Constellation is set to acquire RISEC Holdings, LLC, which owns the Rhode Island State Energy Center, from Shell Energy North America for $715 million. This acquisition will enhance Constellation’s power generation capabilities in the ISO New England market, as RISEC is a 609-megawatt natural gas-fired facility located in Johnston, Rhode Island.
The purchase price, after accounting for expected tax benefits, reduces to around $580 million, making the effective cost per megawatt approximately $952,000. The acquisition is expected to provide immediate benefits to Constellation’s earnings while not interfering with its plans for $5 billion in share repurchases through 2027.
RISEC has been operational since 2002 and operates efficiently in the competitive New England power market. Its combined-cycle design allows it to generate more power from the same fuel input compared to traditional plants, thereby reducing emissions and enhancing efficiency. This facility will allow Constellation to bolster its capacity for reliable electricity supply in a region facing unique energy demand challenges.
The deal is expected to offer multiple revenue streams through energy sales and capacity payments, further solidifying Constellation’s position in the market. The existing operating history of RISEC also mitigates the risks associated with new plant development.
Overall, this acquisition aligns with Constellation’s strategy to enhance its generation portfolio while maintaining shareholder returns and supporting grid reliability amid increasing electricity demands.
