LS Power's $6 billion fund buys the gas plants Constellation had to sell
LS Power closed Fund VI at about $6 billion, with $1.7 billion of equity earmarked for roughly 5 GW of Constellation gas at $1,142 a kilowatt. Constellation is a forced seller, and the price says what scarce megawatts now cost a levered buyer.
Vincent Jiang · 2 min read
LS Power, the privately held New York power investor, closed its sixth private equity fund at about $6 billion on October 6, past a $4 billion target and more than double the $2.7 billion its previous fund raised in 2024 1. About $1.7 billion was spoken for before the close: LS Power is buying about 5 GW of gas-fired plants from Constellation Energy+4.78% — Constellation Energy, up 4.78 percent as of its last quote, the world's largest private-sector power producer, whose fleet runs 55 GW 12. The first piece closed on October 14, the 606 MW Brazos Valley Energy Center outside Houston 2.
Fund VI closed half again past its $4 billion target and more than double Fund V
Data
| Fund size at close | |
|---|---|
| Fund V close (2024) | $2.7B |
| Fund VI target | $4B |
| Fund VI close (2026) | $6B |
Constellation is a forced seller at a marked-up price
Constellation is not choosing to exit gas. It is selling because the Justice Department conditioned its Calpine acquisition, closed on January 7, on divestitures 2. On March 18, LS Power agreed to take about 4.4 GW of mostly gas-fired plants in Delaware and Pennsylvania for $5 billion before adjustments, about $1,142 per kilowatt 4.
That is steep for used metal, and still roughly a third of new build: chief operating officer Darpan Kapadia puts a 1 GW combined-cycle plant at north of $3 billion to construct, about double six years ago 7. The fund's $1.7 billion of equity covers about a third of the $5 billion PJM price, which points to debt funding the rest 2. The remaining plants, Bethlehem, York 1, York 2, Hay Road and Edge Moor, close by year-end 2.
Constellation keeps what hyperscalers want. Google signed 3,590 MW across two PJM contracts on October 6, including 890 MW of nuclear uprates at 11 reactors backed by more than $4.3 billion of Constellation investment 5. Amazon took 190 MW at Calvert Cliffs on September 30 6.
Constellation is sending more gas megawatts to one fund than Google contracted in total
Data
| Value | |
|---|---|
| LS Power gas purchase | 5,000 MW |
| Google fleet deal (15-yr) | 2,700 MW |
| Google nuclear uprates (20-yr) | 890 MW |
| Amazon Calvert Cliffs (20-yr) | 190 MW |
The buyer is also building the way out
LS Power has traded this cycle before: it built about 5 GW of gas plants and sold them to Cogentrix and NRG+2.72% — NRG, up 2.72 percent as of its last quote by 2001, then rebuilt out of the early-2000s bankruptcies, raising $19.8 billion of equity since 71. Its next act is supply. On October 8, PJM cleared 2.1 GW on a fast track, including a 455 MW uprate at LS Power's Hunterstown plant in Pennsylvania, online by mid-2029; the track lapses at the end of 2027 8.
"The demand growth we're experiencing today is real," Kapadia said. "The supply side is going to take time to catch up, and the markets are screaming that" 3. Constellation reports on November 6, with adjusted operating EPS guidance of $11.50 to $12.50 after a $2.55 second quarter 6. LS Power is underwriting a shortage its own construction schedule is supposed to end.
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