Constellation CEO on Gas, Power Prices and Data Center Demand at CERAWeek

Summary

• U.S. natural gas prices remain stable despite Middle East conflicts, as domestic production and LNG exports are at capacity, with no immediate impact on Constellation.
• Geopolitical instability in the Middle East may deter data center construction there, shifting more projects to the U.S., benefiting domestic electricity producers like Constellation.
• Nuclear power is gaining social acceptance due to data center and AI demand; Constellation is investing billions to secure and upgrade its existing fleet, targeting output equivalent to 6-7 new plants.
• Data centers initially drive up electricity costs during peak hours (about 40 out of 8000 hours annually), but proper grid integration can reduce overall costs by improving utilization.
• Constellation employs strategies like voluntary demand reduction from industrial customers, using backup generators and batteries, and planning new gas-fired generation to manage peak demand.
• The company gauges data center demand growth through customer capital expenditures, seeing no signs of a bubble and expecting continued expansion.
• Constellation is active in all nuclear areas: securing the existing fleet, increasing output, and developing new units, including small modular reactors.
• An evolving conversation exists on balancing data center growth with consumer affordability, with potential for cost savings if peak demand is managed effectively.