Constellation Energy to Acquire StarTex Power?

Posted on Posted in MX Energy, StarTex Power, Texas Electricity News

Paul Ring at Energy Choice Matters is claiming that Constellation Energy is in talks to purchase StarTex Power. This would be a huge purchase on a number of levels and would definitely make waves in the Texas electricity market. StarTex Power has been a fixture in the Texas market since 2004, and they currently serve 170,000 residential and commercial customers. On top of being one of the largest non-incumbent (Reliant, TXU) electricity providers in Texas, StarTex Power has excellent brand recognition in the market place and an excellent reputation for customer service. They’ve won the JD Power award multiple times and are highly regarded in the industry, both for their size as well as their product.

Another thing that makes this deal so surprising is not just the size of StarTex Power, but the fact that Constellation is still finalizing their deal to purchase MX Energy, which was announced just 2 weeks ago. This would be a much larger deal for Texas residential customers, because while MX does service electricity in Texas, their major asset was really natural gas interests in Ohio. StarTex Power is solely a retail Texas electricity provider, one of the largest in Texas. If true, however, this would be the second announced planned purchase in 2 weeks for Constellation Energy, which itself is in discussions to merge with Exelon Energy. That is certainly a lot of moving parts.

So who exactly is Constellation Energy? From their website:

Constellation Energy has a long and pioneering history in the energy industry. From our roots as the nation’s first gas light utility, our company has evolved into one of the largest and most innovative energy companies in America. Constellation Energy is a publicly traded (NYSE ticker: CEG) Fortune 500 leader, headquartered in Baltimore, with nearly 10,000 employees, approximately 12,000 megawatts of generation capacity and $14.3 billion in annual revenues (2010).

And nearly 200 years later, we’re still innovating at Baltimore Gas and Electric Company (BGE), Maryland’s oldest and largest utility. BGE is poised to roll out one of the most comprehensive Smart Grid programs in the nation.

More specifically, Constellation Energy functions as a wholesale electricity generator and distributor of power. Which means it owns and operates a number of fossil fuel plants that generate the electricity, as well as owning companies like Baltimore Gas & Electric which sell and distribute that electricity to residential and commercial customers. There flurry of recent activity would add the customers of MX Energy and StarTex Power to that roster of energy distributors. It’s hard to tell for certain, but the purchase of MX and StarTex would potentially give Constellation somewhere in the neighborhood of 180,000 customers in Texas.

If the report of StarTex’s purchase is true, it will certainly be interesting to watch and see what changes come about StarTex and MX Energy customers from a service perspective. But it will also be interesting to watch and see if Constellation continues to buy their way into competitive electricity markets, and at what rate.

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