BGE unit, Rouse reach national services pact

Utility to supply energy advice for developer's projects


April 09, 1999|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

The Rouse Co. and a Baltimore Gas and Electric Co. subsidiary announced a pact under yesterday which the utility will supply energy-related services to the Columbia-based real estate concern's projects nationwide.

The Constellation Energy Source Inc. contract dovetails with BGE's efforts to lock up its largest industrial and commercial users as the energy industry embraces deregulation and competition.

Maryland is expected to open utility competition for commercial consumers in 2001.

The three-year contract could ultimately save Rouse -- and its tenants -- hundreds of thousands of dollars per year. The real estate investment trust spends about $80 million annually for electricity and natural gas.

"As energy portfolio manager, we'll be working closely with Rouse to help them benefit from the rapidly evolving energy business," said Diane Featherstone, president of Constellation Energy Source.

Constellation's deal with Rouse follows similar contracts between BGE and large commercial and industrial customers, such as Bethlehem Steel Corp., which use the most power and which will be the most attracted by other power companies.

Unlike Bethlehem Steel, though, Constellation will not provide electricity to Rouse.

Constellation's compensation will include a base fee and incentives based on the amount of work performed, said Eric C. Buckner, director of administration for Rouse's retail division.

In addition to advice and research on deregulation, Constellation will provide engineering work and assist in negotiating energy contracts with other utilities for Rouse. The BGE subsidiary also will assist in negotiations on natural gas contracts on the REIT's behalf.

"This will allow them to be a little more intelligent in terms of their energy procurement," said Scott McWilliams, Constellation's director of marketing and energy sales.

Initially, Constellation will audit energy use in Rouse's projects in Maryland, New Jersey, New York and Pennsylvania, which account for roughly half of the company's annual energy use.

The contract also allows for Rouse to expand the energy program with Constellation to include other states and projects, McWilliams said.

In all, Rouse owns or manages more than 250 retail, office and other projects in 23 states and Canada, including Towson Town Center, the Mall in Columbia and Harborplace.

Its properties are valued at $4.7 billion.

"Our tenants and shareholders should ultimately benefit from programs such as this," said Anthony W. Deering, Rouse's chairman and chief executive.

Pub Date: 4/09/99

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