Exelon Corp. unit Constellation has agreed to acquire the retail power and natural gas business of ConEdison Solutions, which is a subsidiary of Consolidated Edison Inc.

Constellation plans to acquire ConEdison Solutions’ retail gas and power customer contracts and associated supply contracts. The business serves more than 560,000 commercial, industrial, public sector and residential customers across 12 northeastern, mid-Atlantic, and midwestern states, Texas and the District of Columbia.

“ConEdison Solutions’ gas business, which launched in 2014, currently serves natural gas customers in New York and New Jersey,” said Constellation spokesman Kelly Biemer. “The acquisition provides an opportunity to continue to grow our natural gas business in strategically attractive markets in the Northeast, and gives us a presence in the downstate New York gas business, where we’re not currently operating.”

Headquartered in Valhalla, NY, the retail electricity and natural gas business within ConEdison Solutions includes about 85 employees and is considered the 13th largest commercial/industrial and 16th largest residential electricity retailer in the country. The company delivered about 14 TWh of electricity and 1 Bcf of natural gas in 2015.

The purchase, Constellation said, strengthens its position as the “nation’s largest” competitive energy supplier to more than 2.5 million residential and business customers across the continental United States.

“This agreement provides an opportunity to grow our retail electricity and natural gas business in strategically attractive markets where we’re best suited to match load served with Exelon generation assets,” said Constellation CEO Joseph Nigro.

ConEdison Solutions’ retail electricity and gas business would operate under the Constellation brand after a post-closing transition period that is expected to be complete in 2017.

Continuing as a unit of Consolidated Edison, ConEdison Solutions would retain its focus on renewable energy, sustainable services and energy efficiency solutions for commercial, industrial, residential and government customers.

“This move will enable our company to focus our attention and our resources on making energy services and renewable energy offerings even more competitive and well-positioned for rapid growth,” said ConEdison Solutions CEO Mark Noyes. “With this sale, we are realizing the rewards of over 18 years of successful participation in retail electricity and natural gas markets, and we will recommit our remaining people and resources to the growth of ConEdison Solutions.”

ConEdison Solutions had been growing its small retail natural gas business, Noyes told NGI. “Constellation has a big retail gas component, and so that gas component is going with the retail book and they’re going to continue to grow that part of the business out,” he said. “The main reason that we aren’t continuing to keep that and grow it out is that the retail business is pretty volatile from an an earnings standpoint, and we’re looking for businesses that have more predictable earnings per share.

“With renewables you have no fuel element, for one, and there are long-term contracts, typically in the 20-25 year range, whereas on the retail side typical contracts are 12 months to 48 months. So the contracted nature of the assets is more predictable and then you have obviously less weather and load fluctuation due to those external forces.”

Terms of the deal were not disclosed. It is subject to antitrust clearance; closing is expected by the end of this year.