BGE Commercial Building Systems said yesterday that it has won a $10 million, two-year contract to provide electricity to Rouse Co.'s Maryland malls and its headquarters in Columbia.
Under the state's deregulation plan, a price freeze that had been in effect for two years ends July 1 and nonresidential energy customers must select a new supplier - or stay with Baltimore Gas and Electric Co. and pay unstable spot-market prices.
BGE Commercial Building Systems and Baltimore Gas and Electric Co. are both part of Baltimore-based Constellation Energy Group.
"It means a lot to us as BGE Commercial Building Systems, and it's a safe inference in saying it is keeping [Rouse] in the Constellation Energy Group family," said Ralph Stingo, chief operating officer of BGE Commercial Building Systems.
BGE said Rouse is the largest private-sector entity to choose an alternate energy provider in light of the July 1 deadline. The Commercial Buildings Systems division will provide Rouse consulting services - such as how to boost efficiencies - as well as provide the actual electricity.
"If you look at its properties and Rouse's headquarters, it is a premier customer regardless of what kind of services you sell," said Catherine Davenport, vice president of marketing for BGE Commercial. "Getting the Rouse account is definitely important from [our] perspective."
The contract will provide electricity to Owings Mills Mall; White Marsh Mall; The Mall in Columbia; Harborplace; The Gallery at Harborplace; The Village of Cross Keys; Mondawmin Mall and the adjoining Metro Plaza.
A much larger energy contract was recently awarded to Pepco Energy Services when it won a two-year $65 million pact to supply electricity to the Camden Yards sports complex and Maryland state agencies and departments. BGE Commercial Building Systems did not bid on that deal because it was still putting together its business model, Stingo said.
In October Constellation abandoned a yearlong initiative to split into two separate companies. Since then new leadership has been working to fuse the company back together.
The Rouse deal is "probably largely a wash," said Andre Meade, an energy analyst with Commerzbank Securities in New York. "But it's a good thing that they are retaining a customer within the company, so it's definitely positive news."
Andy Tilmont, director of operations administration for Rouse, said the real estate firm did not put out a formal request for proposals but researched other utilities' prices. He also said the state does not have a glut of providers bidding for contracts.
"I think Maryland has some very good rates and I think as the deadline [to switch] gets closer there may be more choices, but I'd say there's a limited amount now," Tilmont said. "We were mindful of the deadline we had looming in July of this year and [the BGE unit] provided us with the price we needed." Shares of Constellation closed yesterday at $28.75, up 42 cents.