But the bidding took place just as electricity and other energy prices were gyrating in the wake of Hurricanes Katrina and Rita. Those storms damaged oil and natural gas production in the Gulf of Mexico, causing prices to soar.
Larsen said that while Constellation's decision to buy energy at a time when rates had risen substantially after Hurricane Katrina was "inadvisable," the commission did not find any wrongdoing.
He added that the settlement between Constellation and the state doesn't preclude the commission's continuing oversight of the auction process or its ability to change it.
The PSC had engaged the law firm Kaye Scholer to analyze whether the commission had any cause of action against Constellation related to their participation in the auctions.
In an executive summary of the report, the firm said the auctions were competitive, and that the prices reflected those for comparable products in the wholesale markets.
The law firm found that while Constellation and BGE share some key personnel, the dual role of these employees do not violate state regulations.
Risk officer
PSC members had raised questions about John Collins, Constellation's chief risk officer at the time of the auctions. Collins not only helped Constellation sell electricity to utilities; he advised BGE on buying electricity from Constellation and other wholesalers and got to see bids from Constellation's competitors.
Larsen said yesterday that the commission would continue to review regulations concerning whether there is appropriate separation between utilities and their affiliates, though he said that examination would be industrywide and not targeted at Constellation.
On settlement
Larsen appeared at a hearing yesterday before the Senate Finance Committee to testify on legislation that would implement the state's settlement with Constellation.
Sen. Rob Garagiola, a Montgomery County Democrat on the committee, said the settlement gives much-needed "closure" to a number of outstanding issues, including the auction inquiry.
"A lot of energy has been expended looking backward, and that needed to be done, but we need to start looking forward with respect to where Maryland goes from here," he said.
laura.smitherman@baltsun.com
