Constellation Energy Group Inc. (CEG) completed the acquisition of Criterion Wind Project in Western Maryland. The company acquired the wind project located in Garrett County, Maryland from Clipper Windpower Inc.
The 70-megawatt project will be developed, constructed, owned and operated by Constellation Energy. It is estimated that up to 125 new jobs will be created during peak construction. Commercial operation of the wind energy facility is anticipated by year-end fiscal 2010.
Constellation Energy’s newly acquired project has a 20-year power purchase agreement with the Old Dominion Electric Cooperative for energy and renewable energy credits produced by the wind facility. Old Dominion is a not-for-profit wholesale power provider serving public electric cooperatives in Maryland, Delaware and Virginia.
Constellation Energy’s growing clean energy portfolio includes approximately 1,000 megawatts of renewable power generation owned or contracted from sources including utility-scale solar, hydro, geothermal and biomass. Approximately 25 megawatts of solar installations owned and operated by Constellation Energy have been completed or are under development for customers ranging from universities to state government agencies, as well as retail and industrial businesses.
Constellation Energy is a leading supplier of energy products and services to wholesale and retail electric and natural gas customers. It owns a diverse fleet of generating units located in the United States and Canada, totaling approximately 7,100 megawatts of generating capacity, and is among the leaders pursuing the development of new nuclear plants in the United States. The company delivers electricity and natural gas through the Baltimore Gas and Electric Company, its regulated utility in Central Maryland.
Constellation Energy remains diversified among owned generation, contractual generation, regulated distribution and competitive supply. Its diverse fleet of power generating units located across four U.S. states and Canada is a mix of coal, oil, natural gas and renewable sources (including geothermal, solar, hydro-electric and biomass).
Diversified generation assets help the company to minimize the impact of volatile commodity prices on its costs.
However, we believe that the above positives are already reflected in the current valuation, leaving little room for above market gain.
Also in the near-term, the fortunes of the company appear a little bleak due to a tepid economy, lower demand for electricity, over-exposure in the merchant power space and low-dividend yield compared to its peers. Thus we maintain our near-term Neutral recommendation on the Zacks #3 Rank stock.
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