Gov. Martin O'Malley plans to announce today a settlement with Constellation Energy Group, ending a bitter battle between the state and BGE's parent company and securing $187 million in one-time rebates for more than 1 million residential customers, according to state officials who have been briefed on the agreement.
The rebates would amount to $170 per customer and be applied to bills by the end of the year.
The settlement emerged out of dueling lawsuits filed by the state and Constellation Energy last month over credits to consumers that the General Assembly ordered in 2006. Animosity between state officials and the company has been brewing in recent years as many lawmakers have come to believe that the state's 1999 deregulation settlement was a raw deal for consumers.
The governor briefed Senate President Thomas V. Mike Miller, House Speaker Michael E. Busch and other top lawmakers last night on details of the settlement. The deal is contingent on legislative approval and would mean that both sides would drop their lawsuits. Rick Abbruzzese, O'Malley's spokesman, declined to comment on the settlement but confirmed that the governor is expected to make an announcement today.
"I believe it's a good settlement for BGE ratepayers," said Del. Dereck E. Davis, a Prince George's County Democrat and chairman of the House Economic Matters Committee. "Hopefully, with this agreement we're able to move forward in our quest to provide reliable and affordable electricity."
Busch spokeswoman Alexandra Hughes said the speaker is "pleased we've come to a point where we can help the ratepayers of Maryland without a protracted fight with Constellation."
Constellation spokesman Robert L. Gould would not confirm or discuss details of the agreement. "We continue to hold discussions with the state in an effort to resolve the issues related to our respective pending litigation," he said.
The settlement could give Constellation some assurances that the regulatory environment in Maryland will improve for the company. Under the settlement, the company also gets expanded flexibility in drawing investors who would be allowed to own up to 20 percent of the stock. There are currently restrictions on investments in the company under state law.
Constellation's clashes with state officials have taken on added significance as consumers have seen double-digit electric rate increases in the last few years. O'Malley, a Democrat, campaigned on promises to tackle soaring electric bills, but his efforts through the Public Service Commission have been stymied by the complexities of energy markets and state laws.
