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Baltimore energy supplier Constellation Energy announced today it plans to acquire CPower, a demand response company that helps businesses manage peak-time energy use and offers them financial incentives to cut power consumption.

The purchase will allow Constellation to expand into important markets like Texas and New England, Constellation said, and will increase the demand response capacity of the group by 850 megawatts to a  total capacity to 1,500 megawatts. Terms of the deal were not disclosed.

Demand response is a growing field – it allows companies to reduce energy used during peak times, which can be parlayed into financial incentives from utilities. Energy that businesses save can also be sold to other businesses.

CPower’s last round of funding, for $10.7 million, closed April of last year. One of its backers in that round was Mayfield Fund, whose managing director Navin Chaddha said the company didn’t expect such a quick exit (but is of course happy with it).

“It’s a very good return for the investors in that round, a very high IRR (internal rate of return),” Chaddha said. “There are very few successful exits in cleantech, and probably this would be on the higher end.”

Chaddha said Constellation was not the only company interested in CPower, and the deal has been in the works for the last few months. The acquisition of CPower, which is essentially a services player, by a major energy company is a sign of “what’s to come” in the cleantech field, he added.

“Non-traditional buyers of tech companies are coming into this market, which is great for entrepreneurs and venture capitalists and the whole ecosystem,” Chaddha said. “It means this is becoming a top priority … we believe the market trend has just started and barely us or anyone else has even scratched the surface.”

In the past, CPower has partnered with utilities, such as Maryland companies Allegheny Power and Light Company, to provide financial incentives to businesses that agree to cut energy usage. The CPower acquisition could well be a trendsetter for the demand response field — it will be interesting to see if other energy providers set their sights on CPower’s competitors, EnerNOC and Comverge.

The deal is expected to close in the fourth quarter. CPower’s investors also include Bessemer Venture PartnersExpansion Capital PartnersSchneider Electric VenturesNew York City Investment Fund and Consensus Business Group.

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