- The Washington Times - Wednesday, April 25, 2007

From combined dispatches

Constellation Energy Group Inc., the largest U.S. power marketer, said first-quarter profit jumped 72 percent after electricity prices increased.

Net income climbed to $195.7 million ($1.07 a share) from $113.9 million (63 cents) a year earlier, the Baltimore company said yesterday. Revenue rose 4 percent to $5.06 billion.

Chief Executive Officer Mayo Shattuck, 52, expanded Constellation’s wholesale power and gas business after FPL Group Inc. abandoned its planned takeover of the company in October. New supply contracts locked in wider profit margins for power plants in Maryland and other Mid-Atlantic states.

“They benefited from higher electricity prices as previously regulated rates rolled off in several states,” said Gene Pisasale, who helps manage $25 billion, including Constellation shares, for Mercantile Capital Advisors in Baltimore, a unit of PNC Bank. “January weather in the Northeast was brutal, and that helped as well.”

Constellation, which owns Baltimore Gas and Electric Co., left unchanged its full-year profit forecast of $4.30 to $4.65 a share and said it expects earnings per share of 55 cents to 75 cents in the current quarter.

First-quarter profit at flagship utility BGE fell to 36 cents a share from 38 cents as costs rose, Constellation said.

However, electricity revenue for BGE rose nearly 20 percent to $298.9 million. It currently is not allowed to charge market rates because of a political uproar last year when the utility asked to raise rates 72 percent as legislated price caps were scheduled to come off. Residential electricity distribution was up nearly 10 percent in the quarter.

A spokesman for Constellation did not return calls for comment.

BGE has proposed a 50 percent increase starting June 1 to begin charging market prices for electricity. The utility is proposing giving customers the option to split the rate increase, paying half starting in June and the other half with interest starting in January.

Excluding such items as earnings from synthetic fuel, per-share profit in the first quarter rose to $1.03 from 61 cents a year earlier, Constellation said. The company was expected to earn 94 cents, the average of six analyst estimates compiled by Bloomberg.

Net income from generation and sale of energy on wholesale markets and to retail customers in states that allow Constellation to compete with local utilities rose to 67 cents a share from 17 cents as prices increased faster than expenses. Costs to buy energy to meet sales obligations rose 1 percent from a year earlier to $3.96 billion, Constellation said.

Output from Constellation’s nuclear power plants rose 2 percent to 7.1 million megawatt-hours after the company sold six plants that burn natural gas, a more expensive generator fuel, for $1.64 billion in December. Nuclear plants accounted for 57 percent of output in the first quarter, up from 49 percent a year earlier, and power generated from gas fell to 2.4 percent from 15 percent.

Nuclear plants generated electricity for as little as $18 per megawatt-hour, or more than 60 percent less than the cost for the most efficient gas-fueled plants, according to Ian Synnott, a fuel analyst at Natexis Bleichroeder in London.

Shares of Constellation rose 46 cents to $93.11 on the New York Stock Exchange yesterday. The stock has jumped 35 percent this year.

• Kara Rowland contributed to this report.


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