Constellation acquires Virginia energy provider

$260 million in cash for AES NewEnergy

September 10, 2002|By Dan Thanh Dang | Dan Thanh Dang,SUN STAFF

Constellation Energy Group Inc. said yesterday that it has completed a deal to buy a Virginia-based commercial and industrial energy-services company for $260 million cash that will add about 3,000 large electricity customers to its client list.

Under the terms of the agreement, Constellation acquired 100 percent ownership - including $120 million of working capital - of AES NewEnergy, a subsidiary of AES Corp. in Arlington, Va. The company, renamed Constellation NewEnergy, will keep its 260 employees who are based in eight cities across the country.

The acquisition is Constellation's first since it scratched plans to split into two independent companies last October.

A leading national provider of electricity, natural gas and energy services in deregulated markets across the country, NewEnergy has sold power to large industrial and commercial customers such as Verizon, DaimlerChrysler, Amtrak and Sears.

"We are excited to have NewEnergy as the newest member of Constellation," Constellation Chairman and Chief Executive Officer Mayo A. Shattuck III said in a prepared statement. "The company is a good strategic fit and complements our merchant energy strategy. It would be very difficult to find another national competitive supply company that is as experienced, well-run and compatible in terms of our business strategy, practices and corporate values.

"The purchase significantly extends Constellation's scope and reach along the value chain by adding the leading business in the competitive energy-supply sector - a company that brings with it a portfolio of high-quality customers," Shattuck added.

According to Constellation officials, NewEnergy sells about 4,000 megawatts of electricity to its current customer list. By comparison, Baltimore Gas and Electric Co. delivered about 6,600 megawatts of power to Maryland customers at the peak time of demand during this summer's heat wave. That's enough electricity to power about 6.6 million households.

Constellation NewEnergy will provide its customers the same level of service they have had, with the added strength and stability of Constellation's national reach and platform," said Clem Palevich, president of Constellation NewEnergy.

"Over the last six years, NewEnergy has developed extensive experience in the competitive energy industry and in partnering with our customers. As part of Constellation, we will continue to serve our customers with the highest degree of integrity, honesty, and value."

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