The head of the AFL-CIO is urging Constellation Energy Group not to exercise an option to sell some of its nonnuclear power plants to its French partner, EDF, for up to $2 billion, and "walk away from its investment" in the proposed third nuclear reactor at Calvert Cliffs in Southern Maryland.
In a letter Tuesday to Baltimore-based Constellation chief executive Mayo Shattuck, AFL-CIO president Richard L. Trumka said a move to exercise to the option "will undermine the long-term value of Constellation."
The labor federation's union members are Constellation shareholders through their benefit plans, which own between 7 percent to 10 percent of the Baltimore company's shares, Trumka said.
Constellation and EDF are squabbling over the so-called put option that was part of an EDF deal that bailed Constellation out of a financial crisis two years ago. The option expires Dec. 31.
EDF is tying that option to another dispute involving the two companies' plans for Calvert Cliffs, which was dealt a serious blow when Constellation pulled out of negotiations this month with Obama administration officials over a federal loan guarantee deemed crucial to the project.
EDF offered to buy out Constellation's half-stake in their nuclear development venture, provided that Constellation not exercise the option. Constellation, however, says the matter is a separate issue and counter-offered to sell its stake in the nuclear venture to EDF for $1.
"We strongly share the union's desire to keep Calvert Cliffs 3 moving forward, which is why last Friday we offered to immediately transfer our share of the partnership to EDF for $1 plus prior expenses and pledged our cooperation for a smooth transition," James L. Connaughton, Constellation's executive vice president for corporate affairs, said in a statement. "Our commercial disagreement about the put is a separate matter."
EDF said it is reviewing Constellation's proposal.