Constellation Reports Second Quarter 2022 Results

BALTIMORE–(BUSINESS WIRE)–Constellation Energy Corporation (Nasdaq: CEG) today reported its financial results for the second quarter of 2022.

“The landmark climate legislation currently under consideration in Congress is a clear affirmation of the value of our carbon-free nuclear fleet and its indispensable role as part of the clean energy infrastructure needed to achieve our nation’s ambitious climate goals,” said Joe Dominguez, president and CEO of Constellation. “It touches every one of the environmental, public health and job-creating priorities we laid out on day one, including providing the foundation to support the ongoing operation of U.S. nuclear energy sources, establishing a clean hydrogen economy, enabling the expansion of renewable resources and safeguarding our nation’s energy security in a way that is affordable. We continued to win new customer business and demonstrate our industry-leading operational performance during the second quarter, and we are pursuing new clean-energy opportunities as we work to accelerate the transition to a carbon-free future.”

“We delivered solid financial results during the quarter, earning $603 million in adjusted EBITDA backed by higher realized energy prices and lower nuclear fuel costs. We have reaffirmed our full-year, adjusted EBITDA guidance of $2.35 billion to $2.75 billion,” said Daniel Eggers, chief financial officer of Constellation. “Our balance sheet and liquidity position remain strong, and our investment grade balance sheet continues to give us a valuable competitive advantage in today’s volatile markets.”

Second Quarter 2022

Our GAAP Net Loss for the second quarter of 2022 increased to ($111) million from a ($61) million GAAP Net Loss in the second quarter of 2021. Adjusted EBITDA (non-GAAP) for the second quarter of 2022 decreased to $603 million from $656 million in the second quarter of 2021. For the reconciliations of GAAP Net Loss to Adjusted EBITDA (non-GAAP), refer to the tables beginning on page 3.

Adjusted EBITDA (non-GAAP) in the second quarter of 2022 primarily reflects:

• Decreased capacity revenues and unfavorable impacts of planned nuclear outages; partially offset by favorable market and portfolio conditions.

Recent Developments and Second Quarter Highlights

• Consideration of the Inflation Reduction Act by Congress: On July 27, 2022, Senate Majority Leader Chuck Schumer and Senator Joe Manchin announced they have reached an agreement on budget reconciliation legislation, known as the Inflation Reduction Act of 2022. The legislation provides a nine-year production tax credit to support carbon-free nuclear energy resources in recognition of their critical role in addressing the climate crisis. It also creates a tax credit for the production of clean hydrogen, which can be made with nuclear and other carbon-free energy resources. Climate experts have identified hydrogen as a critical resource to help remove emissions from difficult-to-decarbonize sectors of the economy.
• Largest Offsite Renewable Deal to Date: Constellation entered into a 15-year, 300 MW agreement with developer Doral Renewables to receive approximately 600,000 MWh annually from Mammoth Central, the third and final phase of the Mammoth Solar project in Indiana. To support the expansion of this project, we signed separate long-term Constellation Offsite Renewables (CORe) agreements with retail customers, including:
  • Bank of America: Our 160 MW agreement with Bank of America will help to power approximately 17 percent of its global electricity consumption with clean, renewable energy from a portion of the Mammoth Central project and is expected to reduce greenhouse gas emissions (GHG) associated with its energy use by more than 95,000 metric tons annually.
  • PNC Bank: Our 78 MW agreement with PNC will help the company purchase renewable energy equivalent to the electricity use of nearly 50 percent of its legacy operations in Pennsylvania, Ohio, Maryland, New Jersey, Delaware, District of Columbia and part of Illinois. The transaction will advance PNC toward its goal of reaching 100 percent renewable purchased electricity by 2025 while reducing its carbon footprint by 55,000 metric tons annually.

The CORe retail power product increases businesses’ access to new-build renewable energy projects by removing the significant hurdles associated with traditional offsite power purchase agreements (PPAs). By combining the simplified contracting and aggregation process of CORe with the commitment and involvement from sustainability-minded companies, Constellation is able to offer more customers access to the economic and sustainability benefits of large-scale, offsite renewable energy projects. CORe is among Constellation’s suite of products that help customers achieve their carbon reduction goals, including opportunities to match power usage hour-by-hour with locally produced carbon-free energy on a 24/7/365 basis.

• Nuclear Operations: Our nuclear fleet, including our owned output from the Salem Generating Station, produced 42,522 gigawatt-hours (GWhs) in the second quarter of 2022, compared with 43,072 GWhs in the second quarter of 2021. Excluding Salem, our nuclear plants at ownership achieved a 94.2% capacity factor for the second quarter of 2022, compared with 93.8%¹ for the second quarter of 2021. The number of planned refueling outage days was 66 in both the second quarter of 2022 and the second quarter of 2021. There were 15 non-refueling outage days in the second quarter of 2022 and seven in the second quarter of 2021.
• Natural Gas, Oil, and Renewables Operations: The dispatch match rate for our gas and hydro fleet was 99.6% in the second quarter of 2022, compared with 99.5% in the second quarter of 2021. Energy capture for the wind and solar fleet was 95.3% in the second quarter of 2022, compared with 96.0% in the second quarter of 2021. The lower performance in the quarter was driven by delays in turbine maintenance repairs at certain wind sites.

¹Prior year capacity factor was previously reported as 93.7%. The update reflects a change to the ratio from using the full average annual mean capacity to the net monthly mean capacity when calculating capacity factor. There is no change to actual output and the full year capacity factor would be the same under both methodologies.

About Constellation

Constellation Energy Corporation (Nasdaq: CEG) is the nation’s largest producer of clean, carbon-free energy and a leading supplier of energy products and services to millions of homes, institutional customers, the public sector, community aggregations and businesses, including three fourths of Fortune 100 companies. A Fortune 200 company headquartered in Baltimore, our fleet of nuclear, hydro, wind and solar facilities have the generating capacity to power approximately 20 million homes, providing 10 percent of all carbon-free energy on the grid in the U.S. Our fleet is helping to accelerate the nation’s transition to clean energy with more than 32,400 megawatts of capacity and annual output that is nearly 90 percent carbon-free. We have set a goal to achieve 100 percent carbon-free power generation by 2040 by leveraging innovative technology and enhancing our diverse mix of hydro, wind and solar resources paired with the nation’s largest nuclear fleet. Follow Constellation on Twitter @ConstellationEG.