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Bill seeks to give PSC power to approve Constellation deal

Maryland lawmakers introduced legislation yesterday that would give the state's chief energy regulator the power to approve Constellation Energy Group's proposed nuclear-power venture with France's largest utility, adding a regulatory hurdle to the deal.

The bill, backed by Gov. Martin O'Malley, clarifies the role of the Public Service Commission, which has launched an investigation into whether Baltimore-based Constellation's deal with Electricite de France would require its approval and has scheduled a March hearing on the matter. Constellation and EDF have said the PSC has no jurisdiction.

O'Malley, in a letter to Constellation Chief Executive Mayo A. Shattuck III, said that ratepayers and lawmakers would benefit from a "full airing and understanding" of the deal and the circumstances that pushed the company to the brink of bankruptcy this fall. He also warned against a legislative battle or court fight over the issue of jurisdiction.

"It is ultimately in [Constellation's] interest to answer these questions, demonstrate how it is proceeding on a path of fiscal responsibility and restore public and regulatory confidence in its operations," the Democratic governor wrote.

Constellation spokesman Rob Gould said the legislation is unnecessary. "There is a process already in place," he said. "It's working, and we continue to cooperate with the commission."

Constellation agreed in December to sell half of its nuclear power business to EDF for $4.5billion, breaking off a takeover agreement with billionaire investor Warren E. Buffett. The EDF deal brings a needed cash influx, said Travis Miller, an analyst at Morningstar Inc.

"Any regulatory roadblocks that come between Constellation and the deal are going to simply delay the positive implications the deal could have for Constellation," he said.

Federal regulators are reviewing the EDF deal, but the role of state regulators had been unclear. Del. Brian K. McHale, a Baltimore Democrat and lead sponsor of the bill, said he wants to make sure consumer interests are protected.


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