US power company Constellation is acquiring NRG Energy’s 44% ownership stake in the South Texas Project Electric Generating Station (STPEGS). The 2,645 MWe two-unit plant is located about 90 miles southwest of Houston. The transaction is valued at $1.75bn, with an effective purchase price of $1.4bn after taking into account tax benefits to Constellation. The transaction will be financed with a combination of cash and debt. The South Texas Project is one of the newest and largest NPPs in the USA with a good track record for safety and reliability.
The STPEGS reactors are operated by the STP Nuclear Operating Company (STPNOC). Ownership is currently divided among NRG Energy (44%), San Antonio municipal utility CPS Energy (40%) and Austin Energy at (16%). The plant comprises two Westinghouse pressurised water reactors, which began operation in 1988 and 1989. The plant is cooled by a 2,800 ha reservoir, which eliminates the need for cooling towers. Plans to construct tow more units at the site have been dropped.
Joe Dominguez, President & CEO of Constellation said the South Texas Project is “an exceptionally well-maintained plant” and “ among the most valuable power sources in the world”. He added: “With the potential to run for at least 46 more years with the right policy support, we look forward to working with the South Texas Project’s other owners to continue bringing clean, reliable electricity to this growing region for decades to come.”
Following the transaction, Constellation will be one of three owners with oversight of STPNOC. “Today’s announcement is the continuation of our strategy to optimise our portfolio while creating significant shareholder value,” said Mauricio Gutierrez, NRG President & CEO. The transaction is targeted to close by the end of 2023, subject to regulatory approvals by the US Nuclear Regulatory Commission, Hart-Scott-Rodino, and the Public Utility Commission of Texas.
Constellation owns interests in 13 generating stations with 23 nuclear units capable of producing approximately 21,000 MWe. It already has a strong and growing presence in Texas as an employer, taxpayer and significant provider of electricity and other services. Constellation also is a supplier in Texas’s competitive retail energy market, supplying electricity, natural gas, energy efficiency and other services to approximately 200,000 residential and commercial customers state-wide.
Image: The South Texas Project Electric Generating Station (courtesy of NRG)