LS Power to acquire Brazos Valley Energy Center from Constellation for $860m
A definitive $860 million agreement delivers Constellation's 606MW Brazos Valley Energy Center to LS Power, closing out the final required asset sale tied to Constellation's Calpine acquisition. The deal is gated on US…
Key takeaways
- LS Power has agreed to acquire Constellation's 606MW Brazos Valley Energy Center for $860 million.
- The deal completes the final required asset sale tied to Constellation's acquisition of Calpine.
- The transaction requires US Department of Justice approval and is targeted to close by year-end 2026.
- Once this and other pending deals close, LS Power's national operating fleet is expected to reach about 14.1GW.
- The Brazos Valley plant is a natural gas-fired combined-cycle facility near Houston operating in the ERCOT market.
A definitive $860 million agreement delivers Constellation's 606MW Brazos Valley Energy Center to LS Power, closing out the final required asset sale tied to Constellation's Calpine acquisition. The deal is gated on US Department of Justice approval and other customary conditions, with both sides targeting completion before the end of the year.
The regulatory backstory
The Brazos Valley plant is a natural gas-fired combined-cycle facility near Houston, operating within the Electric Reliability Council of Texas power market. Previously named the Jack Fusco Energy Center, it satisfies the last outstanding regulatory commitment Constellation agreed to when it acquired Calpine. This is the second major asset exchange between the two companies under that arrangement: in March, LS Power agreed to take a 4.35GW portfolio of five gas-fired generation assets in the PJM interconnection, also from Constellation.
Fleet math and the Texas thesis
Once this acquisition and other pending transactions are wrapped, LS Power's national operating fleet is expected to reach approximately 14.1GW. CEO Paul Segal built the investment case around Texas demand: economic growth continues to attract companies and investment to the state while new generation projects take years to develop, making existing operating capacity the faster, more cost-effective answer. Natural gas, in his framing, provides the around-the-clock reliability ERCOT requires.
White & Case and Willkie Farr & Gallagher served as legal counsel to LS Power on the deal. Houlihan Lokey and RBC Capital Markets provided financial advice.
Constellation's second-quarter print
Constellation reported Q2 2026 results alongside the news. GAAP net income fell to $1.42 per share from $2.67 per share a year earlier. Adjusted operating earnings moved the other way, rising to $2.55 per share from $1.91 per share. The company also added 920MW of long-term nuclear power purchase agreements with investment-grade customers, with contract start dates between 2029 and 2032. A 176MW agreement with Walmart supports expansion at the Dresden Clean Energy Center in Illinois.
What to watch
DOJ clearance is the next definitive milestone for the Brazos Valley transaction. Both companies have set a year-end 2026 target for closing.
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Filed via finance.yahoo.com