Constellation increases US reach with major acquisition

Constellation’s nuclear fleet, together with its renewable energy assets, already provides about 10% of the USA’s emissions free energy. Combining this with Calpine’s low-emission natural gas generation and expanded renewable energy portfolio, including the largest geothermal generation operation in the USA, will create the cleanest and most reliable generation portfolio in the country, with nearly 60 GW of capacity from zero- and low-emission sources, including nuclear, natural gas, geothermal, hydro, wind, solar, cogeneration and battery storage, Constellation said. The combined company’s footprint will include a “significantly expanded” presence in Texas, the fastest growing market for power demand in the USA, and other key strategic states, including California, Delaware, New York, Pennsylvania and Virginia.

The combination will also form the nation’s leading competitive retail electric supplier, serving some 2.5 million customers.

“This acquisition will help us better serve our customers across America, from families to businesses and utilities,” said Constellation President and CEO Joe Dominguez. “By combining Constellation’s unmatched expertise in zero-emission nuclear energy with Calpine’s industry-leading, best-in-class, low-carbon natural gas and geothermal generation fleets, we will be able to offer the broadest array of energy products and services available in the industry.”

Calpine President and CEO Andrew Novotny described the move as an “incredible opportunity” to bring together top tier generation fleets. “Together, we will be better positioned to bring accelerated investment in everything from zero-emission nuclear to battery storage that will power our economy in a way that puts people and our environment first. It’s a win for every American family and business in our newly combined footprint that wants clean and reliable energy.”

The transaction is expected to close within 12 months of signing, subject to the satisfaction of customary closing conditions and regulatory approvals. Following the close of the transaction, Constellation will continue to be headquartered in Baltimore and said it will continue to maintain a significant presence in Houston, where Calpine is currently headquartered.

Earlier this month, the US General Services Administration awarded Constellation a ten-year, USD840 million contract to supply electricity to federal facilities, and in September the company signed a 20-year power purchase agreement with Microsoft that will see Three Mile Island unit 1, which shut down in 2019, restarted as the Crane Clean Energy Centre.

Calpine was acquired by Energy Capital Partners in 2018. In addition to its fleet of simple and combined cycle gas plants and co-generation facilities, the company’s generating portfolio includes The Geysers, the largest complex of geothermal energy facilities in the world. Located in the Mayacamas Mountains, north of San Francisco, the complex of geothermal plants uses wells – some of which are more than two miles (over 3 kilometres) deep – to tap naturally occurring steam which is used to generate electricity in turbines.