Constellation to Sell PJM Generation Assets to LS Power as Part of Calpine Deal Commitments
Constellation Energy Corporation (Nasdaq: CEG) and LS Power Equity Advisors, LLC have announced a definitive agreement under which Constellation will sell a significant portfolio of power generation assets located in the PJM Interconnection market. The transaction forms a key component of Constellation’s regulatory commitments connected to its acquisition of Calpine Corporation and represents one of the largest divestiture packages required as part of the merger review process.
Under the agreement, LS Power will acquire approximately 4.4 gigawatts (GW) of primarily natural gas–fired power generation capacity located in the states of Delaware and Pennsylvania. The portfolio includes several well-established generating facilities that play an important role in supplying electricity to the region. The assets being sold include the Bethlehem, York 1, York 2, Hay Road, and Edge Moor generation facilities.
The transaction is valued at approximately $5 billion before closing adjustments, which equates to an acquisition price of roughly $1,142 per kilowatt of installed capacity. The agreement represents the largest portion of the divestitures mandated by the U.S. Department of Justice during its antitrust review of the Calpine acquisition. It also fulfills all generation asset divestitures required by the Federal Energy Regulatory Commission.
Major Step in Addressing Regulatory Requirements
Constellation executives described the agreement as a critical milestone in fulfilling the commitments made to regulators while ensuring the continued reliable operation of the assets.
Joe Dominguez, president and chief executive officer of Constellation, said the agreement marks a major step in completing the regulatory process associated with the company’s transformational acquisition of Calpine.
“These facilities are well-operated and play an essential role in providing reliable power to homes and businesses,” Dominguez said. “Reaching this agreement allows us to meet the Department of Justice’s requirements while ensuring that the assets remain in capable hands and continue serving customers and communities across the PJM market.”
He added that Constellation expects to complete the remaining obligations outlined in the DOJ agreement later this year, once the necessary regulatory reviews and closing conditions have been satisfied.
Background on the Calpine Acquisition Review
Constellation’s acquisition of Calpine was subject to extensive regulatory review due to the combined company’s substantial footprint in competitive wholesale power markets. In July 2025, the Federal Energy Regulatory Commission approved the transaction but required the divestiture of certain generation assets located in the PJM region in order to preserve competitive market conditions.
Subsequently, in December 2025, Constellation reached a formal resolution with the U.S. Department of Justice regarding antitrust concerns related to the deal. The agreement required the company to divest a number of generating facilities in several markets to mitigate potential impacts on competition.
The sale of the PJM asset portfolio to LS Power represents the largest and most significant component of those required divestitures. By transferring these assets to an independent operator, regulators aim to maintain competitive dynamics within the PJM wholesale electricity market while allowing the broader merger between Constellation and Calpine to proceed.
Completion of the transaction remains subject to customary closing conditions and regulatory approvals, including review by both the DOJ and FERC.
LS Power Strengthens Position in PJM Market
For LS Power, the acquisition significantly expands its presence in one of the United States’ most important electricity markets. The PJM Interconnection operates the largest wholesale electricity market in North America and manages the flow of power across a grid that serves more than 65 million people across multiple states.
Paul Segal, chief executive officer of LS Power, highlighted the strategic importance of the PJM region and the role that dispatchable power plants will continue to play in meeting growing electricity demand.
“PJM sits at the center of a rapidly increasing demand for electricity,” Segal said. “The assets we are acquiring represent exactly the type of generation the grid requires—high-efficiency natural gas plants capable of delivering reliable power around the clock.”
He noted that as electrification accelerates and data-center demand increases, the grid will require flexible and dependable generating resources to complement renewable energy sources.
Experience in Gas-Fired Generation
LS Power has more than three decades of experience in developing, building, owning, and operating natural gas–fired power plants throughout the United States. The firm has long been active in the PJM region and other major wholesale electricity markets.
Segal said the company expects the transition of ownership to occur smoothly due to its extensive operational experience and its commitment to maintaining strong relationships with employees and local communities.
“Our team has been operating gas-fired generation for over 35 years,” he said. “We look forward to integrating these facilities and working closely with plant personnel and the communities surrounding the sites to ensure continued reliable service.”
The company also emphasized that the plants will remain an important part of the regional power supply as electricity demand continues to grow.
Additional Development Plans
Beyond this acquisition, LS Power’s development arm is pursuing a pipeline of new energy infrastructure projects across the United States. These projects include both traditional baseload generation facilities and modern energy systems designed to support grid reliability and long-term power demand growth.
The company has been actively evaluating opportunities to develop additional generation capacity in several U.S. power markets as demand from industries such as data centers, manufacturing, and electrified transportation expands.
Advisors on the Transaction
Both Constellation and LS Power have engaged prominent financial and legal advisors to support the transaction.
For LS Power, Santander is serving as financial advisor, while the law firms White & Case LLP and Willkie Farr & Gallagher LLP are providing legal counsel.
Constellation’s financial advisory team includes Barclays along with SMBC and Jefferies, which are acting as M&A advisors on the sale. Legal counsel for Constellation is being provided by Kirkland & Ellis.
Remaining Divestitures Under DOJ Agreement
While the PJM portfolio sale represents the largest divestiture required under the DOJ settlement, a small number of additional assets were also included in the agreement.
Earlier in the year, Constellation divested its minority ownership interest in the Gregory Power Plant, a 385-megawatt natural gas combined-cycle facility located near Corpus Christi, Texas.
One remaining asset still subject to divestiture under the DOJ agreement is the Jack Fusco Energy Center, a 606-megawatt natural gas-fired combined-cycle plant located outside Houston, Texas. Constellation has indicated that it is continuing efforts to complete the sale of this facility as part of fulfilling its commitments to regulators.
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