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Md. tentatively backs Constellation deal with French firm

The move is designed to lead to a third reactor at Calvert Cliffs.
The move is designed to lead to a third reactor at Calvert Cliffs. (Mark Gail/the Washington Post)
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By Aaron C. Davis and Christy Goodman
Washington Post Staff Writer
Saturday, October 31, 2009

Regulators appointed by Maryland Gov. Martin O'Malley announced Friday that they have offered conditional approval to let Constellation Energy Group sell nearly half its nuclear assets, including those in Calvert County, to French energy giant EDF in a move designed to lead to construction of the first new commercial nuclear reactor project in the United States in more than three decades.

The Public Service Commission got involved in the approval process this year, saying it had the right to determine whether the $4.5 billion-dollar venture would benefit customers of Constellation subsidiary Baltimore Gas and Electric.

On Friday, the commission said the sale could be a good deal for Maryland if the companies agreed to offer rebates of about $100 for each BGE ratepayer and to provide a cash infusion and other aid to help the utility and insulate it from potential problems related to the deal.

Constellation and EDF have one week to agree to the conditions. Constellation issued a statement saying it was reviewing the decision with EDF. The U.S. Nuclear Regulatory Commission approved the deal this month.

The company's new nuclear reactor would be its third at Calvert Cliffs Nuclear Power Plant in Lusby. Under Friday's ruling, the two companies are not required to build the reactor, but they have indicated they intend to.

By mandating the one-time rebate and other measures, the PSC's ruling amounts to a minor victory for O'Malley (D) that lawmakers on both sides of the aisle predicted would find its way into O'Malley's reelection campaign next year -- even though the governor had sought much broader concessions from Constellation in negotiations that broke down last week.

O'Malley, who had referred to Constellation executives as the greedy "country club set" in recent weeks, attempted to strike a more conciliatory tone Friday, saying he was "looking forward to moving forward" with the two companies in a cooperative way.

Still, he said "it's always a victory when we're able to make our government work in such a way that consumers get a better and fairer shake."

Del. Dereck E. Davis (D-Prince George's), chairman of a House committee that handles energy matters, said O'Malley could "claim it as a win." But he also said he was concerned about the governor's focus on helping BGE customers when residents elsewhere in the state pay similar, if not higher utility rates, and that the language of the commission's decision seemed overly opinionated.

Del. Anthony J. O'Donnell (R-Calvert), the House minority leader, went further.

"It was pure politics," he said, accusing O'Malley of using the commission's approval process to wrest rebates simply to fulfill campaign promises.

The governor's pledges to provide long-term rate relief to BGE customers have followed him since he took office. BGE serves 1.1 million people in central Maryland, including small parts of Prince George's and Montgomery counties.

Senate President Thomas V. Mike Miller Jr. (D-Calvert) said he hopes the cost of the concessions does not scuttle the deal, noting the construction of the third reactor is expected to create construction work for thousands and 500 permanent jobs.

Sen. James C. Rosapepe (D-Prince George's) said the PSC's failure to impose long-term rate reductions will add fuel to efforts reregulate energy when the General Assembly reconvenes in January.

Staff researcher Meg Smith also contributed to this report.


© 2009 The Washington Post Company

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