Constellation earns 13% less in quarter; Decline described as part of transition to electricity market; Energy industry


Constellation Energy Group, the parent of Baltimore Gas and Electric Co., reported yesterday that its first-quarter earnings dipped 13 percent below the first period last year -- a necessary part of the company's transition to a competitive electricity market in Maryland, the company's chairman said.

Christian H. Poindexter, Constellation's chairman, president and chief executive, attributed the slide partly to power plant depreciation related to BGE's deregulation settlement agreement with the Maryland Public Service Commission, as well as expenses related to an early retirement plan offered to some workers.

Maryland will open its electricity market to competition July 1.

In the quarter that ended March 31, the company generated earnings of $72.1 million, or 48 cents per share, compared with $82.8 million, or 55 cents per share, in the first period in 1999. Revenue in the quarter rose less than 1 percent to $992.2 million.

"We are working hard on all fronts to ensure we continue to build shareholder value as we navigate through deregulation," Poindexter said during the company's annual meeting at its downtown headquarters.

"Much of the uncertainty is now behind us, and we have been moving forward in pursuit of our goals" to become a national power provider, he said.

Planned moves include beefing up the company's wholesale energy business, building power plants around the country and leaving the energy market in Latin America.

For next year, the first full calendar year of electricity competition in Maryland, Constellation expects that BGE will contribute about one-third of the company's earnings, and the rest will come from nonregulated businesses such as Constellation Power Source, its wholesale marketing business, Poindexter said.

To further grow CPS, which began operating in 1997, Constellation is about to enter "the biggest power plant construction program in the history of this company," Poindexter said.

The company has placed orders for almost a dozen gas-fired power plants producing about 5,100 megawatts energy in states including Florida, Illinois and Texas. Some of those plants will begin operating in summer 2001.

Yesterday, Constellation's shares closed at $33.0625, down 87.5 cents. The company hit its 52-week high of $35.6875 on Wednesday.

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