Constellation Energy Corp. is nearing an acquisition of Calpine Corp., people familiar with the matter said, in what would be one of the biggest ever deals in the power generation sector.

Baltimore-based Constellation is in discussions with Calpine’s private equity owners about the terms of a transaction that could value the company at about $30 billion including debt, according to the people. A deal may be announced in the coming weeks, they said.

Energy Capital Partners, CPP Investments and Access Industries agreed to take Calpine private in 2017 in a deal valued at more than $17 billion including debt. Shares in Constellation have doubled in New York trading over the last 12 months. They dropped as much as 11% Wednesday on news of the potential Calpine transaction, giving Constellation a market value of about $72 billion.

Founded in the 1980s, Calpine runs almost 80 facilities across 22 states and Canada, according to its website. The company generates electricity from natural gas and geothermal resources that helps power roughly 27 million homes every year.

After decades of flat U.S. power demand, the need for electricity is skyrocketing thanks to data centers running artificial intelligence operations, new factories and the electrification of everything from cars to home heating. U.S. demand for electricity will surge almost 16% over the next five years, according to a December report for Grid Strategies.

Constellation’s deliberations over a deal for Calpine are ongoing and could still be delayed or falter, the people said, asking not to be identified discussing confidential information. The final price of a deal could still change, they said.

Representatives for Constellation and CPP declined to comment. Representatives for ECP, Access Industries and Calpine couldn’t immediately be reached for comment or didn’t immediately provide comment.

When Constellation was spun off from Exelon Corp. in 2022, Chief Executive Officer Joe Dominguez said he was interested in growing the company through mergers and acquisitions. The following year, Constellation paid $1.75 billion for NRG Energy Inc.’s 44% stake in a Texas nuclear plant.

The value of deals in the power generation sector rose by a third last year to about $129 billion, data compiled by Bloomberg show. Among the largest transactions was a takeover of Atlantica Sustainable Infrastructure Plc by ECP and a group of co-investors.

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(With assistance from Crystal Tse and Will Wade.)

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