Constellation Energy to buy stake in Texas nuclear plant

Published on June 07, 2023 by Dave Kovaleski

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Constellation Energy is acquiring NRG Energyʻs 44 percent ownership stake in the South Texas Project Electric Generating Station, a 2,645-megawatt nuclear plant.

The dual-unit plant, located about 90 miles southwest of Houston, is valued at $1.75 billion, with an effective purchase price of $1.4 billion after accounting for tax benefits to Constellation. The deal will be financed with a combination of cash and debt.

“The South Texas Project is an exceptionally well-maintained plant and its ability to produce resilient, carbon-free energy 24/7 makes it among the most valuable power sources in the world,” Joe Dominguez, president and CEO of Constellation, said. “With the potential to run for at least 46 more years with the right policy support, we look forward to working with the South Texas Project’s other owners to continue bringing clean, reliable electricity to this growing region for decades to come.”

The purchase is subject to approval by the Nuclear Regulatory Commission and Department of Justice. Constellation expects it to close by the end of the year. After that, Constellation will be one of three owners with oversight of the South Texas Project Nuclear Operating Company (STPNOC), which operates the plant. The nuclear plant is one of the newest and largest nuclear plants in the country.

BofA Securities is the exclusive financial advisor to Constellation on the deal while Sidley Austin LLP is the lead transaction counsel to the company.

Constellation has ownership interests in 13 generating stations with 23 nuclear units capable of producing approximately 21,000 megawatts of electricity.

Constellation Energy, headquartered in Baltimore, is the nation’s largest producer of clean, carbon-free energy. Its annual output is nearly 90 percent carbon-free, with energy coming from hydro, wind, and solar facilities, along with the nation’s largest nuclear fleet. It provides about 10 percent of the nation’s clean energy and has the generating capacity to power the equivalent of 15 million homes.