Centrica buys Texas power generator for $270m in cash

Centrica, the big six UK energy provider that owns British Gas, has agreed to buy First Choice Power, the Texas-based electricity generator, for $270m (£174m) in cash.

The UK company is buying First Choice, a wholly owned unit of New Mexico power provider PNM Resources, to access its 220,000 residential and business electricity customers. Centrica also owns First Choice's Texas rival Direct Energy, and its latest acquisition gives the group a total of 830,000 customers in the state.

Centrica is keen to expand its business in energy-hungry America, where population growth and a slowdown in environmental restraints are set to ensure significant growth in electricity consumption in the coming years. Chris Weston, chief executive of Direct Energy, said: "This acquisition is another important step towards growing scale and leadership in our North American business."

Centrica's North American business reported a 25 per cent jump in operating profits to £175m in the first six months of the year, as Direct Energy increased sales of power to corporations.

In the UK, Centrica's UK residential power operation reported a 54 per cent drop in first-half operating profits to £270m.