Constellation Energy's Data Center Deals Benefit from PJM/FERC Clarity Q4 2025

Bottom line: Constellation expects PJM/FERC regulatory clarity to reduce contracting friction and improve “deal certainty” for data center customers, but it will not be a gating item for Constellation’s contracting activity.

Management explicitly links regulatory clarity to customers’ ability to finalize and structure agreements—“regulatory clarity helps deals get done” and Constellation believes data center development will benefit from that clarity. ¹ At the same time, Constellation states it is “not waiting on regulatory clarity” to structure deals and can contract now regardless of how PJM proceedings resolve. ¹

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1) What PJM/FERC regulatory clarity changes for Constellation’s data center deals

A. Less customer uncertainty on the “rules of the road,” improving deal completion

Constellation describes the core problem as peak-demand management and how costs/rules flow among stakeholders, and it expects FERC to provide clearer rules this year—management says it is seeing “a FERC… highly motivated to get this done” and hopes it provides clarity “this year” to resolve questions in customers’ minds. ²

It also frames the PJM segment as needing “regulatory certainty,” noting “greater alignment among stakeholders on core priorities.” ³ Management enumerates those priorities: accurate demand forecasts, ensuring large load customers cover infrastructure costs, providing competitive avenues (not just utilities), and customer flexibility at peak. ⁴

Impact on data center deals: when customers are confident about future peak-capacity and cost-responsibility requirements, they can finalize long-term PPAs/arrangements with fewer renegotiations late in the process—exactly the friction Constellation says it has been managing due to PJM rule-making and hyperscaler renegotiations. ¹

B. Faster contracting because Constellation can offer “combinable” solutions that map to multiple regulatory outcomes

Even while awaiting clarity, Constellation points to a modular suite of offerings designed to fit different customer plans. Customers may meet future requirements by pairing nuclear with incremental capacity via “batteries, demand response, upgrades and gas-fired generation.” ¹

This modularity becomes more valuable when the regulatory framework is clearer—customers can select the most cost-effective compliance pathway with more confidence, rather than keeping flexibility “in reserve” because of uncertainty. ¹

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2) How the current regulatory uncertainty already affected (and delayed) some contracting

Constellation explains that since its last call it had to “rethink and renegotiate some of the terms of the PPAs” being worked on to anticipate outcomes of PJM rule-making. ¹ This suggests that, absent regulatory clarity, hyperscalers and developers may:

• adjust offtake terms in response to potential market design changes, and/or
• delay announcements until stakeholders and policymakers are aligned. ¹

Management also states it did not announce an important transaction in that period partly because there is “more scrutiny on data center development” and earnings calls provide limited time for stakeholder alignment and community-benefit discussion. ¹

Impact: regulatory ambiguity increases negotiation complexity and can push some deals out in time, even if end-demand remains strong. ¹⁵

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3) Constellation’s explicit “regulatory clarity” transmission mechanism to deal economics

A. Management’s specific expectation: regulatory clarity improves deal completion, not just demand

They state directly: “All of you know regulatory clarity helps deals get done.” ¹

B. But deal execution is already proceeding using backstopable contract structures

Constellation says that “regardless of how the PJM proceedings resolve, Constellation can structure deals now” and that customers have multiple options: pairing nuclear with battery/DR/capacity solutions, or buying capacity/backstop service approaches through PJM while purchasing energy/attributes from Constellation. ¹⁶

It further notes that while it awaits regulatory clarity, “customers are moving forward” and Constellation anticipates outcomes ranging from providing “backstop generation” to incorporating a “PJM backstop capacity cost” into agreements. ⁴

Interpretation: regulatory clarity is expected to reduce the need for “contingent” backstops or complex pricing mechanisms, which can improve the speed and simplicity of contracting (and potentially margins if terms reflect lower perceived regulatory risk).

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4) What it means in practice for the asset/solution mix Constellation offers

A. Peak flexibility is central to PJM/FERC “clarity,” so Constellation emphasizes peak-capable resources

Management emphasizes that FERC/PJM discussions converge on ensuring load customers cover infrastructure costs and that customers are flexible at peak. ⁴ Constellation positions multiple resources to meet that peak flexibility requirement:

• incremental capacity via “batteries, demand response… and gas-fired generation” ¹
• ability to provide “backstop generation” or include PJM backstop capacity costs in contracts ⁴
• contract designs where customers buy PJM capacity while buying energy/attributes from Constellation ⁶
• the notion that customers can “flexibly respond or curtail during peak hours” with on-site resources (e.g., backup generation) ⁶

B. Constellation highlights a technologically “dispatchable” approach aligned with peaks

Management points to AI-driven load management that helps dispatch peaks—describing a data transfer capability between data centers around peak demand hours. ⁶ While this is technology-focused, it ties directly to the regulatory objective: peak flexibility and reliable power during high-demand intervals. ⁴

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5) Timing expectations: Constellation expects clarity “this year,” but is not dependent on it

Constellation says it expects clarity “from FERC this year” and that this should “clear up questions in the minds of customers and others.” ²

Yet management simultaneously states that:

• Constellation is already contracting and “customers are moving forward” while clarity is pending. ⁴
• Constellation is “not waiting on regulatory clarity or certainty” to power AI growth. ¹

So the likely effect is incremental rather than binary: clarity should improve contracting confidence and reduce negotiation churn, but the company views its deal pipeline as capable of functioning under multiple regulatory endgames. ¹⁴

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6) Why this should matter specifically for data center and clean energy deals (Constellation’s stated demand is durable)

Constellation argues that climate/reliability value is enduring and large customers are not wavering on long-term clean energy commitments. ³ It also states demand is real and that it believes customers seek reliability/visibility and long-term contracting. ⁷⁸⁹

Thus, regulatory clarity is less about creating demand and more about enabling customers to implement their demand with fewer regulatory delays/renegotiations—particularly on peak/capacity compliance details. ¹²⁴

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Conclusion (direct answer)

PJM and FERC regulatory clarity is expected to reduce uncertainty about peak-management rules and customer cost responsibilities, which management believes will “clear up questions in the minds of customers” and help “deals get done.” ¹²⁴ For Constellation’s data center and clean energy deals, this should improve contracting speed and certainty by making it easier for hyperscalers/data center developers to finalize PPAs and compliance-backed arrangements without extensive renegotiation tied to PJM rule-making outcomes. ¹²

However, Constellation emphasizes it is not dependent on regulatory clarity: it can structure deals now using flexible pathways (e.g., combining clean nuclear with batteries/demand response/backstop capacity or PJM backstop capacity costs) and is already seeing customers move forward while awaiting clarity. ¹⁶⁴