packages and associated generation
equipment — purpose-built for fast-start operations critical to ERCOT's grid
balancing needs in a system dominated by intermittent solar and wind
generation. In ERCOT, fast-start gas-fired capacity is among the most valuable
grid assets because of its ability to respond to sudden supply-demand
imbalances in minutes rather than hours.
"As Texas experiences unprecedented load growth — driven by rapid
population gains, expanding industrial activity, and the rise of AI and data
centers — this investment ensures we are well positioned to support both the
grid and the Central and South Texas region for decades to come."
— Barbara S.
Miller, President, STEC Board of Directors
THE TEXAS POWER DEMAND CRISIS
The Electric
Reliability Council of Texas (ERCOT) is experiencing the most dramatic demand
growth of any major US grid. Population inflows (Texas added over 500,000 net
new residents in 2025), a manufacturing renaissance driven by reshoring and
semiconductor fab construction (Samsung's Taylor fab, TSMC's planned Texas
expansion), and the AI data center boom have combined to overwhelm ERCOT's
planning models. Texas is now the state with the largest concentration of
planned data center capacity in the United States, with over 20 gigawatts of
data center load in various stages of development. Each gigawatt of data center
capacity requires fast-start backup generation, creating surging demand for
exactly the type of assets STEC just acquired.
ADVISORS
Sell-side
Legal (PROENERGY): Latham &
Watkins LLP
Buy-side
(STEC): Not publicly disclosed