Constellation sells 4.4 GW of PJM gas to LS Power for $5 billion, the toll for keeping Calpine

Five plants, one bill for Calpine

Bethlehem, York 1, York 2, Hay Road and Edge Moor: five gas plants in Delaware and Pennsylvania totaling roughly 4.4 gigawatts are passing from Constellation Energy to private buyer LS Power for $5 billion before closing adjustments ¹. That is the itemized price of the $26.6 billion Calpine takeover, which closed on 7 January and made Constellation the world's largest private-sector power producer ¹⁵. LS Power's own news page↗ dates the agreement to 18 March, and the sale has drawn a single trade write-up, on 28 September↗ ¹².

A forced sale into America's tightest market

The Justice Department outlined the divestitures in December 2025, after FERC demanded PJM sell-offs in July 2025 ¹. So the seller is compelled, and the region is the one where what it sells is scarcest. PJM's latest capacity auction↗ cleared at its $325-per-megawatt-day price cap, fell about 6,800 MW short of its reserve target for a second straight year, and would have cleared at $554.72 uncapped ⁴. "PJM is at the epicenter of the surge in electricity demand," LS Power chief Paul Segal said ¹.

What a PJM megawatt pays now

$5 billion across 4.4 gigawatts works out to about $1.14 million per megawatt. At the capped clearing price, capacity payments alone are worth $118,625 per megawatt each year ⁴, roughly a tenth of the purchase price back annually before the fleet burns a molecule of gas. At the uncapped price, the arithmetic points to about $202,500.

A sixth plant, 606 MW outside Houston, was agreed in August at $860 million↗, some $1.42 million per megawatt, taking LS Power's fleet to about 14,100 MW once it closes ³². New supply, meanwhile, keeps failing to arrive:

What Constellation keeps

The machine the deal was fought over stays: 22,069 MW of nuclear, an 835 MW Microsoft restart contract carrying $1.0 billion of federal support, Walmart signed at Dresden↗ ⁵. Calpine lifted quarterly revenue 64% to $11.1 billion in the first quarter ⁶, most output is contracted through 2050 and beyond, and management raised full-year guidance to $11.50 to $12.50 a share ³.

The trade only holds if scarcity does

What proves the bears right is a soft PJM capacity auction or Georgia regulators shaving the uprate tariff's economics ⁵. And no open-market sale exists to prove $5 billion is cheap; it is a regulator's price on a regulator's clock. The seller of record is Constellation, but the ones paying are its shareholders, giving up scarce PJM gas at a price antitrust lawyers arranged.

Year-end closings, then December's auction

One requirement is left: that 606 MW Houston plant, whose $860 million sale is expected to close by the end of this year ³¹. The 385 MW Gregory minority stake near Corpus Christi was divested earlier this year ¹, and chief executive Joe Dominguez expects the rest done "later this year" ¹. PJM's next auction lands in December, the first read on whether $325 still clears ⁴.