Constellation Energy Bidding $1.1 Billion to Buy Boston Generating Plants

Constellation Energy Group (CEG) on Monday said it has offered approximately $1.1 billion, or roughly $372/kW, to acquire Boston Generating's 2,950-megawatt fleet, the third largest power-generating portfolio in the New England region, in an upcoming bankruptcy auction.

Struggling Boston Generating is expected to file for bankruptcy in the next few months. If approved, Constellation Energy's bid would then be considered the price to beat in an asset auction to be held later this year, the company said.

The offer includes Boston Generating's five power plants located in the Boston area: four natural gas fired plants and a fuel oil plant.

"This agreement is consistent with Constellation Energy's previously stated intention to purchase physical generation assets in regions where we have significant load obligations," said Mayo Shattuck, chairman, president and CEO of Constellation Energy. "These assets would expand our physical generation fleet with a portion of the total output further improving our net load to generation ratio to approximately 55 percent."

Constellation Energy said the deal would add to its earnings beginning in 2011 based on the current bid price. Constellation Energy plans to finance this transaction through a mix of available cash on hand and debt.