Constellation Energy Working Toward Comprehensive Settlement With Political and Regulatory Leaders in Maryland
       By: Constellation Energy
Posted: 2008-03-27 06:53:16
Constellation Energy (NYSE: CEG) today confirmed that it is working with Maryland political and regulatory leaders on the terms of a comprehensive settlement of prior legal, regulatory and legislative issues. Under discussion is a broad settlement that includes a number of financial and regulatory agreements. The settlement includes terms that are contingent upon passage of legislation by the Maryland General Assembly during its current session, which ends April 7, 2008.

"This agreement would provide far-reaching benefits for our customers, our shareholders and the State of Maryland," said Mayo A. Shattuck, chairman, president and chief executive officer, Constellation Energy. "All parties gain meaningful benefits in this carefully crafted settlement, and the overarching value is a return to regulatory stability and normalcy. This settlement will allow our company and all Maryland stakeholders to move forward confidently on the many energy-related challenges and opportunities that lie ahead, including the potential for a new nuclear unit at our Calvert Cliffs Nuclear Power Plant."

Pending signing of the settlement agreement and subsequent legislative action by the Maryland General Assembly, the parties would agree to dismiss pending state and federal litigation.

Certain terms of the tentative agreement under discussion include:

-- Reaffirmation by the State of Maryland of the 1999 settlement and dismissal of all ongoing PSC proceedings related to the 1999 settlement and other investigations.

-- One-time bill credit to BGE residential customers ($170 per customer), totaling $187 million.

-- Elimination of BGE ratepayer liability for decommissioning Calvert Cliffs Nuclear Power Plant in Southern Maryland.

-- Restoration of 90 percent of Senate Bill 1 credits (enacted into law during the 2006 Special Session of the Maryland Legislature) and settlement of lawsuits related to the 1999 settlement agreement ($346 million of original $386 million).

-- All things being equal, Constellation Energy will work to develop a new nuclear power plant at its Calvert Cliffs site before development at any other site it controls.

-- Modernization of Maryland's laws (PUC, Sections 6-101, 6-105) governing investment in holding companies of gas and electric utilities.

-- Strengthened PSC oversight capability through codification of federal authority to examine the books and records of any Maryland electric utility and its affiliates.

-- Enhanced corporate governance of BGE through the addition of two independent directors to the BGE Board.

-- Phase-in of future BGE Electric Distribution Rate Changes and early implementation by BGE of accelerated depreciation accrual methodology as recommended by PSC Staff in case 9096.

Constellation Energy (http://www.constellation.com), a FORTUNE 125 company with 2007 revenues of $21 billion, is the nation's largest competitive supplier of electricity to large commercial and industrial customers and the nation's largest wholesale power seller. Constellation Energy also manages fuels and energy services on behalf of energy-intensive industries and utilities. It owns a diversified fleet of 78 generating units located throughout the United States, totaling approximately 8,700 megawatts of generating capacity. The company delivers electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland.
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