Calpine finishes $1.63 billion acquisition of Conectiv Energy from Pepco Holdings

Calpine closes $1.63B deal for Pepco power plants

HOUSTON — Calpine Corp. on Thursday completed the purchase of Conectiv Energy and its 19 power plants from Pepco Holdings Inc.

The companies valued the deal at $1.63 billion after adjustments, down from $1.65 billion in April when they announced the sale. The acquisition includes power plants in Delaware, Maryland, Virginia, and southern New Jersey, and a natural gas facility that is under construction in Pennsylvania. Calpine said the Pennsylvania facility should be finished in 2011.

Pepco said its profits should be steadier because of the sale, as it is less exposed to the energy commodity markets. Pepco added it will need less capital and collateral and should have stronger credit.

Standard & Poor’s raised its rating on Pepco’s credit to “BBB+” from “BBB” after the sale was completed. Both ratings are investment grade. The ratings agency removed Pepco from CreditWatch.

Shares of Houston-based Calpine fell 28 cents, or 2.2 percent, to $12.44 in afternoon trading. Shares of Washington-based Pepco dipped 9 cents to $15.59.