Constellation Nuclear Sale to EDF Approved

The New York State Public Service Commission (PSC) on Tuesday approved the $4.5 billion acquisition of nearly half of Constellation Nuclear, the indirect owner of three nuclear power plants in upstate New York, to a wholly owned subsidiary of Électricité de France S.A. (EDF), the world’s largest nuclear power plant owner.

EDF, through the subsidiary, is acquiring a 49.99% ownership interest in Constellation Nuclear. EDF, owned primarily by the French government, is the leading electric utility in France. With the New York power plant acquisitions, EDF’s subsidiary will own the 621-MW Nine Mile Point Nuclear Unit 1 and the 1,135-MW Nine Mile Point Nuclear Unit 2 in Oswego, and the 582-MW R.E. Ginna Nuclear Power Plant in Ontario, Wayne County.

The PSC found that no potential for harm exists in this transaction in regards to the commission’s Wallkill presumption, under which transactions involving parent entities upstream from the entities owning wholesale electric generation facilities located in New York must be reviewed if there is the potential for the exercise of market power or other harm to the interests of captive New York ratepayers.

Because EDF is a new entrant into New York generation markets, and is acquiring only interests already held by Constellation Nuclear, market concentration in New York wholesale generation markets will not increase as a result of the transaction. Furthermore, the transaction does not pose the potential for the exercise of vertical market power or other impacts adverse to the interests of captive ratepayers. Neither EDF nor Constellation Nuclear exercises control over electric delivery facilities. As a result, those avenues to the undue exercise of vertical market power are also foreclosed.

The acquisition is expected to bolster the financial stability of the ownership structure for the New York nuclear facilities. EDF is an investment grade rated entity with bond ratings of “Aa3” from Moody’s Investor Services and “A+” from Standard and Poor’s. Parent company Constellation Energy Group, based in Maryland, will retain a majority interest in Constellation Nuclear, which will remain the indirect owner of the Nine Mile and Ginna nuclear facilities. The acquisition also will not affect funds currently invested for radiological and nonradiological decommissioning purposes.

Source: New York State Public Service Commission