Constellation Energy (NYSE: CEG) today announced it has signed an agreement to acquire CPower, a leading energy management and demand response provider managing approximately 850 megawatts of demand response capacity that can be dispatched in energy markets throughout North America. The transaction would expand Constellation Energy's total demand response capacity to 1,500 megawatts, and both strengthen and complement the company's position as a leader in competitive electricity and natural gas supply. Terms were not disclosed.
Privately held CPower (www.cpowered.com), headquartered in New York, N.Y., designs and manages programs that allow its commercial, utility and public sector customers to reduce electricity demand during peak demand periods. The company is authorized to manage and aggregate demand response capacity programs in New York, New England, the Mid-Atlantic states (PJM), California, Texas and Ontario, Canada.
"We believe customer demand and technological innovation will drive strong growth in the demand response market in the years ahead," said Kathleen Hyle, senior vice president, Constellation Energy, and chief operating officer of the company's commercial division. "The acquisition of CPower, one of the largest, most innovative and most respected players in the demand-management field today, will greatly expand our customer base, sales presence and business partner community in key markets such as Texas, New England and the PJM Interconnection regional transmission organization, where Constellation Energy is an energy supply leader.
"The addition of CPower to our team will strengthen cross-selling opportunities and operational capabilities, and will enhance demand-management product development," Hyle said. "The expanded sales and marketing presence and diverse demand response expertise will accelerate deployment and commercialization of our recently introduced online energy management product, VirtuWatt, which is redefining the way power-intensive businesses reduce demand and lower energy bills."
"As electricity load management and demand response become ubiquitous offerings, users of energy are seeking a business partner that can provide the maximum value - for management of both the purchasing and the use of electricity," said Gary Fromer, chief executive officer, CPower. "As a critical, integrated component of Constellation Energy, we will be able to provide unparalleled value to our customers and business partners immediately, and will be in a spectacular position to innovate, with new VirtuWatt-based value offerings that have been unavailable in the demand response markets heretofore."
The agreement is subject to customary closing terms and conditions. Closing is expected in the fourth quarter of 2010.