September 13, 2009|By Michael J. Wallace
There are few things that would do more to stimulate job growth and increase the competitiveness of Maryland businesses than to increase investment in conservation and new sources of affordable, clean energy that will hasten our transition to a low-carbon economy.
Constellation Energy and Baltimore Gas and Electric (BGE), our utility subsidiary, have introduced Smart Grid technology and other programs aimed at helping customers reduce demand in exchange for significant rebates. These initiatives await state approval, but finishing the job of meeting the region's escalating energy needs will also require massive private investment in new sources of emissions-free generation. And it will require the resources, commitment and expertise of many partners.
EDF Group, the world's largest operator of nuclear plants, is just such a partner.
The nuclear joint venture our two companies have proposed is an essential catalyst for unleashing privately funded energy investment that could far exceed the $4.5 billion value of the transaction. The success of this joint venture - and the potential for a third nuclear unit at Calvert Cliffs - could mark a turning point in the state's efforts to address its most difficult energy and economic challenges.
There is much at stake this week as the Maryland Public Service Commission (PSC) holds a public hearing in Baltimore to review EDF's proposed investment in half of Constellation Energy's nuclear assets. Many Maryland leaders strongly support our efforts to grow jobs and expand investment in conservation and emissions-free nuclear energy.
Our proposed joint venture is focused on long-term investments that could serve a generation of Marylanders. Unfortunately, some of our critics remain focused on extracting short-term subsidies that would be of marginal value to consumers. We fully support appropriate measures, if necessary, to ensure protection of BGE's customers. But the pursuit of onerous demands jeopardizes this transaction, as well as the considerable benefits it promises for Maryland.
This transaction is crucial if we are to continue moving forward with a proposed 1,600-megawatt nuclear plant at Calvert Cliffs. This new plant would supply roughly 1.3 million homes with emissions-free power that will be made even more affordable if, as is expected, Congress passes climate change legislation.
The addition of a nuclear plant would have the added benefit of increasing grid reliability and significantly boosting Maryland's energy supply, helping to mitigate the state's continued dependence on imported electricity. Basic principles of economics suggest that when supply is increased, prices will fall.
This joint venture also means more jobs and tax revenue for the state. In the short term, the transaction will produce a $130 million tax payment to Maryland, preserving government jobs and services that are in high demand during these difficult economic times.
In the long term, the proposed Calvert Cliffs nuclear plant would be one of the largest industrial projects in state history, creating approximately 4,000 skilled jobs during a construction phase that will last several years. The completed plant would employ about 400 operators for decades to come.
But this transaction is about more than just one nuclear plant. Through our existing partnership in UniStar Nuclear, EDF and Constellation Energy have proposed to make Calvert Cliffs the first in a fleet of new nuclear plants built nationwide, helping to power a nuclear renaissance.
EDF would move its North American headquarters to Maryland as part of the joint venture, adding the world's largest nuclear operator to a list of government agencies, educational institutions and major nuclear design and engineering firms that already call Maryland home.
These firms and institutions will become an economic engine for the state as the industry prepares to build the next generation of advanced nuclear plants.
The conversion to a low-carbon economy will require investment on multiple fronts, creating both challenges and opportunities. To deny or impose unreasonable conditions on EDF's proposed investment in Maryland risks leaving these challenges unmet and opportunities unfulfilled.
Michael J. Wallace is vice chairman and chief operating officer of Constellation Energy. His e-mail is mjw@constellation.com.
