Constellation Energy Signs $365 Million Agreement with Navasota Holdings to Purchase Two 550-Megawatt Natural Gas Facilities ...
April 16 2010 - 8:00AM
Business Wire
Constellation Energy (NYSE:CEG) today announced it has signed an
agreement with Houston-based Navasota Holdings to purchase two
natural gas combined-cycle generation facilities in Texas for $365
million, the equivalent of $332 per kilowatt. The purchase price is
subject to closing adjustments. The transaction includes the
Colorado Bend Energy Center, a 550-megawatt facility near Wharton,
Texas, and Quail Run Energy Center, a 550-megawatt facility near
Odessa, Texas.
The proposed purchase would add 1,100 megawatts of capacity to
Constellation Energy’s generation portfolio and provides a physical
presence of material scale in ERCOT (Electric Reliability Council
of Texas), where the company’s large wholesale and retail supply
businesses sell a significant amount of power. The acquisition is
in line with the company’s previously announced strategy of
deploying up to $1 billion 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
275-megawatt expansion projects in advanced development, creating
the long-term potential to further balance Constellation Energy’s
generation capacity and customer supply obligations in ERCOT.
“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,” said Mayo
A. Shattuck III, chairman, president and chief executive officer of
Constellation Energy. “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.
Navasota Energy Partners LP is a Houston-based energy
development and asset management company that builds and manages
power plants throughout the state of Texas.
Citi served as transaction adviser for Constellation Energy;
Kirkland and Ellis LLP served as Constellation’s legal counsel.
J.P. Morgan acted as Navasota Holdings’ financial adviser; Milbank,
Tweed, Hadley & McCloy LLP acted as legal counsel to certain
holders of Navasota Holdings.
About Constellation Energy
Constellation Energy (www.constellation.com) is a leading
supplier of energy products and services to wholesale and retail
electric and natural gas customers. It owns a diversified fleet of
generating units located in the United States and Canada, totaling
approximately 7,100 megawatts of generating capacity, and is among
the leaders pursuing the development of new nuclear plants in the
United States. The company delivers electricity and natural gas
through the Baltimore Gas and Electric Company (BGE), its regulated
utility in Central Maryland. A FORTUNE 500 company headquartered in
Baltimore, Constellation Energy had revenues of $15.6 billion in
2009.
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