It would be foolish to give an instant thumbs up or down on the proposed settlement announced last week between the state and Constellation Energy Group over the 1999 deregulation deal. Cursory analysis is what got ratepayers in trouble nine years ago. The proposal has far-reaching ramifications, and lawmakers will need to closely scrutinize all of it in the days ahead.
But it's hard not to applaud several key elements of the arrangement that have obvious benefits to consumers - not the least of which is the one-time $170 credit that would be doled out to Baltimore Gas and Electric Co.'s 1.1 million customers at a cost of $187 million to the company.
The biggest payback, however, would be to remove any further liability for the future decommissioning costs of the Calvert Cliffs nuclear power plant from ratepayers once and for all. That's a potential $1.5 billion savings and possibly even more.
Constellation is not exactly a loser in this deal. It would be obligated for $40 million less in rate relief than was previously required. That seems reasonable given the company's other concessions, including a capped phase-in of anticipated higher distribution rates (to cover the cost of maintaining electrical lines and other equipment).
There are also elements that give us pause, such as the requirement that the Maryland Public Service Commission end investigations into the 1999 settlement. But this, too, may be justified. The PSC never alleged Constellation engaged in any wrongdoing, only that deregulation proved far too lopsided in the company's favor and that the complex deal was insufficiently vetted.
Indeed, if there is a lesson to take away from this episode, it's the need for a more vigilant and assertive PSC. Legislators can debate the settlement's sufficiency, but there's no question that PSC Chairman Steven B. Larsen has given the agency new teeth.
That benefits not only ratepayers but probably Constellation as well - at least if it means that the 1999 settlement can be put in the past. Maryland must now focus on future needs, addressing the rising cost of energy and ensuring an adequate supply.
A proposed expansion at Calvert Cliffs is going to cost billions of dollars, but the benefits for the state and the company could prove enormous. It will be much easier for all involved to proceed without a 9-year-old albatross around the neck - and knowing that competent (and skeptical) state regulators are watching out for the public every step of the way.