Justice Department Requires Divestitures to Proceed with Constellation’s Proposed $26.6 Billion Acquisition of Calpine

Note: View proposed settlement here.

The Justice Department's Antitrust Division, together with the Attorney General of Texas, announced today that it will require divestiture of six power plants in Delaware, Pennsylvania, and Texas to resolve antitrust concerns arising from Constellation Energy Corporation, Inc.'s $26.6 billion acquisition of Calpine Corporation.

The Antitrust Division filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia to block the proposed acquisition. At the same time, the Division filed a proposed settlement that, if approved by the court, would resolve the Division's competitive concerns.

"The price of electricity is a pocketbook issue to American consumers working hard to afford their monthly utility bills. When it comes to their electricity bills, Americans deserve the benefit of robust competition among electricity generators," said Assistant Attorney General Abigail Slater of the Justice Department's Antitrust Division. "This settlement includes a six-plant divestiture to an acquisition that risked harming tens of millions of electricity consumers in the mid-Atlantic and Texas. I am appreciative of the partnership with our co-plaintiff, the State of Texas, to secure relief for consumers."

As detailed in the complaint, the acquisition would create the largest wholesale power generator in the United States and increase the likelihood that the combined firm would profitably withhold electricity from one or more of its plants. The result would be higher electricity prices for customers in Texas, where the electricity grid is operated by the Electric Reliability Council of Texas (ERCOT), and in New Jersey, Delaware, southeastern Pennsylvania, and the eastern shores of Maryland and Virginia, where the electricity grid is operated by PJM Interconnection LLC (PJM).

The divestitures resolve the Division's concerns that the acquisition would harm competition and lead to higher prices on consumers reliant on the ERCOT and PJM electricity grids. Specifically, the settlement requires the companies to divest their ownership interests in four electricity plants serving PJM and two electricity plants serving ERCOT. The divested plants are:

• Bethlehem Energy Center, a natural gas combined cycle plant, located in Bethlehem, Pennsylvania;
• York Energy Center (York 1 and York 2), a dual-fuel combined cycle plant, located southeast of the city of York, Pennsylvania;
• Hay Road Energy Center, a dual-fuel combined cycle plant, located in Wilmington, Delaware;
• Edge Moor Energy Center, a simple cycle natural gas plant, located in Wilmington, Delaware;
• Jack A. Fusco Energy Center, a natural gas combined cycle plant, located southwest of Houston, Texas; and
• Gregory Power Plant, a natural gas combined cycle plant, located northeast of Corpus Christi, Texas.

This is the first settlement consent decree that the Division has filed in an electricity merger in 14 years.

Constellation is a publicly traded Pennsylvania corporation headquartered in Baltimore, Maryland. It is one of the largest owners of electric generation assets in the United States. In 2024, the company earned $23.6 billion in revenue. It currently controls more than 20,000 megawatts of generating capacity in PJM and approximately 5,000 megawatts in ERCOT.

Calpine is a privately held Delaware corporation headquartered in Houston, Texas. Calpine is the largest generator of electricity from natural gas and geothermal in the United States. The company controls approximately 9,000 megawatts of generating capacity in ERCOT and 5,000 megawatts in PJM.

As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person should submit written comments concerning the proposed settlement within 60 days following the publication to Patricia Corcoran, Acting Chief, Transportation, Energy & Agriculture Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street NW, Suite 8000, Washington, DC 20530. At the conclusion of the public comment period, the court may enter the final judgment upon finding it is in the public interest.