Exelon Corporation‘s (EXC) newly-acquired unit Constellation Energy has entered into a General Services Administration (“GSA”) renewal contract for the supply of 90,000 million megawatt hours (“MWh”) electricity to 17 federal buildings in California for one year.
As a result of this contract, Exelon’s Constellation federal electricity support division will continue to supply 2.7 million MWh of electricity per year. This division also supplies electricity to several important U.S. government-owned buildings like the Federal Reserve, U.S. Capitol and others.
On paper, this merger is accretive in nature and is reflected in Constellation Energy securing the contract within a fortnight of the completion of the deal. We expect this to be a positive indicator for Exelon’s future growth.
The merger will also enable Exelon to jointly work on fuel innovation, increase efficiency and provide better options and rates to customers. The merged entity is expected to supply approximately 164 terawatt-hours per year to as many as 100,000 businesses and public sector companies and about 1 million residential customers.
Overall, Exelon is well poised to become the nation’s leading competitive energy products and services provider in terms of load and customer base and also the biggest competitive power generator. The consolidated entity will also produce power at lower costs.
Exelon Corporation currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.
Headquartered in Chicago, Illinois, Exelon Corporation is one of the nation’s largest electric utilities with approximately $19 billion in annual revenues. The company has one of the industry’s largest portfolios of electricity generation, a nationwide reach and enjoys a strong position in the Midwest and Mid-Atlantic markets. The company competes with Pike Electric Corporation (PIKE).
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