Power Producers Say the Data-⁠Center Deals Are Coming

HOUSTON, Nov. 9 — NRGNRG Energy agreed on Monday to sell six gas-fired power plants to LS Power for $4 billion in cash, and said its 1.2-gigawatt data-center project “remains on track.” “I’ve actually talked to our customer since the elections. This project is going to happen,” Robert Gaudette, its chief executive, said on the company’s call, according to a transcript published by Benzinga.

Constellation Energy of Baltimore raised the midpoint of its earnings forecast for the year, and its chief executive, Joe Dominguez, told investors that the market had overreacted to the election. They were the first quarterly results from either company since the Nov. 3 vote.

Both stocks rose more than 10 percent: NRG closed Monday at $97.40, up 10.32 percent, and Constellation at $276.09, up 10.46 percent. Vistra rose 7.31 percent, to $133.92. All three had fallen after the election, when, Barron’s reported, Wall Street worried that the Democrats’ win could bring heavier regulation of data centers.

The Sale

NRG had not been looking to sell. “LS Power approached us with an unsolicited offer at 8 times expected 2027 adjusted EBITDA,” Mr. Gaudette said. The six plants, 4.9 gigawatts in New York, New England and Texas, came with the LS Power portfolio NRG bought earlier this year, he said; NRG keeps that portfolio’s plants in PJM, the grid it shares with Constellation.Old Plants, New PricesMr. Gaudette put the Texas plant at Jack County at about $1,400 a kilowatt, against “just above $1,000 per kilowatt” for the 1.5 gigawatts of new gas plants NRG is developing in Texas. Across all six plants, the price is a little over $800 a kilowatt.

The proceeds will support $1 billion of additional share buybacks, starting this year, and $2 billion of debt reduction at closing, which NRG expects in the second quarter of 2027, subject to federal and New York approval.

Asked by an analyst whether the political turnover posed any risk to the data-center project’s timeline, Mr. Gaudette said “the political environment has actually strengthened this project and our projects.” He expects “approved agreements and an announcement by year end,” and did not name the customer. NRG’s long-term financial framework does not include the project, the company said on the call.

An Overreaction

Constellation earned $5.06 a share on an adjusted operating basis in the quarter, against $3.04 a year earlier, and narrowed its 2026 range to $12.50 to $12.80 a share. It agreed to pay Shell Energy North America $715 million for the Rhode Island State Energy Center, a 609-megawatt gas plant, and signed its first “Peak+” deal: 270 megawatts from its existing nuclear fleet for 20 years from 2028, paired with new generation and demand response, with a customer it did not name.Rhode IslandAt $715 million for 609 megawatts, Constellation is paying about $1,170 a kilowatt for its gas plant.

“In that regard, I do think we have seen a bit of an overreaction in market to the election results based upon fear that Democrats won’t let data centers get built,” Mr. Dominguez said on his company’s call, according to Benzinga’s transcript. There had already been a great deal of data-center development in Illinois and Virginia, where Democrats were in control before the election, he said. But Mr. Dominguez granted the skeptics a point: “the reality is that utilities and grid operators did not do a good job estimating the real number of data centers, and that resulted in a massive overestimation that caused legitimate fears by all policymakers.”

In that regard, I do think we have seen a bit of an overreaction in market to the election results based upon fear that Democrats won’t let data centers get built.

SoftBank Group said on Tuesday that it had taken a loss of ¥597.2 billion ($3.73 billion, at its own conversion) after Silver Bands 7, a subsidiary buying power-generation equipment for AI data-center projects in the U.S., revised its procurement strategy (SoftBank’s results). And on Monday evening the Senate voted 73 to 25 to end debate on the motion to take up a permitting bill that Senator Shelley Moore Capito, Republican of West Virginia, said in prepared floor remarks would make potential data centers “pay their own way” (the Senate’s vote).

The next tests are NRG’s promised data-center announcement and action by FERC on co-locating large loads with power plants, which Mr. Dominguez said is expected in the first half of next year.