Constellation Reaches Final DOJ Approval to Complete Calpine Acquisition, Marking a Major Milestone in U.S. Energy Sector Transformation
Constellation (Nasdaq: CEG) announced that it has successfully reached a resolution with the U.S. Department of Justice (DOJ) regarding the regulatory conditions required to finalize its acquisition of Calpine Corporation, one of the nation’s largest independent power producers. This decision represents the final major regulatory approval needed for the transaction to move forward, clearing the way for Constellation to significantly expand its presence in the U.S. competitive power and energy services markets.
The settlement agreement enables Constellation to move closer to closing what has been one of the most closely watched energy transactions of the year. By combining two influential companies with extensive operating portfolios and customer bases, Constellation is positioning itself to play an even larger role in supporting the nation’s evolving energy infrastructure — particularly as demand continues accelerating due to electrification, industrial onshoring, and rapid growth in digital technologies such as artificial intelligence and data centers.
Joe Dominguez, president and CEO of Constellation, emphasized the importance of the development, expressing strong appreciation for the regulatory approval and confidence in the company’s long-term strategic direction:
“We are very pleased to reach a settlement that allows us to bring together two magnificent companies to create a new Constellation with unprecedented scale, talent and capability to better serve our customers and communities while building the foundation for America’s next great era of growth and innovation,” said Dominguez. “We thank the Department for its professionalism and tireless work reviewing this transaction through these many months. It’s now time for us to complete the transaction, welcome our new colleagues from Calpine, and together begin our journey to light the way to a brilliant tomorrow for all.”
Divestiture Requirements to Maintain Competition
As with many large energy sector mergers, regulators conducted an extensive review to ensure continued market competitiveness and protect ratepayers. Earlier this year, the Federal Energy Regulatory Commission (FERC) granted its approval with conditions requiring the sale of four Calpine power generation facilities in the Mid-Atlantic region:
- Hay Road
- Edge Moor
- Bethlehem
- York 1
These divestitures were aimed at preventing excessive concentration in key regional wholesale power markets.
The DOJ settlement now adds further asset sales, requiring Constellation to divest:
- York 2: An 828-megawatt natural gas-fired combined-cycle plant located in Pennsylvania
- Jack Fusco Energy Center: A 605-megawatt natural gas-fired combined-cycle facility outside Houston, Texas
- Minority ownership interest in the Gregory Power Plant: A 385-megawatt natural gas-fired combined-cycle plant near Corpus Christi, Texas
These actions collectively preserve competition in multiple geographic markets while allowing the transaction to proceed on schedule.
Market Shift Reinforces Strategic Value of Natural Gas
Since Constellation first announced plans to acquire Calpine in January, the U.S. energy market landscape has continued evolving rapidly. The growth of domestic manufacturing — encouraged by federal incentives and economic policy — alongside expanding demand for electricity-intensive technologies has made reliable natural gas generation more critical than ever to balancing the grid.
While Constellation is the nation’s leading producer of zero-carbon electricity through its large nuclear fleet, the company has also acknowledged that flexible natural gas-fired capacity remains indispensable, particularly as more renewable resources come online.
The company stated that the current market recognizes the strategic importance of these assets — and that the required divestitures are likely to command strong buyer interest. Constellation expects to receive attractive economic value for the power plants it is selling, which in turn strengthens the overall financial case for the acquisition.
The continued rise in energy demand — especially from data centers supporting cloud computing, advanced computing applications, and AI workloads — has intensified the need for dispatchable power sources that can operate around the clock when renewables are not generating. This shift aligns closely with Constellation’s strategy to expand managed generation resources capable of underpinning reliability, resilience, and grid stability across multiple regions.
All Regulatory Approvals Now Complete
Constellation’s latest announcement confirms that this DOJ resolution is the final approval required to close the transaction. The deal had previously received authorization from:
- The Federal Energy Regulatory Commission (FERC)
- The New York Public Service Commission
- The Public Utility Commission of Texas
These agencies reviewed both the competitive and public interest components of the acquisition, ultimately agreeing that the transaction can move forward provided the divestiture conditions are met.
Once a court signs off on the DOJ stipulation and order, Constellation and Calpine will be able to begin closing activities, formally bringing the combined organization to life.
A New Phase of Growth Begins
The integration of Calpine’s operations will expand Constellation’s generating capacity significantly, deepen its national footprint, and enhance its ability to offer comprehensive energy solutions to a broad range of customers — including commercial, industrial, and municipal clients.
Bringing together Constellation’s low-carbon generation expertise with Calpine’s flexible natural gas fleet allows the combined company to pursue a coordinated strategy focused on:
- Supporting decarbonization goals
- Enabling load growth across the economy
- Maintaining a reliable and resilient power grid
- Delivering value for customers and shareholders
As Dominguez noted, the leadership teams of both organizations are now preparing to move quickly into integration and execution:
“It’s now time for us to complete the transaction, welcome our new colleagues from Calpine, and together begin our journey to light the way to a brilliant tomorrow for all.”
The closing of this acquisition is expected to mark one of the most significant energy industry developments of the decade — setting the stage for a new era of advancement in U.S. power generation and infrastructure investment.
Source Link: https://www.businesswire.com/
