Constellation to acquire Shell's Rhode Island State Energy Center for $715 million

Constellation's $715 million deal for the Rhode Island State Energy Center

Constellation Energy Generation has agreed to acquire Shell's interests in RISEC Holdings, the owner of the Rhode Island State Energy Center in Johnston, R.I., for $715 million. The plant is a 609 MW, two-unit combined-cycle natural gas facility with two combustion turbines and one steam turbine that sells electricity and capacity into the competitive ISO New England wholesale power market, according to Shell's announcement and Reuters. Constellation framed the deal as immediately accretive to operating earnings and said it targets approximately 10% unlevered returns. Constellation chairman, president and chief executive officer Joe Dominguez said the asset "perfectly complements Constellation's extraordinarily successful customer business in New England" and is "well-positioned on both the electric grid and the natural gas pipeline system."

Shell's parallel acquisition of a 169 MW Pennsylvania plant

On the same day, Shell Energy North America (SENA), a subsidiary of Shell plc, separately agreed to acquire 100% of Hunlock Creek Generating LLC from Riverview Power Holdings LLC, an indirect subsidiary of Castleton Commodities International. Hunlock owns 169 MW of natural gas-fired capacity in Pennsylvania, comprising a 125 MW two-unit combined-cycle plant and a 44 MW simple-cycle peaking plant, according to Stock Titan and World Oil. Both reports said the acquisition will give Shell additional flexible capacity in the PJM Interconnection market, with Stock Titan specifying the PJM Mid-Atlantic area. SENA described the RISEC sale as bringing forward expected returns through a significant gain on sale, while the Hunlock acquisition is projected to generate returns above Shell's investment requirements for its power business.

Timing, regulatory path and existing contractual ties

Both transactions are subject to regulatory approvals and are expected to close in the first quarter of 2027, according to Reuters and the Shell press release carried by Stock Titan and World Oil. World Oil reported that SENA has maintained an energy conversion agreement covering RISEC's full electricity output since 2019 and that the agreement will terminate when the transaction closes.

Stated portfolio rationale from both sides

Shell president of Trading & Supply Andrew Smith described both moves as part of "our dynamic approach to managing our trading portfolio," saying Shell "selectively invest[s] in assets that strengthen our market position and create value, while remaining ready to realize value when market conditions present attractive opportunities." World Oil reported that SENA said the Hunlock assets will complement its power and natural gas trading operations. On the other side of the deal, Constellation characterized RISEC as fitting its merchant generation strategy alongside its regional customer business in New England, with Dominguez saying the company "look[s] forward to closing the transaction and to begin working with the fantastic team at RISEC."