Warren Buffett has agreed to pay $4.7 billion for Baltimore's Constellation Energy Group.
He'll have to put up much more if he really wants it. To Constellation shareholders? Sure, that's possible. But also to customers of Baltimore Gas & Electric, Baltimore charities and probably a few others. And even that might not be enough.
At stake is the fate of Baltimore's only Fortune 500 corporate headquarters and the electric and gas infrastructure that powers metro Baltimore's economy.
Two weeks ago the Maryland Public Service Commission made it astonishingly clear that it will look at every potential reason to reject or substantially alter Buffett's deal.
He already faces the chance that Constellation shareholders will turn down his offer of $26.50 per share when they vote Dec. 23. Even if they say "yes," however, Maryland regulators are starting to look like an even bigger hurdle.
Not only will the commission consider the interests of BGE customers, as usual. It'll also weigh whether the sale of BGE parent Constellation to Buffett's MidAmerican Energy Holdings benefits metro Baltimore generally. It'll check the impact on Constellation employees. It'll look at the effect on the wider electric grid.
It'll launch "a thorough investigation that errs on the side of inclusion," as stated in its recent filing that describes how it plans to examine the deal.
No mention of what happens to the pigeons on BGE's wires, but I might have missed something.
Even normally the commission is a tough sell, along with the Maryland legislature standing behind it. Twice before they switched off Constellation merger deals.
The first was in 1997, when Constellation and Potomac Electric Power Co. canceled a marriage after the PSC insisted they pass along most merger savings to customers. The second was two years ago, when Constellation and FPL Group called it quits amid legislative attacks on the PSC and anger over soaring electricity prices.
This commission, appointed primarily by Democratic Gov. Martin O'Malley to compensate for what was perceived as a pro-industry slant under former Republican Gov. Robert L. Ehrlich Jr., looks more activist than its predecessors.
And Buffett has offered nothing to placate it.
MidAmerican has agreed to delay a measly BGE rate increase, continue giving a few million a year to local charity, finance capital upgrades and not lay anybody off at BGE.
