- The Washington Times - Friday, March 28, 2008

ANNAPOLIS — A sweeping settlement between Maryland and Constellation Energy Group Inc. includes rate relief for customers, saves them nuclear decommissioning costs and puts a new nuclear power plant in Maryland back on track, Gov. Martin O’Malley said yesterday.

Under the deal, customers of Baltimore Gas & Electric Co., a Constellation subsidiary, will receive $187 million in one-time “rate rebates” on their electricity bills from the company by the end of the year. That adds up to about $170 for each of BGE’s 1.1 million customers.

Mr. O’Malley said he thinks the agreement will enable the state to move forward more productively with handling energy supply-and-demand concerns in coming years.

“There are big challenges in our future, but I believe that some of the contentious and divisive issues of the past are now behind us with this agreement,” Mr. O’Malley said at a news conference.

The settlement must be approved by the Maryland General Assembly before it adjourns April 7.

“We’ll have a bill out here on the floor and hopefully move forward as expeditiously as possible,” Senate President Thomas V. Mike Miller Jr. told reporters after a morning Senate session.

The deal will end lawsuits filed by both Constellation and the state relating to more than $386 million in energy credits that the General Assembly ordered Constellation to pay in a 2006 special session to address rising energy costs because of deregulation in 1999. The settlement restores all but $40 million of those credits.

The agreement also satisfies consumer liability estimated to be $5.2 billion to decommission the Calvert Cliffs Nuclear Power Plants in Southern Maryland beginning in 2034. According to current estimates, there would have been a $1.5 billion shortfall to pay off the obligation. Ratepayers would have had to pay $33 million for 20 years to take care of the gap.

In return, the state has agreed to change investment laws to give Constellation flexibility to acquire capital. The change will allow up to 20 percent of Constellation stock to be acquired without approval from state regulators.

Mayo A. Shattuck, the chairman, president and chief executive officer of Constellation, described the deal as a “carefully crafted settlement” and “a return to regulatory stability and normalcy.”

“This agreement would provide far-reaching benefits for our customers, our shareholders and the state of Maryland,” Mr. Shattuck said.

Mr. O’Malley said there were no guarantees that the power plant would be built, but he said it makes the prospect “more likely than it was before,” when the company and the state were locked in legal disputes.

Constellation had talked about building the power plant in New York instead, because it thought the regulatory environment in Maryland had become hostile.

The settlement would put to rest a lawsuit earlier this month in federal court in Baltimore by Constellation seeking to end $386 million in energy credits to residential customers that were approved in a June 2006 special legislative session to address rising energy costs. The state had filed a lawsuit days earlier in Baltimore Circuit Court to maintain the credits.

Constellation has been feuding with the state over a 72 percent rate increase that went fully into effect last year as a result of a 1999 agreement to deregulate.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide