BALTIMORE, Sept 11 — Constellation (Nasdaq: CEG) today announced an agreement to acquire 100% of RISEC Holdings, LLC (RISEC), owner of the Rhode Island State Energy Center, from Shell Energy North America, (US), L.P. (SENA) a subsidiary of Shell plc (Shell) for $715 million, subject to customary purchase price adjustments.
Located in Johnston, R.I., the Rhode Island State Energy Center is a combined-cycle electric generation facility, fueled by natural gas. The facility has two combustion turbines and one steam turbine and is capable of generating up to 609 megawatts of electricity. The facility sells electricity and capacity into the competitive ISO New England wholesale power market and is expected to become part of Constellation’s merchant generation portfolio.
“The Rhode Island State Energy Center is a high-performing asset that perfectly complements Constellation’s extraordinarily successful customer business in New England,” said Joe Dominguez, chairman, president and chief executive officer, Constellation. “As Constellation’s business in New England grows, we need a reliable asset that is well-positioned on both the electric grid and the natural gas pipeline system. RISEC checks all of these boxes and will be immediately accretive to Constellation’s business plan. We look forward to closing the transaction and to begin working with the fantastic team at RISEC to build on the plant’s strong operating record as we power families and businesses across New England.”
RISEC has served the New England power grid since 2002. Its combined-cycle technology captures and reuses heat from the plant’s gas turbines to generate additional electricity, allowing it to operate more efficiently and with lower emissions than a traditional single-cycle natural gas plant.
The $715 million purchase price is equivalent to approximately $580 million net of expected first year tax benefits. The transaction is expected to be immediately accretive to Constellation’s operating earnings, deliver returns above the company’s 10% unlevered return threshold, and will not impact its ability to execute $5 billion of authorized share repurchases by the end of 2027.
The transaction is expected to close following receipt of customary regulatory approvals and satisfaction of other closing conditions. Until closing, RISEC will continue to operate under its current ownership.