Constellation, EDF agree on nuclear venture terms

Constellation-EDF Nuclear Deal advances with Maryland PSC approval, NRC clearance, BGE customer credit, $250 million investment, and ring-fencing, enabling a third Calvert Cliffs reactor to meet Maryland's future energy demand.

Constellation Energy Group and France's EDF agreed with conditions set by Maryland regulators to move forward with a $4.5 billion joint nuclear venture.

Constellation said it had received approval from its board and that, after talks with MidAmerican Energy earlier in the process, the Baltimore-based company is "now moving to close the transaction as quickly as possible."

EDF is seeking to acquire nearly half of Constellation's nuclear assets. Constellation has said the joint venture with EDF will enable it to build a third reactor at the Calvert Cliffs Nuclear Power Plant in Lusby in southern Maryland to meet future energy demands.

The Maryland Public Service Commission included several conditions to approving the deal in the venture's last regulatory hurdle, while a related FERC stake approval clarified ownership changes earlier in the process. The U.S. Nuclear Regulatory Commission approved the deal last month.

As one of the conditions, the PSC set a one-time, $110.5 million credit for customers of Baltimore Gas and Electric, a subsidiary of Constellation that is regulated by the commission, leaving the company stuck with the ruling as officials noted. The credit will amount to about a $100 break for each BGE customer.

Maryland regulators also are requiring Constellation to invest $250 million in the subsidiary between now and June 30. Another condition requires Constellation to implement measures to create distance with BGE for purposes of bankruptcy protection. That essentially means the measures should ensure neither company is completely dependent upon the other in case of failure. The idea is to financially separate a regulated utility from a non-regulated parent company.

BGE services about than 1.2 million businesses and residential electric customers in Baltimore and central Maryland.

Gov. Martin O'Malley, a Democrat, has been at odds with Constellation over rate increases and executive compensation. The governor initially wanted the credit for BGE customers to be twice as high as the amount set by the PSC. But he described the PSC's conditions as "fair and reasonable" after they were made public.

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