A first-of-its-kind power purchase agreement will send more than 10 million MWh of power to federal buildings and help Constellation Energy increase the output from its nuclear fleet.
Constellation and the U.S. General Services Administration announced the contract Jan. 2. The 10-year deal is valued at $840 million and is accompanied by a $172 million contract for Constellation to provide energy savings and conservation upgrades at five GSA facilities in the D.C. region.
In its news release, GSA framed the announcement with the multipronged benefits of boosting U.S. nuclear generation capacity, protecting taxpayers from price hikes and helping 14 government entities transition to 100% carbon-free electricity by 2030.
Constellation operates the largest U.S. reactor fleet. The contract will help it meet the costs of extending licenses for its existing nuclear plants and installing upgrades that will increase their output by a combined 135 MW. It covers 80 federal facilities in five states within PJM territory and will begin in April.
GSA called the contract historic and said it was modeled on long-term corporate carbon-free procurements.
Not all of the power supplied under the deal will be carbon-free. Neither side specified the anticipated percentage, but GSA said that over the next decade, it would purchase 2.4 million MWh of Constellation’s newly expanded nuclear output, as well as the associated energy attribute certificates.
For Constellation, the agreement is another step toward the market certainty it needs to invest in nuclear power. For example, the company announced its 2024 request to renew the license for its Dresden nuclear facility with the caveat that it needed “adequate market or policy support.”
Corporate predecessor Exelon had planned to retire Dresden and another Illinois facility early, then kept them open when the state implemented policy changes in 2021. Constellation is now planning to restart a reactor at the former Three Mile Island facility to supply electricity to Microsoft data centers.
In Constellation’s news release Jan. 2, CEO Joseph Dominguez spoke of the value proposition his company’s “clean energy centers” present.
“For many decades, Constellation’s nuclear fleet has provided carbon-free, reliable, American-made energy to millions of families and institutions,” he said. “Frustratingly, however, nuclear energy was excluded from many corporate and government sustainable energy procurements. Not anymore. This agreement is another powerful example of how things have changed.”
He said the GSA agreement, like the previous agreements with Microsoft and other entities, “will allow Constellation to relicense and extend the lives of these critical assets.”
The energy will be supplied to the Architect of the Capitol, the GSA, the Social Security Administration, the Army Corps of Engineers, the Department of Veterans’ Affairs, the Department of Transportation, the U.S. Mint, the U.S. Railroad Retirement Board, the National Archives and Records Administration, the Federal Bureau of Prisons, the Federal Reserve System, the National Park Service, the National Oceanic and Atmospheric Administration, and the Washington Metropolitan Area Transit Authority in locations the agencies own or operate in Illinois, Maryland, New Jersey, Pennsylvania and Ohio.
The energy savings performance contract awarded to Constellation includes lighting, weatherization, HVAC and building control upgrades to increase energy efficiency, decrease emissions and lower energy costs.
Work will start shortly and continue for 42 months. The centerpiece is the conversion of four D.C.-area buildings from steam to electric boilers and heat pumps. Constellation also will provide preventive maintenance services and train GSA personnel.
