Dive Brief:
On Thursday, the U.S. General Services Administration (GSA) partnered with Constellation NewEnergy to initiate a significant energy procurement agreement designed to enhance energy resilience and reliability for federal agencies.
The deal, valued at $840 million, aims to deliver over 10 million megawatt-hours (MWh) of electricity over a decade. This procurement is set to support 80 federal facilities across states including Illinois, Maryland, New Jersey, Ohio, Pennsylvania, and Washington, D.C., as highlighted by analysts from Jefferies.
According to GSA, this agreement is crucial in addressing uncertainties about future electricity pricing and the rising demand for energy, particularly from data centers. By fixing electricity costs for the next 10 years, it offers federal agencies budgetary stability and guards against potential price increases.
Dive Insight:
Starting in April, Constellation is expected to provide GSA with more than 1 million MWh of power each year. The energy supply will not only benefit GSA but also 13 other governmental facilities, including the Department of Veterans Affairs and the Social Security Administration.
GSA Administrator Robin Carnahan remarked that this historical procurement secures a dependable, cost-effective supply of nuclear energy, contributing towards a carbon-free energy future and shielding taxpayers from future cost inflation.
Maria Korsnick, president and CEO of the Nuclear Energy Institute, emphasized that this move reflects ongoing commitments from both private and public sectors to invest in clean, reliable energy, supporting growth in the nuclear sector.
Constellation also plans to enhance its nuclear output through upgrades, with some scheduled to come online from 2026 to 2029. It is projected that about 25% of the supplied electricity will stem from these enhancements, while the remaining 75% will come from existing nuclear facilities.
This procurement follows GSA’s recent awarding of an energy performance savings contract to Constellation aimed at improving energy efficiency at five federal buildings in the D.C. area, valued at approximately $172 million. Constellation will begin its energy efficiency endeavors this month, with a project timeline extending around 42 months, focusing on maximizing energy efficiency and cost savings for GSA.