Ongoing battles between state officials and Constellation Energy Group escalated again Thursday when Maryland regulators ordered a review of the company's deal with a French utility and Constellation quickly countered with a lawsuit.
The Public Service Commission, the state's top energy regulator, determined that Constellation's $4.5 billion deal to sell half its nuclear power assets to Electricite de France must be in the public's interest. The order adds a regulatory hurdle to completing the transaction, which the company had hoped to do by October.
Constellation, which owns Baltimore Gas and Electric Co., responded within an hour by suing in Baltimore Circuit Court. Company executives contend the state is turning its back on an agreement enshrined in law and meant to smooth the regulatory path for certain business deals, and warned that delays could imperil a planned nuclear project that would create jobs and help avert a power supply crunch.
Meanwhile, the impasse might prompt Gov. Martin O'Malley and Constellation to return to the negotiating table after talks over a potential settlement apparently stalled in recent days. The two sides have been holding behind-the-scenes discussions while the PSC case was under way, with the Democratic governor seeking rate relief and other concessions.
Michael R. Enright, O'Malley's chief of staff, said in a letter Thursday to a Constellation executive that the talks have been "consistently inconsistent" and that it appeared the company's interest in a settlement "cooled considerably" once state officials expressed "grave reservations" about a potential $87 million payout to Constellation Chief Executive Mayo A. Shattuck III.
Constellation executives have said the so-called golden parachute would not be triggered by the EDF deal and that Shattuck would not receive any money because of the transaction. Executives have suggested that state officials' questions about Shattuck's compensation amount to meddling in the private sector.
The O'Malley administration has laid out an extensive settlement proposal that could cost Constellation hundreds of millions of dollars, including one-time credits for residential customers equal to a roughly 10 percent reduction in their yearly bill and a pledge to contribute about $20 million a year to a program that helps low-income residents pay utility bills.
