State utility regulators ordered lawyers for Constellation Energy Group yesterday to appear at a hearing Tuesday to discuss disputed terms of a 1999 deal to open Maryland's power market to competition.
The order comes after Constellation frustrated the Maryland Public Service Commission by not appearing at a similar hearing Feb. 6. That hearing was called after Constellation and its utility subsidiary, Baltimore Gas and Electric, criticized the commission for what executives claimed was a faulty analysis of the deregulation deal.
Lawyers for BGE appeared at the hearing as ordered, but were unable to answer the commission's questions pertaining to Constellation. Constellation, which agreed to appear next week along with BGE, said it stayed away from the earlier proceeding because the order calling for the hearing was directed at BGE.
The incident deepened a rift stemming from a consultants' report claiming the 1999 deregulation settlement burdened BGE ratepayers with more than $1 billion in costs in exchange for rate cuts amounting to about a fifth of that amount. The settlement was reached after legislation deregulating the power industry was passed in 1999.
The report, which was ordered by the General Assembly last year, also raised questions about Constellation's handling of so-called "stranded cost" payments and nuclear decommissioning fees paid by ratepayers. Constellation executives called the report "revisionist history," and claimed it was full of errors.
After the Feb. 6 hearing, Constellation agreed to answer a series of written questions from the commission - mostly pertaining to the decommissioning payments. Nuclear decommissioning fees are collected from ratepayers to pay for the future dismantling of Constellation's Calvert Cliffs nuclear plant in Lusby.
The first of Constellation's responses was delivered this week, prompting the commission to call for a hearing to discuss the company's answers.
"It became immediately apparent that for this to be productive, we would have to be in a position to ask them questions in person," said Steven B. Larsen, PSC chairman.
Constellation said it is cooperating with the commission in its quest for answers.
"We plan to address the complete and comprehensive responses that we already provided the commission at its request regarding the 1999 deregulation legislation," Rob Gould, a Constellation spokesman, wrote in an e-mailed statement. "Constellation Energy has fully complied with the spirit and letter of that legislation and associated multiparty settlement."
The commission has raised concerns about Constellation's handling of nuclear decommissioning funds. There is also some dispute over whether ratepayers are paying too much or too little for dismantling Calvert Cliffs - a process that could cost up to $5 billion when the plant's license expires.
Constellation has said it is in compliance with Nuclear Regulatory Commission requirements. The NRC is charged with making sure plant operators maintain proper funds for decommissioning.