O'Malley firm on energy demands

Gov. Martin O'Malley is forcefully defending his demands for concessions to help ratepayers as a state commission weighs whether to approve Constellation Energy's deal with a French utility company.

A state brief filed with the Public Service Commission on Monday reiterates many of the conditions that doomed negotiations earlier this year between the administration and Constellation, which is seeking to close a $4.5 billion sale of almost half its nuclear business to Electricite de France.

"I don't work for Constellation. I don't work for (CEO) Mayo Shattuck," O'Malley said yesterday. "I'm not going to compromise my integrity and that position in order to receive a pat on the back at the country club or the Center Club (in Baltimore). I work for the people."

The PSC has been holding hearings to determine how the deal could affect Baltimore Gas and Electric Co., the regulated utility arm of Constellation that has a large footprint in Anne Arundel County.

There is no definite time frame for when a decision will be reached, LaWanda Edwards, a spokeswoman for the commission, said in an e-mail. One could be made within the next week.

The governor's comments are the latest volley in a political firefight that has gone on for most of O'Malley's term, as Maryland struggles to get enough energy at reasonable rates.The state steadfastly maintains that the proposed transaction could have significant consequences for consumers if stringent stipulations are not applied.

O'Malley's administration wants Constellation to provide one-time rate credits of about $200 to customers, limit executive compensation and take other measures, such as creating an independent board of directors, to insulate BGE from any future financial liabilities of Constellation.

O'Malley said he refuses to take a position that will align him with people who say "what a great job they do when they stick it to consumers with 70 percent rate increases."

"From the beginning, the goal has been to make sure the consumers' interests were protected," he said.

Not surprisingly, Constellation sees the situation differently and said in its own filing that the proposed transaction has "numerous and substantial benefits," such as $129 million in immediate state tax revenue and $22.5 million for consumers from either capping a future rate increase or crediting ratepayers.

Company officials have also repeatedly said the deal would make it more likely that another nuclear reactor could be built at Calvert Cliffs, providing jobs and power.

"By any fair, independent measuring stick, this transaction more than satisfies the test of providing benefits to consumers, including BGE's customers," the filing states.

Constellation warns that any further conditions from the PSC, such as further rate relief, could negatively impact its credit rating.

"(Constellation) and BGE are on the proverbial 'ratings edge,' " the filing states. "Any unexpected or unreasonable order from this commission could well push the companies over that edge."

Despite Constellation's protests, O'Malley's administration has an ally in the Maryland Office of the People's Counsel, which advocates for ratepayers.

The office's own filing in the case contends many of the supposed benefits of the Constellation deal are selective, speculative and ignore the potential for the interests of BGE and EDF to clash when the companies compete over limited resources.

The "alleged benefits to BGE customers are evanescent, as they are dependent on speculation about a hypothetical event which may or may not occur years from now, i.e. the successful completion and full operation of a new unit at Calvert Cliffs," it states.