Public Service Enterprise Group Inc. (PEG) agreed to sell its remaining Texas power-generating operations to a unit of Energy Capital Partners II LP for $335 million.

The New Jersey utility and generation company earlier this month had terminated the planned sale of the gas-fired Odessa plant in west Texas to High Plains Diversified Energy Corp., a local municipal utility group, at the same price.

The Odessa operation was one of two facilities put on the block early this year; the sale of the other, known as Guadalupe, was completed in the first quarter.

The latest deal is expected to close in the third quarter.

Asset deals in the U.S. power sector have increased as companies tackle continuing weakness in power prices and uncertainty over environmental regulations. Some buyers are looking for exposure to a possible rebound in regional power markets, while some sellers want to shed exposure to weak and often volatile power prices due to a prolonged slump in natural-gas prices. Wholesale electricity prices in the U.S. are tied heavily to gas prices.

PSEG in May reported its first-quarter profit rose 7.1% as its electric-and-gas business's profit increased.

Shares recently rose 0.4% to $31.71 premarket.

 
   -By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com 
 
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