Constellation Energy, a $15.6-billion  Fortune 500 energy company, today said that it has signed an asset purchase agreement with Boston Generating to acquire its 2,950-megawatt fleet in the New England region, for about $1.1 billion.

The proposed transaction is expected to be consummated through a court-approved bankruptcy proceeding to be initiated by Boston Generating. If approved, Constellation Energy's bid would then be considered the price to be beat in an asset auction to be held later this year.

If Constellation Energy is ultimately the successful acquirer, under terms of the agreement, it would acquire Boston Generating's five power plants located in the Boston area, four natural gas fired plants, including Mystic 8 and 9 (1,580 megawatts), Fore River (787 megawatts), Mystic 7 (574 megawatts); and a fuel oil plant, Mystic Jet (9 megawatts).

Constellation Energy has previously stated its interest in acquiring physical generation assets in the New England Power Pool, where the company operates large retail and wholesale competitive supply businesses.

Baltimore-based Constellation Energy is a leading supplier of energy products and services to wholesale and retail electric and natural gas customers. It owns a diversified fleet of generating units located in the US and Canada, totaling approximately 9,000 megawatts of generating capacity, and is among the leaders pursuing the development of new nuclear plants in the US.

The company delivers electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland.

Constellation Energy currently serves approximately 13.3Twh of customer load in the New England Power Pool market where Boston Generating is located. The company currently has no generation assets in the region.

"This agreement is consistent with Constellation Energy's previously stated intention to purchase physical generation assets in regions where we have significant load obligations," said Mayo Shattuck, III, chairman, president and chief executive officer of Constellation Energy.

"These assets would expand our physical generation fleet with a portion of the total output further improving our net load to generation ratio to approximately 55 percent," he added.

Based on the current bid price, Constellation Energy would expect this transaction to be accretive to earnings beginning in 2011 and it plans to finance this transaction through a mix of available cash on hand and debt.