Even as Baltimore Gas and Electric Co. seeks to become the nation's first electric utility to re-license its nuclear power plant, its parent is targeting the controversial energy source as a key component of its post-deregulation business strategy to become a major power provider.
To kick off the strategy, Constellation Energy Group plans to acquire additional reactors to expand its nuclear portfolio beyond Calvert Cliffs Nuclear Power Plant and create economies of scale.
Constellation wants to take advantage of bargain prices for nuclear plants as other utilities, which have chosen to focus on transmission rather than power generation, put theirs up for sale, company officials said.
Analysts say the strategy is a sound one. If the company can buy nuclear reactors cheaply enough, it can run them at a profit, said Thomas Hamlin of First Union Securities in Richmond, Va., who has monitored the nuclear business for 20 years.
Prices for nuclear plants "are good, and if a company can maintain strong operations, acquiring nuclear plants should be a positive economic event," he said.
"If there's an opportunity for Constellation Energy to leverage its nuclear asset, they should certainly take a look at it," Hamlin said. "It's expensive to have the infrastructure in place to manage just one nuclear plant."
To prepare for additional nuclear assets, Constellation Energy said, it will shift Calvert Cliffs, a two-reactor nuclear plant in Southern Maryland, to a nonregulated subsidiary, Constellation Nuclear, once Maryland's electric market is deregulated July 1.
The holding company will also include the country's first nuclear power plant re-licensing consulting firm, Constellation Nuclear Services, which began operating in August.
The steps will allow the company to "be not only a strong multifaceted energy company, but to take a strong leadership role in nuclear energy," said Barth W. Doroshuk, president and chief operating officer of Constellation Nuclear Services.
Critics of Constellation Energy said the company is ignoring the safety risks associated with nuclear power in its pursuit of profits.
"What you see here is greed overcoming common sense," said Stephen Kohn, an attorney with the National Whistleblower Center, a citizen advocacy group in Washington that opposes the re-licensing of Calvert Cliffs.
Constellation Energy "wants to buy plants cheaply, keep them running, and usher in a whole new generation of nuclear power," Kohn said.
