In a blow to Constellation Energy Group, a judge dismissed Thursday the company's lawsuit challenging the authority of Maryland regulators to investigate its deal to sell half its nuclear power business to a French utility.
The ruling means Constellation has little choice but to proceed with the regulatory review of its $4.5 billion transaction with Electricite de France, a regulatory hurdle that the utility had hoped to avoid and had argued was not required under state law.
In a statement, Constellation expressed disappointment with the judge's decision and said it would review its legal options.
The legal battle stemmed from the Maryland Public Service Commission's ruling last month that Constellation's deal must be in the public interest to go forward, thereby requiring the panel's approval. Constellation, the parent of Baltimore Gas and Electric Co., the region's largest utility, filed a lawsuit seeking to overturn the PSC ruling.
In granting the state's motion to dismiss the lawsuit, Baltimore Circuit Judge Stuart R. Berger did not rule on the merits of Constellation's argument. Instead, Berger held that the court lacks jurisdiction at this time to grant Constellation judicial review of a regulatory decision.
The PSC's decision to investigate the deal does not constitute a final order, which would have entitled the party to an appeal, according to the judge's order. And the judge noted that Constellation is participating in the review process.
Meanwhile, negotiations between Gov. Martin O'Malley and Constellation over a potential settlement have stalled in recent weeks.
The sides had been holding behind-the-scenes discussions while the regulatory process was under way, with the governor seeking rate relief and other concessions.
O'Malley has sharply criticized the company's compensation package for Chief Executive Mayo A. Shattuck III, particularly a potential $87 million golden parachute. (The EDF deal would not trigger the payment, and Constellation officials say Shattuck would not receive any money because of the transaction.)
O'Malley said Thursday that the state remains "focused on the goal we have held throughout these proceedings: a thorough review of this proposed transaction by professional regulators to ensure that the transaction is consistent with the public interest and adequately protects ratepayers."
