Constellation Energy Group (CEG 3.81%) saw a decent bump in its stock price on Tuesday following news that a company it will soon own has received funding for a new power plant. Constellation's shares closed the day more than 2% higher, a rate high enough to beat the S&P 500 index's 0.3% rise.
Peak progress
Constellation's asset-to-be is privately held utility Calpine, which announced Tuesday afternoon it had secured a loan agreement with the Texas Energy Fund for the facility. Specifically, Calpine plans to construct a 460-megawatt peaking facility -- an electric power plant that runs only at times of peak demand -- adjacent to its Freestone Energy Center in the state.
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The Texas Energy Fund is a state initiative aimed at supporting the development of power resources like Calpine's planned facility. The company did not provide any financial details on the loan agreement in its press release on the matter.
The peaking facility is already under construction, and Calpine said it should be operational in 2026.
A $16 billion-plus deal
Constellation reached a deal to acquire Calpine back in January. The purchase is still awaiting approval from the relevant regulatory bodies, and is expected to close at some point this quarter. All told, Constellation is paying roughly $16.4 billion for the company in a cash-and-stock deal that includes assuming around $12.7 billion of Calpine's debt.
