Dive Brief:
- The U.S. General Services Administration and Constellation NewEnergy on Thursday announced an energy procurement deal aimed at boosting energy resilience and reliability for federal agencies.
- The $840 million contract would involve supplying more than 10 million megawatt hours of electricity over the course of a 10-year contract, according to GSA estimates stated in a news release. The procurement contract is expected to power 80 facilities in Illinois, Maryland, New Jersey, Ohio, Pennsylvania and Washington, D.C., Jefferies analysts wrote in a report released Friday.
- Amid uncertainty over future electricity prices and growing power demand from data centers, the contract “provides federal agencies with budgetary stability” and protection from future price hikes by keeping electricity costs fixed for 10 years, GSA noted.
Dive Insight:
Constellation will supply GSA with more than 1 million MWh per year starting in April.
The contract will supply power to GSA and 13 other government entities’ facilities in the specified areas, including the Social Security Administration, the Department of Veterans Affairs, the Department of Transportation, the Federal Reserve Board of Governors, the Federal Bureau of Prisons and the Washington Metropolitan Area Transit Authority, according to Constellation.
“This historic procurement locks in a cost-competitive, reliable supply of nuclear energy over a 10-year period, accelerating progress toward a carbon-free energy future while protecting taxpayers against future price hikes,” GSA Administrator Robin Carnahan said in a statement. “We’re demonstrating how the federal government can join major corporate clean energy buyers in spurring new nuclear energy capacity and ensuring a reliable, affordable supply of clean energy for everyone.”
“GSA’s procurement of 2.4 million MWh of electricity over the next decade from Constellation’s nuclear plants builds on commitments by the private and public sectors to invest in reliable, clean energy while promoting innovation and growth in the nuclear industry,” Maria Korsnick, president and CEO of the Nuclear Energy Institute, said in a statement.
Constellation plans to provide a portion of the contracted power via uprates, or investments in increasing its nuclear plant output. Power uprates at Constellation-operated nuclear facilities are slated to come online between 2026 and 2029, Jefferies says in its report. Over the 10-year contract period, roughly 25% of the electricity Constellation will supply is expected to come from these uprates, with about 75% of purchases from existing units, analysts at the firm state.
The procurement contract comes on the heels of an energy performance savings contract GSA awarded to Constellation last month, targeting energy conservation measures at five federally owned facilities in the Washington, D.C., area. In a separate news release Thursday, Constellation said that EPSC is now valued at $172 million
Constellation said that the EPSC work is slated to begin this month and continue for roughly 42 months. The energy producer noted that it will provide preventive maintenance services and ongoing training to GSA personnel to ensure that the newly renovated facilities in the National Capital Region “maximize energy efficiency and cost-savings efforts.”
