Constellation Announces Agreement to Sell PJM Generation Assets to LS Power as Part of FERC, U.S. DOJ Resolution of Calpine Transaction

Core Viewpoint - Constellation Energy Corporation has announced an agreement to sell a portfolio of generation assets in PJM to LS Power, which is a significant step in fulfilling regulatory commitments related to Constellation's acquisition of Calpine [1][2]. Summary by Sections Transaction Details - The proposed sale includes approximately 4.4 gigawatts of predominantly natural gas-fired generation capacity located in Delaware and Pennsylvania, with a transaction value of $5 billion, equating to an acquisition price of approximately $1,142 per kilowatt [2][3]. - This transaction represents the largest portion of the divestitures mandated by the U.S. Department of Justice (DOJ) as part of its antitrust review of the Calpine transaction [2]. Regulatory Context - The agreement is part of a resolution with the DOJ that outlines a series of divestitures aimed at addressing competitive considerations in PJM and other markets, following FERC's approval in July 2025 [3]. - The closing of the transaction is contingent upon receiving regulatory approvals from the DOJ and FERC, along with other customary closing conditions [3]. Company Statements - Joe Dominguez, president and CEO of Constellation, emphasized the importance of this transaction in meeting DOJ requirements and advancing the company's strategic goals [3]. - Paul Segal, CEO of LS Power, highlighted the acquisition as a means to expand their footprint in PJM, which is experiencing a surge in electricity demand [4]. Financial Advisors - Santander is serving as the financial advisor for LS Power, while Barclays and SMBC/Jefferies are acting as M&A advisors for Constellation [5]. Remaining Assets - The Jack Fusco Energy Center, a 606-megawatt natural gas-fired facility in Texas, is the only remaining asset in the DOJ resolution agreement that has not yet been divested [6]. Company Background - Constellation Energy Corporation is the largest private-sector power producer globally, with a capacity of 55 gigawatts from various energy sources, providing about 10% of the nation's clean energy [8]. - LS Power, founded in 1990, has developed or acquired over 50,000 megawatts across more than 200 projects, making it a significant player in the North American power and energy infrastructure sector [9].