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Constellation Reports Earnings, Retail Metrics

February 27, 2024

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Copyright 2010-23
Reporting by Paul Ring •

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Constellation reported that Adjusted EBITDA (non-GAAP) for the fourth quarter of 2023 increased to $1,137 million from $605 million in the fourth quarter of 2022.

Constellation said that favorable market and portfolio conditions (responsible for a $775 million year-over-year increase in Q4) were partially offset by unfavorable labor, contracting, and materials, decreased ZEC revenues, decreased capacity revenues, and unfavorable impacts of nuclear outages

For the full year 2023, Adjusted EBITDA (non-GAAP) increased to $4,025 million from $2,667 million in 2022.

In providing information for investors to model 2024-25, Constellation said that, thus far, retail power margins in 2024-2025 are $0.50 -$1.75/MWh above the 13-year average. The 13-Year average represents eight years of historical realized margins and five years of forward-looking forecast

In providing modeling information to investors, Constellation listed 13-year historical and forecasted average margins as $3.50 - $3.60 / MWh and $0.25 - $0.30 / dth

Constellation said 2024-25 margins above the 13-year historical and forecast average resulted from: volatile markets leading to risk premiums and favorable conditions in wholesale load auctions

Constellation said that, at 21%, it has the largest C&I market share of any retail supplier.

Constellation said that its customer-facing business serves three fourths of Fortune 100 companies

Discussing sales channels, in a 10-K Constellation said, "we have remained the market leader in direct [non-third party/broker] C&I sales with over 33% of the C&I market share of direct customer business driven by our highly experienced and long-tenor direct sales team."

Constellation provided total load served by, and C&I market share of, the largest retail suppliers as follows (Numbers reflect annualized non-residential customer load under contract as of December 2022):

Retail Electric Load Served 
  (million MWhs)
NRG                           151
Constellation                 146
Vistra Energy*                112
bp                             65
ENGIE                          56
Calpine Energy Solutions       51
Gexa Energy                    29
Shell Energy North America     29
AEP Energy                     22
Just Energy                    18

* Adjusted to include Energy Harbor

C&I Market Share

Constellation                 21%
NRG Energy                    16%
Vistra Energy*                10%
bp                            10%
ENGIE                          9%
Calpine Energy Solutions       8%
Gexa Energy                    4%
Shell Energy North America     4%
AEP Energy                     3%
Tenaska Power Service          3%

* Adjusted to include Energy Harbor

Constellation reported 2023 load served of 205 TWh, with about 70% of this total being Retail (~143 TWh). C&I load made up 90% of the Retail load served. Of the C&I Retail load, 75% was fixed price, 25% was indexed

Constellation 2023 Retail Electric Load Served by Region was as follows:

2023 Retail Electric Load Served
  (million MWhs)

Midwest                    38
Mid-Atlantic               45
ERCOT                      15
New York                   16
New England/South/West     29

Constellation served approximately 800 Bcf of gas in 2023

In a 10-K, Constellation said that it serves approximately 2 million total customers, with approximately 1.7 million unique residential customers.

In a 10-K, Constellation said that it will increase the quarterly dividend by 25% to $0.3525 per share starting in 2024, while targeting growth of 10% annually.

"We are allocating capital towards our best-in-class generation fleet by committing $875 million of growth capital expenditures over the next two years, including nuclear uprates and license renewals, wind repowering, and hydrogen with policy support. These organic growth opportunities are projected to exceed our double-digit return threshold," Constellation said in a 10-K

"In our commitment to return value to shareholders, we have also approved an increase to our previously announced $1 billion share buyback program, authorizing the repurchase of up to an additional $1 billion of company stock," Constellation said in a 10-K


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