The Justice Department’s Antitrust Division, in collaboration with the Attorney General of Texas, has announced the requirement for Constellation Energy Corporation to divest six power plants as a condition for proceeding with its $26.6 billion acquisition of Calpine Corporation. This decision aims to resolve antitrust concerns that could negatively impact competition in the electricity market.

A civil antitrust lawsuit was filed in the U.S. District Court for the District of Columbia to block the acquisition, alongside a proposed settlement that, if approved, would alleviate competitive concerns. Assistant Attorney General Abigail Slater emphasized the importance of competition among electricity generators for American consumers, particularly in light of rising electricity prices.

The acquisition would have resulted in the largest wholesale power generator in the U.S., raising fears that the combined entity could withhold electricity from its plants, leading to increased prices for consumers in Texas and surrounding states. The divestiture includes four plants serving the PJM electricity grid and two plants serving the ERCOT grid.

The divested plants include the Bethlehem Energy Center in Pennsylvania, the York Energy Center, the Hay Road Energy Center, the Edge Moor Energy Center, the Jack A. Fusco Energy Center in Texas, and the Gregory Power Plant. This marks the first settlement consent decree filed by the Division in an electricity merger in 14 years.

Constellation, headquartered in Baltimore, Maryland, is a major player in electric generation, while Calpine, based in Houston, Texas, is the largest generator of electricity from natural gas and geothermal sources in the U.S. The proposed settlement will be published in the Federal Register, allowing for public comments before a final judgment is made.