Constellation Energy won final federal clearance to buy Calpine for $16.4 billion (C$22.1 billion). The United States Department of Justice said it would settle its antitrust case if the parties sell several power plants in key markets. The resolution removes the last major hurdle to closing. Constellation has said the combination will expand its national footprint and customer reach.
Under the proposed consent decree, the Justice Department requires divestitures across Pennsylvania, Delaware, and Texas to preserve competition in PJM and ERCOT. The government also said the merger, without remedies, would have created the largest wholesale power generator in the United States and raised the risk of higher prices.
“Americans deserve the benefit of robust competition among electricity generators,” said Assistant Attorney General Abigail Slater, in announcing the settlement.
The agreement will undergo a Tunney Act review before final judgment by a federal court. The timing for closing was not disclosed, but the settlement paves the way.
Divestitures reshape PJM and ERCOT markets
The package calls for selling interests in six facilities, including the Jack A. Fusco Energy Center near Houston and the Gregory Power Plant near Corpus Christi, plus plants in Wilmington and the York area. Regulators targeted assets where market power could increase after the deal.
The Justice Department said relief is focused on locations serving ERCOT in Texas and PJM in the mid‑Atlantic. The aim is to prevent supply withholding and pricing power that could harm customers. The divestitures will be shopped to approved buyers.
Other approvals arrived earlier in 2025. The Federal Energy Regulatory Commission cleared the combination on July 24, 2025, after its own review of competitive impacts in organized markets. FERC’s decision followed state approvals that included New York and Texas. These steps, together with the Justice Department settlement, complete the regulatory pathway. Attention now shifts to execution and integration.
Focus shifts to integration and demand
Constellation plans to pair its nuclear fleet with Calpine’s gas and geothermal plants to serve rising load. Large data centres, electrified transport, and new industrial projects are driving multi‑year demand growth. The combined platform will operate across major U.S. markets with a mix of baseload and flexible capacity. That scale could sharpen procurement for fuel, outages, and grid services. Integration will be watched for cost control and delivery risk.
Management signalled confidence in the outcome. “We are very pleased to reach a settlement that allows us to bring together two magnificent companies,” said Joe Dominguez, Constellation’s chief executive.
The buyer first announced the transaction in January, presenting a plan to join nuclear, gas, and geothermal assets under one roof. The strategy relies on meeting around‑the‑clock needs for commercial and community customers. Execution now depends on closing, completing divestitures, and delivering promised reliability gains.