Constellation Energy to acquire CPower; seeks to scale demand response
In a bid to scale its demand response business, Constellation Energy on Friday announced that it would acquire energy management company CPower.
The deal folds New York, N.Y.-based CPower's portfolio of 850 megawatts of demand response capacity into Baltimore, Md.-based Constellation's existing portfolio, boosting total capacity to 1,500 megawatts.
Terms of the acquisition were not disclosed.
Demand response schemes allow commercial, utility and public sector companies to reduce electricity demand during peak periods. For commercial customers, that means a lower energy bill; for utility companies, that means needing less power plants to accommodate for maximum capacity requirements -- and avoiding summertime grid failures.
The name of the game here is scale. By acquiring CPower, Constellation expands its reach in lucrative markets such as Texas, New England and the Mid-Atlantic (it also manages capacity in California and Ontario, Canada), and reaps all the cross-selling opportunities and operational benefits of more employees.
Further, it moves CPower out of the startup category (among its backers are venture capital firms the Mayfield Fund, Bessemer Venture Partners, Expansion Capital Partners, Schneider Electric Ventures, New York City Investment Fund and Consensus Business Group), allowing it to gain the trust of bigger utility customers.
The deal is expected to close in the fourth quarter of 2010.
This post was originally published on Smartplanet.com