Constellation Energy Group said yesterday that it will sue the state to recover $386 million in credits it was forced to give utility customers, potentially adding about $3 a month to the average homeowner's bill.
The credits, which the company says are unconstitutional, were part of legislation passed in 2006 to ease a 72 percent rate increase for customers of Constellation's utility subsidiary, Baltimore Gas & Electric.
Company officials said the lawsuit was prompted by an intensifying feud with state utility regulators over disputed terms of a 1999 settlement with BGE to move Maryland toward deregulation.
The Baltimore-based energy conglomerate accused the Public Service Commission of politicizing the issue and jeopardizing the company's commitment to investing billions of dollars in energy infrastructure in Maryland. The remarks came a day after Constellation indicated that it might build its first new nuclear reactor in New York instead of Maryland because of regulators' hostile tone.
Gov. Martin O'Malley and other lawmakers vowed yesterday to work with Constellation, but they called the company's threats unproductive. And while the state's top regulator defended the PSC's analysis of the 1999 settlement, he scheduled a hearing next week so BGE could rebut the panel's claims.
The disputed credits are the only significant financial concession that lawmakers extracted from the company after a lengthy political debate over utility costs in the aftermath of the BGE rate increase. The money is earmarked to pay for future costs to decommission two nuclear reactors at Calvert Cliffs in Lusby.
The decommissioning fees factor into a recent PSC report to lawmakers that concludes that the 1999 deregulation deal was lopsided in favor of Constellation, and was not in the "public interest." It suggests that lawmakers might want to revisit aspects of the agreement with an eye toward winning rebates and other protections for ratepayers. Lawmakers have not taken up the issue.
Constellation's chief executive said the harsh tone of the report is proof that the PSC is no longer a fair arbiter. The company released a detailed rebuttal of the report's conclusions yesterday as part of its quarterly earnings release and presentation to industry analysts.
