Constellation Energy, EDF complete deal for Calvert reactor
Sunday, November 8, 2009
The boards of Constellation Energy and EDF on Friday completed a $4.5 billion transaction, securing a future for the proposed third reactor at Calvert Cliffs Nuclear Plant.
The Maryland Public Service Commission's Oct. 30 decision was the last of state and federal hurdles needed to complete EDF's $4.5 billion investment to own about 49 percent of Constellation Energy's existing nuclear facilities. The approval came with several conditions, including a rebate of about $100 to each customer of Baltimore Gas and Electric, a Constellation subsidiary, this winter.
Constellation executives repeatedly said during the commission hearing process that the third reactor at Calvert Cliffs could not be built without EDF's investment.
"We are pleased that the Maryland Public Service Commission concluded the Constellation Energy-EDF nuclear joint venture is in the public interest and represents an important element in Maryland's energy future," Constellation said in a statement. "We are now moving to close the transaction as quickly as possible so that we can begin to deliver the many benefits of this investment to all stakeholders across the state."
Constellation and EDF have been partnering with UniStar Nuclear Energy, which focuses on building nuclear facilities, including the proposed third reactor at the Lusby plant.
An EDF statement said the commission's terms are "designed to preserve the independence and financial strength" of BGE.
The commission is requiring a cash infusion from Constellation and some separation of BGE from its parent company to prevent the electricity company from facing bankruptcy and credit rating issues.
Constellation's "real-life near-death experience in September 2008 demonstrated all too vividly how vulnerable BGE is if, and when, things go badly" for Constellation, the commission's decision reads.
Pierre Gadonneix, EDF chairman and chief executive, said in a statement that the French nuclear giant "is eager to enhance its presence in the United States."
Company officials said Maryland will serve as the company's U.S. headquarters.