Constellation Energy Group Inc. said yesterday that it has bought a dozen utility contracts from a Michigan energy company as it continues a strategy of acquiring assets from energy rivals weakened since the collapse of Enron Corp.
The deal with CMS Energy Corp. of Dearborn, Mich., includes contracts with municipal, industrial and co-op utility customers in Ohio, Illinois, Michigan and Virginia, officials from both companies said.
The price of the transaction will not be disclosed until the deal closes in the second quarter, Constellation officials said.
Constellation, which also owns Baltimore Gas and Electric Co., said the acquisition helps it move farther into the Midwest, where last year it built new power plants.
"We have been expanding our business in the Midwest so it fits very well with that," said Constellation spokesman Charles Welsh.
The contracts are part of CMS Marketing Services and Trading, a wholly owned subsidiary of CMS Energy. The company is moving the subsidiary from Houston to Michigan.
"It's part of our strategy to get back to basics, which is to primarily return to our Michigan roots as a Michigan-based electric and gas utility," said CMS spokesman Dan Bishop. "It's also a part of our ongoing effort to improve our liquidity."
The company sold $3.6 billion in assets last year as a way to cut costs, Bishop said.
Constellation has taken advantage of struggling companies such as CMS that are now trying to raise money to survive. It has purchased assets from several energy rivals that lost money since Enron declared bankruptcy in 2001.
Last month, Constellation bought the electricity division of Dynegy Canada Inc., a subsidiary of Dynegy Inc. of Houston, for an undisclosed price. That month it also paid $22.3 million for two natural gas and electricity consulting businesses from its Hagerstown competitor, Allegheny Energy Inc.
In September, it bought the electricity-retailing unit of AES Corp. in Virginia for $260 million.
"These contracts are becoming available as companies are deciding to exit the competitive supply business and that is an area of interest to Constellation," said Welsh. "We think we're good at these structured load-serving contracts and have been looking at the right opportunity to expand that business."
Under structured load-serving contracts, companies such as Constellation agree to provide power as customers use it rather than contract for a fixed amount, Welsh said.
Constellation stock closed yesterday at $25.95, up 16 cents, on the New York Stock Exchange.