December 21, 2008

EDF buyout may put taxpayers on the hook

If Electricite de France rescues Constellation Energy, who will rescue EDF?

Among the details of the deal intended to rescue Constellation and usher in the nuclear renaissance EDF has in mind that The Baltimore Sun failed to mention is how EDF and Constellation plan to finance the revival of the nuclear industry. ("French firm EDF charts future in Maryland" Dec. 18).

Financing for the $10 billion French-designed reactors EDF plans to build at Calvert Cliffs and several other sites hinges on taxpayer-backed loan guarantees.

Loan guarantees are promises that U.S. taxpayers will pay back the loans if the project fails - and the risk of loan defaults is extraordinarily high.

The Congressional Budget Office estimates that 50 percent of all new reactor projects are likely to default.

Both the French state-controlled EDF and Unistar, its subsidiary that is conducting a joint venture with Constellation, have noted that 80 percent of the cost of their proposed new nuclear reactors will be guaranteed by American taxpayers.

If these projects fail, taxpayers will be on the hook for billions.

Another bailout by U.S. taxpayers? Non, merci.

Allison Fisher, Washington

The writer is an energy organizer for Public Citizen.

Constellation CEO has outlasted welcome

Warren Buffett will receive $1.05 billion for his role in the recent Constellation Energy fiasco. But why hasn't Constellation CEO Mayo A. Shatuck III been fired? ("Biggest winner in Constellation deal is Buffett," Dec. 18).

As a Constellation Energy stockholder, I would vote for Mr. Shattuck's ouster, if I could, and let him join the 800 other company employees recently laid off.

Critics were quick to chastise Mr. Shattuck and others for the payoff to Mr. Buffett, and for the company's speculation in commodities that got it into big trouble in the first place.

State Del. Patrick L. McDonough calls the company's payments to Mr. Buffett, "egregious and damaging to the future operation of the company" ("About-face," Dec. 18).

Constellation shares dropped to $23, the Moody's bond-rating agency downgraded its credit rating, and the company has announced that its stock dividend will be cut in half.

Jonathan W. Thayer is Constellation's new chief financial officer.

Why can't we have a new CEO as well?

David Boyd, White Hall

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.