A power plant sale required by federal antitrust regulators is moving a 606-megawatt gas facility outside Houston into new hands. That kind of mandated asset sale is called a divestiture: a company sells a piece of itself as the price of completing a larger acquisition. LS Power, a New York-based energy investor and operator, agreed to buy the Brazos Valley Energy Center from Constellation, with the transaction expected to close in the fourth quarter of this year, pending regulatory approval.
The antitrust backstory
The sale traces back to Constellation's acquisition of Calpine. The U.S. Justice Department's Antitrust Division, together with the Texas attorney general, announced on December 5 of last year that completing the deal would require Constellation to sell six power plants across Delaware, Pennsylvania, and Texas. The Antitrust Division had filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia to block the transaction outright. A proposed settlement, filed alongside the lawsuit, offered a path forward: sell the specified plants, and the government would withdraw its objections.
What the plant is and why Texas matters
The Brazos Valley Energy Center, formerly called the Jack Fusco Energy Center, is a combined-cycle facility. Combined-cycle means the plant runs a gas turbine and then captures the exhaust heat to drive a steam turbine, producing more electricity per unit of fuel than a simpler single-turbine design. The plant sits near Houston in territory managed by the Electric Reliability Council of Texas, known as ERCOT, the grid operator covering most of the state. LS Power CEO Paul Segal said Texas's economic growth is pushing electricity demand higher while new generation projects take years to bring online, making the acquisition of proven, operating assets one of the fastest ways to close that gap.
LS Power's expanding footprint
This is the second large Constellation deal LS Power has reached this year. In March, the company agreed to acquire a 4,353-megawatt portfolio of five gas-fired assets in the PJM interconnection, the grid serving much of the mid-Atlantic and Midwest, also from Constellation. Once both transactions close, LS Power's U.S. operating fleet will total roughly 14.1 gigawatts.
Founded in 1990, the company has developed or acquired 50,000 megawatts of power generation since inception across solar, wind, hydro, battery storage, and natural gas. Its transmission arm, LS Power Grid, operates seven transmission utilities and has built more than 780 miles of high-voltage lines, with another 400-plus miles in construction or development.