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Constellation Executes Power Supply Agreement For Data Center To Co-locate At Texas Power Plant

Notes Upcoming Offering Of New 24/7 Carbon-Free Energy Matching Product

Discusses Business Metrics, Capital Allocation & Growth Plans At Analyst Day

January 11, 2022

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Copyright 2010-21
Reporting by Paul Ring •

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Constellation, which is set to be spun-off from Exelon on Feb. 1, today hosted an analyst day

Among its capital allocation strategy, Constellation listed, "organic and inorganic growth consistent with role as America's leading clean energy company."

Further discussing growth, Constellation among other things listed, "Grow sustainability products and services for our customers focused on clean energy, efficiency, storage and electrification; help our C&I customers develop and meet sustainability targets."

Other listed growth opportunities included:

• "Opportunistic carbon-free energy acquisitions, particularly nuclear plants with supportive policy"

• "Create new value from the existing fleet through repowering, co-location and other opportunities"

• "Produce clean hydrogen using our carbon-free fleet"

• "Engagement with the technology and innovation ecosystem through continued partnerships with national labs, universities, startups, and research institutions"

• "Explore advanced nuclear technology for investment and participation via advisory services to maintain our leadership position as stewards of a carbon-free energy future"

"With demand for clean energy accelerating, Constellation is exploring growth opportunities that build on its core businesses, including acquiring nuclear plants or other clean energy assets, creating clean hydrogen using its nuclear fleet, growing sustainability products and services for business customers, and leveraging the generation fleet for co-location of data centers and other opportunities. The company already has developed a clean hydrogen pilot project at its Nine Mile Point nuclear plant in upstate New York that could be a model for similar projects elsewhere in its fleet," Constellation said

Specifically, Constellation forecast 2022 - 2023 available cash as $4.6 - $5.0 billion. Of that, $0.1 billion is allocated to identified growth, with $1.8 to $2.2 billion marked for unidentified growth or return of capital. Constellation listed $1.8 - $2.2 billion allocated to debt reduction, with $0.4 billion allocated to dividends

Constellation in late December executed a five-year behind-the-meter power supply transaction with Compute North to co-locate Compute North's data center at one of Constellation's Texas power plants, the first such transaction for Constellation

Constellation also noted the upcoming offering of a new 24/7 carbon-free energy matching product.

Citing 2020 data, Constellation listed its power business as consisting of 215 TWh, combined wholesale (60 TWh) and retail (155 TWh). The natural gas business consists of 1.6 Tcf annually, wholesale and retail (just over half of the total is retail). Constellation listed renewable supply as 14 TWh/yr reflecting contracted or owned capacity used to serve customers

In terms of annualized retail customer power load under contract (citing 2021 data from a consultant), Constellation listed load at 152 TWh, with a C&I market share of 23% and residential market share of 11%

C&I makes up 90% of Constellation's retail power load

Constellation listed 2020 Retail Power Load Served by Region as follows (TWh):

Midwest                        38
Mid-Atlantic                   58
ERCOT                          12
New York                       16
New England, South, West       31

Constellation said that its customer-facing platforms serve 2 million residential, public sector and business customers, including three-fourths of Fortune 100 companies.

Discussing its generation fleet, Constellation said that, "Our generation supported by state programs will increase to 56% of total output by 2023."

Constellation initiated 2022 Adjusted EBITDA guidance of $2,350M - $2,750M

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