16 April 2010 — Constellation Energy agreed with Houston-based Navasota Holdings to buy two 550 MW natural gas combined-cycle generation facilities in Texas for $365 million, or $332 per kilowatt.

The  price is subject to closing adjustments. The transaction includes the Colorado Bend Energy Center, a 550 MW facility near Wharton, Texas, and Quail Run Energy Center, a 550 MW facility near Odessa, Texas.

The deal would add 1,100 MW of capacity to Constellation Energy’s generation portfolio and provides a physical presence of material scale in ERCOT (Electric Reliability Council of Texas), where the company’s wholesale and retail supply businesses sell power. The acquisition is in line with the company’s previously announced strategy of deploying up to $1 billion over the next 12 to 24 months to acquire assets in regions where the company’s load obligations exceed its generation capacity. Colorado Bend and Quail Run each have 275 MW expansion projects in advanced development, creating the long-term potential to further balance Constellation Energy’s generation capacity and customer supply obligations in ERCOT.

Navasota Energy Partners LP is a Houston-based energy development and asset management company that builds and manages power plants throughout the state of Texas.

Citi served as transaction adviser for Constellation Energy; Kirkland and Ellis LLP served as Constellation’s legal counsel. J.P. Morgan acted as Navasota Holdings’ financial adviser; Milbank, Tweed, Hadley & McCloy LLP acted as legal counsel to certain holders of Navasota Holdings.

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