- The Washington Times - Thursday, February 7, 2008

BALTIMORE (AP) — Constellation Energy frustrated Maryland regulators yesterday by skipping a hearing to discuss costs passed on to consumers because of deregulation, highlighting a standoff between the state and the utility over increasing energy costs.

The state’s Public Service Commission scheduled the hearing to address Constellation’s complaints about recent commission reports on costs and decommissioning expenses for nuclear power plants at Calvert Cliffs, which were transferred to Constellation under a 1999 settlement.

An order for the hearing specifically required the attendance of Constellation subsidiary Baltimore Gas and Electric Co. (BGE) and “invited” Constellation to attend to answer questions more thoroughly. Deborah Jennings, outside counsel representing BGE, attended but answered questions only on behalf of BGE, not Constellation.

The commission didn’t order Constellation to attend because the company is not a regulated entity in Maryland, said Chairman Steven B. Larsen.

Commissioners frequently were unable to get answers from Mrs. Jennings.

“I think we made it clear what the purpose of the hearing was, and if you all couldn’t answer the questions, then someone from Constellation should be there to answer the questions,” Mr. Larsen told her.

Constellation spokesman Rob Gould, who attended the hearing, said Constellation simply wasn’t directed to be present. He also said BGE was a party to the settlement agreement and was directed to attend.

The commission and Constellation have been at odds during the General Assembly session in Annapolis. Lawmakers and Gov. Martin O’Malley, a Democrat, have discussed stronger regulation on utilities in the wake of a 72 percent rate increase for BGE customers.

Constellation said it plans to sue the state in federal court to recoup $386 million in energy credits that customers received to soften the rate increase. The company also indicated that it is considering the construction of a nuclear power plant in New York, instead of Maryland, because of what it describes as a hostile regulatory climate.

A report on stranded costs and deregulation infuriated Constellation when it was released last month. The commission report found that customers paid $975 million for costs to BGE plants and $491 million to decommission nuclear power plants at Calvert Cliffs, while receiving only $316 million in rate relief from 1999 to 2006, for a net cost of $1.15 billion.

The company said the report is full of errors, ignoring about $2 billion in net customer benefits. Mrs. Jennings also criticized regulators for trying to unravel a deal that lawmakers approved and courts upheld.

Mr. Larsen and other commissioners have concerns that the 1999 settlement failed to accurately reflect the liability of customers to finance the decommissioning of nuclear power plants in 2036. The commission is worried that ratepayers will be responsible for $5 billion when the plants are decommissioned, and is skeptical that a fund designated to pay is adequate.

Mrs. Jennings said she disagreed that the fund for decommissioning would be insufficient.

Mr. Larsen also said he is worried that Constellation holds part of the money for decommissioning without any oversight.

The commission is recommending legislation to the Democrat-controlled Assembly, including oversight over decommissioning funds and the authority to issue subpoenas to, and examine the books, records and personnel of, a public utility in the state.

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