NRG EnergyInc. announced the sale of a majority stake in EVgo as part of abroader initiative to streamline its residential solar business, which is nowtransitioning to an originate-and-monetize to third-party model.
Vision Ridge Partners is buying the stake in EVgo for $50million of which $19.5 million is payable to NRG and the remainder contributedas capital to the business, subject to working capital adjustments.
NRG can earn an additional $70 million on the sale based onfuture adjusted EBITDA targets, the company announced in its May 5 earningsrelease.
On the solar business side, NRG entered agreements to beable to sell its residential solar contracts to and Spruce Finance Inc. sothey can provide support over the life of the contracts.
The streamlined business also means that the company'sresidential solar business will focus on three markets where it has a"well-established" foothold: New Jersey, New York and Massachusetts.NRG Energy is also maintaining a longer-term option to participate inNRG Retail LLC's coreTexas market as economics for residential solar improve.
All in all, the company expects to incur a one-time cost ofapproximately $20 million in 2016 to achieve its goals.
Additionally, the company plans to offer the remaining51.05% of the 250-MW California Valley Solar Ranch to during the currentquarter.
NRG Yield, a yieldco subsidiary of NRG Energy, currentlyowns a 48.95% stake in solar facility, which is contracted to sell power toPG&E Corp.subsidiary Pacific Gas andElectric Co. through 2038.