Constellation Energy said it is closing in on new power purchase agreements and is in a good position to help serve projected data center load — whether in front of the meter or behind.
During the company’s first-quarter earnings call with financial analysts on May 6, CEO Joe Dominguez also gave optimistic updates on its acquisition of natural gas generation company Calpine and its planned restart of the former Three Mile Island nuclear plant.
Data centers were a recurring focus of the presentation, however, and Dominguez said Constellation feels the sky-high projections of the power demands posed by the artificial intelligence revolution are exaggerated — in some cases by stakeholders trying to build a business case for new wires or generation.
“I think the load is being overstated. We need to pump the brakes here,” he said.
He cited as an example projections by ERCOT, MISO and PJM of a combined 140 GW of new large-load demand by 2030 and contrasted that with forecasts by third-party analysts that average out to only 74 GW of new data center demand in that period in the entire country.
“Large-load demand” is more than just data centers, but a significant portion of those new large loads are expected to be data centers.
The problem is a familiar one: developers shopping around in multiple locations with a single early-stage plan that may not even get built but which gets added to the tally of potential growth in each jurisdiction.
“We know from conversations from our customers and the end users that the same data center need is being considered in multiple jurisdictions across the United States at the same time,” Dominguez said.
He added that renewable energy developers do the same thing, cramming interconnection queues with projects that have only a fractional likelihood of ever being built.
“It’s hard not to conclude that the headlines are inflated,” Dominguez said. “In fact, we’ve done the math, and if Nvidia were able to double its output and every single chip went to ERCOT, it still wouldn’t be enough chips to support some of the load forecasts. In ERCOT, there’s been a history of over-forecasting.”
A recent RMI analysis based on FERC data concluded that over the past decade, utilities’ long-term demand forecasts were 23% higher than what actually came to pass, he added.
But Constellation does expect load growth and for that growth to present the company with a strong market position. It hopes to absorb Calpine’s fleet and finish the year with more than 50 GW of operating generation in place; the cost and time frame to build a comparable new fleet would be daunting.
Constellation’s Wolf Hollow and Colorado Bend combined cycle gas turbine plants, for example, would cost about 300% more today than they did when built less than a decade ago.
Crane Clean Energy Center — Unit 1 of the former Three Mile Island — is aiming for a 2028 restart. It was among the 51 projects PJM selected for expedited interconnection studies; more than half of the 600 employees needed to run the plant have been hired; the first reactor operator class is underway; and the second operator class is on deck for this autumn.
In late April, Constellation answered FERC’s deficiency letter on its proposed acquisition of Calpine, and the company expects the deal to be approved and to close later this year. For its $29 billion outlay, Constellation will gain generation capacity that would cost $65 billion to build new.
“The short story here is that we’re seeing a very, very favorable environment,” Dominguez said. “We believe our offerings for clean and reliable generation are far more attractive from a time and pricing standpoint than any competing option, whether that’s used to support on grid data center development or behind the meter development.”
Possible headwinds facing Constellation include tariffs, a recession and hotly debated regulations on generation being co-located with load.
Past recessions historically resulted in a 1 to 4% decrease in demand, with weather patterns complicating any attempt to generalize the relationship between the economy and demand. This time around, the demand growth that is occurring would offset a temporary economic slowdown, Dominguez said. Also, the production tax credit for Constellation’s nuclear fleet gives the company downside protection from falling power prices during a recession.
The final shape of tariffs remains to be seen, Dominguez said, but Constellation’s preliminary estimate is for a 1 to 2% impact on 2025/26 capital expenditures, excluding fuel, but a negligible impact on operations and maintenance.
The outcome of the co-location debate is not clear, Dominguez said, and the industry desperately needs clarity. One byproduct of the controversy, he added, is that utilities have sped up the interconnection process. He applauded them for that and urged FERC to allow for some latitude in its rulemaking.
“It’s important that FERC not constrain innovation for co-generation and co-location,” he said.
Constellation reported unadjusted GAAP income of $118 million ($0.38/share) in the first quarter of 2025, down from $883 million ($2.78/share) in the same period in 2024.
It reported adjusted non-GAAP earnings of $673 million ($2.14/share) in the first quarter of 2025, up from $579 million ($1.82/share) in the same period in 2024.
The company’s stock price soared May 6 after the release of the financials, closing 10.3% higher as the three major U.S. stock market indexes all closed lower.
