The city has tried unsuccessfully to sell off the plant's turbines to Venezuela. The Chinese company has indicated it may buy the whole plant.
Mayor Rudy Cabriales signed an agreement with turbine builder General Electric giving the city until April 16 to seal the deal.
That deadline would have to be extended if China Huadian Corp. decides to pursue the purchase.
Signing over the plant means the city would lose an estimated $100 million it had invested into the venture, including land acquisition, permitting, equipment and more.