The purchase price is subject to closing adjustments. The transaction includes the Colorado Bend Energy Center, a 550MW facility near Wharton, Texas, and Quail Run Energy Center, a 550MW facility near Odessa, Texas.
The proposed purchase will add 1,100MW of capacity to Constellation Energy’s generation portfolio and provides a physical presence of material scale in Electric Reliability Council of Texas (ERCOT), where the company’s wholesale and retail supply businesses sell a significant amount of power, Constellation said.
The acquisition is in line with the company’s strategy of deploying up to $1bn over the next 12-24 months to acquire assets in regions where the company’s load obligations exceed its generation capacity. Colorado Bend and Quail Run each have 275MW expansion projects in advanced development, creating the long-term potential to further balance Constellation’s generation capacity and customer supply obligations in ERCOT.
Mayo Shattuck III, chairman, president and CEO of Constellation Energy, said: “These modern, well-managed natural gas assets represent an important addition to our generation portfolio and are an ideal fit to support our expanding commercial businesses in Texas. Matching our generation and load-serving businesses in competitive markets should drive greater efficiencies in capital requirements, realized earnings and cash flow.”
The transaction is subject to certain state and federal regulatory approvals, including the expiration or termination of the waiting period under the Hart-Scott-Rodino act and standard terms and conditions. It is expected to close in the second quarter of 2010.
