NRG Planning New Power Plants

To capitalize on increasing electricity demand, NRG Energy Inc. plans to spend as much as $16 billion on new power plants in California and other states, including nuclear reactors in Texas, the Princeton, N.J., company said Wednesday.

The 10-year expansion, to be financed through partnerships and borrowings, would increase the company’s U.S. generation capacity by 46%, NRG said. The new plants would generate 10,500 megawatts, enough power for about 8 million average U.S. homes.

NRG Energy was among the power producers that were forced into bankruptcy protection by crushing debt taken on for an expansion binge in the late 1990s. This time, analysts said, there should be enough power demand to merit the new plants.

“NRG is very aggressive and perceptive in realizing that in 2009 or 2010, the country is going to be short of power again,” said Edward Tirello, managing director and senior power analyst at Berenson & Co., a New York investment bank.

Shares of NRG rose 72 cents, or 1.5%, to $47.85.

As part of its building binge, NRG has allocated $1.5 billion to California and other Western projects, including new electricity-generating units in El Segundo, Long Beach and the San Diego area totaling 1,875 megawatts.