The 44% stake acquired by Constellation represents around 1.1GW of output from the South Texas Project Electric Generating Station
Constellation becomes one of the three owners of the South Texas Project Electric Generating Station. (Credit: United States Nuclear Regulatory Commission/Wikimedia Commons)
Constellation has wrapped up the previously announced $1.75bn acquisition of NRG Energy’ stake of 44% in the South Texas Project Electric Generating Station (STP), a 2.6GW nuclear power plant in Texas, US.
The effective purchase price comes down to $1.4bn after taking into account the value of tax benefits to Constellation at the time of announcing the deal in June 2023. The deal closed after receiving its final approval, which was from the US Nuclear Regulatory Commission.
The dual-unit nuclear plant located along the Colorado River’s west bank in Matagorda County, nearly 144km southwest of Houston.
Constellation’s 44% stake represents around 1.1GW of output from the South Texas Project Electric Generating Station.
Constellation president and CEO Joe Dominguez said: “Growing our fleet of the nation’s best-run nuclear plants is at the heart of our growth strategy.
“As the world is waking up to the immense value of nuclear power to address the climate crisis and maintain energy security, Constellation will continue to look for opportunities to expand our ownership of assets like STP.
“We look forward to working with our new co-owners and the plant’s team members to provide reliable, clean and affordable energy, as well as economic benefits to the people of Texas.”
The company’s partners in the nuclear power plant are Austin Energy (16%) and CPS Energy (40%).
Operating since 1988, the South Texas Project Electric Generating Station provides clean energy to nearly two million homes in Texas. It will be continued to be operated by its holding company, South Texas Project Nuclear Operating Company (STPNOC).
For NRG Energy, the sale of its stake in the nuclear power plant was taken up to unlock significant share value. It was executed by the company’s subsidiaries Texas Genco LP and Texas Genco GP.
NRG Energy president and CEO Mauricio Gutierrez said: “Completion of the sale is an important step in creating shareholder value through optimising our diversified power supply portfolio.
“This transaction will release significant capital to fund our current share repurchase and debt reduction programmes.”
Barclays Capital and Morgan Stanley & Co. provided financial advisory services for NRG Energy, while McGuireWoods served as legal counsel. On the other hand, BofA Securities acted as Constellation’s sole financial advisor in the deal, with Sidley Austin playing the primary role as the company’s legal counsel.