Constellation, EDF moving forward with nuclear sale

Constellation Energy and Electricite de France are moving quickly to close their nuclear power deal under conditions imposed by the state Public Service Commission, including a $100 rebate for Baltimore Gas and Electric Co. ratepayers.

Announcements by both companies yesterday will likely mean almost half of Constellation's nuclear assets will be sold to EDF for $4.5 billion, closing another chapter in Maryland's turbulent energy history - at least for now.

"Through its investment in Constellation Energy's nuclear business, EDF has chosen Maryland to be at the center of its growth efforts in the United States," the French company said in a release. "EDF is eager to be a strong corporate citizen in Maryland, and looks forward to moving its U.S. headquarters to the state."

The companies still have until Friday to formally respond to the PSC's conditional approval, which was based on the potential of the deal to impact BGE, the regulated utility arm of Constellation.

In addition to the $100 rebate, which will cost Constellation $110.5 million, the PSC wants BGE to receive a $250 million cash infusion, restrict paying dividends and adopt "ring-fencing" rules to safeguard BGE, such as bankruptcy protection and credit-rating separation.

"We have consulted with our board and received its approval," Constellation officials said in a release. "We are now moving to close the transaction as quickly as possible so that we can begin to deliver the many benefits of this investment to all stakeholders across the state."

During hearings on the proposal, Constellation had contended that the tax revenue collected because of the deal and the increased likelihood of building a third reactor at Calvert Cliffs in Calvert County were enough benefits for consumers. The PSC, however, disagreed.

"We have not ignored the broader value, and thus the public interest, in the good things that the transaction could accomplish for (Constellation) and the state as a whole … ," the PSC wrote in its decision last week. "But the law requires something more, and the transaction as proposed does not deliver it."

The saga of the nuclear deal has gone on for months and included behind-the-scenes negotiations between Constellation and Gov. Martin O'Malley's administration. Energy has been a consistent political problem as legislators deal with increasing prices, limited supply and problems left over from the 1999 decision to deregulate the market.

Although some of the PSC's conditions aligned with what the governor wanted, O'Malley had lobbied for twice the ratepayer rebate offered by the commission as well as some limits on executive compensation. The PSC said salaries were outside its jurisdiction.

Shaun Adamec, a spokesman for the governor, said proceedings such as this typically end with "middle ground" results.

"The governor is pleased that the (PSC) upheld the 'benefit and no harm' portion of the law," he said. "(The rebate) is a whole lot more than it would have been had the people of Maryland not had a government fighting on (their) behalf."