Upon closing, which is expected by the end of this year, Constellation will be one of three owners with oversight of the South Texas Project Nuclear Operating Company (STPNOC), which will continue to operate the plant

South_Texas_Nuclear_Generating_Station

South Texas Nuclear Generating Station. (Credit: United States Nuclear Regulatory Commission/Wikipedia)

US-based nuclear plants operator Constellation has agreed to acquire NRG Energy’s 44% ownership stake in the South Texas Project (STP) electric generating station, in Texas.

STP is a 2.6GW dual-unit nuclear plant located about 90 miles (150km) southwest of Houston, Texas, US.

The acquisition is valued at $1.75bn, with an effective purchase price of $1.4bn after considering the present value of tax benefits to the company.

The transaction is expected to be completed by year end, subject to approval by the Nuclear Regulatory Commission (NRC) and Department of Justice.

Upon closing, Constellation will be one of three owners with oversight of the South Texas Project Nuclear Operating Company (STPNOC), which will continue to operate the plant.

Constellation intends to finance the transaction with a combination of cash and debt.

Constellation president and CEO Joe Dominguez said: “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.

“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.”

Constellation operates nuclear plants with a fleetwide capacity factor of more than 94% over the past decade, or about 4% higher than the industry average.

The company owns stake in 13 power generating stations with 23 nuclear units that produce around 21,000MW of electricity, adequate clean energy to power about 15 million homes.

It owns and operates 3,520MW of natural gas-fired generation at its Colorado Bend II, Wolf Hollow II and Handley generating stations in Texas.

Constellation also supplies electricity, natural gas, energy efficiency and other services to about 200,000 residential and commercial customers across the state.

BofA Securities served as the exclusive financial advisor, and Sidley Austin as the lead transaction counsel to the US power plant operator, on the transaction.