Constellation Energy Group and its nuclear joint venture partner, Electricite de France, announced Monday that they will move quickly to close their $4.5 billion nuclear joint venture, though the deal leaves some unanswered questions.
Among them: when each of Constellation's Baltimore Gas and Electric residential customers will receive a one-time $100 credit, one of several conditions imposed by Maryland energy regulators last week.
"We are analyzing the order, and the commission's requirements relating to the customer credit, and will announce our plans just as soon as we complete that process," Constellation spokesman Rob Gould said.
Other issues left unresolved include the location of EDF's new U.S. headquarters in Maryland, the scope of Constellation's future charitable giving, and the construction of a visitor center and new nuclear unit at Calvert Cliffs.
On Friday, the state Public Service Commission approved Constellation's $4.5 billion deal to sell half of its nuclear power business to EDF. But regulators added conditions such as the ratepayer credit totaling $110.5 million and measures to protect BGE from future financial troubles of its parent company.
The commission directed the company to implement the credit before March 30 to offset winter heating bills.
Constellation said it has received board approval to move forward with the transaction "as quickly as possible so that we can begin to deliver the many benefits of this investment to all stakeholders across the state."
In a separate statement, Paris-based EDF said it has chosen Maryland to be at the center of its nuclear growth efforts in the United States. "EDF is eager to be a strong corporate citizen in Maryland, and looks forward to moving its U.S. headquarters to the state."
EDF said it expects to make a decision shortly on a location. EDF's Washington office has 25 employees; they would move to the company's new U.S. headquarters in Maryland.
While neither Constellation nor EDF has made a definite decision to build the proposed third nuclear unit at Calvert Cliffs, the two companies have pledged to pursue the project.
The companies made the fate of the nuclear plant the centerpiece of a campaign extolling the joint venture's benefits. They had warned that the new unit would not move forward if the PSC rejected or put excessive conditions on the deal.
So far, the proposed nuclear project has received approval by the PSC and has been chosen by the U.S. Department of Energy for "final due diligence" for a federal loan guarantee considered key to financing the unit. It also needs approval by the Nuclear Regulatory Commission.
Rick Abbruzzese, a spokesman for Gov. Martin O'Malley, who pushed for ratepayer credit and other concessions, said Monday that the governor is "pleased that the parties have moved forward under the conditions established by the PSC."
Speaking before a statue dedication ceremony at the Inner Harbor for former Mayor and Gov. William Donald Schaefer, O'Malley said he was looking forward to working with Constellation to meet the state's "energy needs." He said, "we did not get everything we pushed for, but we got a lot more for consumers than they otherwise would have received."
Asked about the proposed unit at Calvert Cliffs, O'Malley said, "I'd like to see us move forward on Calvert Cliffs III. He said the transaction was "about a different issue, but I've always been in favor" of another reactor at Calvert Cliffs.
The $110.5 million of ratepayer relief ordered by state regulators equals the amount Constellation and EDF had proposed spending on a visitor center at Calvert Cliffs and charitable contributions, among other items. The PSC said it's not requiring the companies to use those funds to pay for the rate relief, adding that it hopes the companies would follow through on those commitments anyway.
Constellation and EDF have not decided whether it can move forward with those projects.
"Given we're still in the process of closing the transaction, the two sides have yet to discuss this issue," said Gould, referring to the visitor center and the charitable donation.
Meanwhile on Monday, Standard & Poor's downgraded Constellation's credit rating to one notch above junk status. S&P; lowered Constellation from "BBB" to "BBB-" with a stable outlook after reviewing the company as a stand-alone business without BGE.
The ratings service, however, upgraded BGE's credit rating to "BBB+" from "BBB" because the conditions set by the regulators are supportive of the utility. It's unusual for S&P; to rate a subsidiary higher than the parent, the rating firm said.
Moody's Investors Service affirmed the ratings of Constellation and BGE, while Fitch Ratings said Monday that it does not expect a ratings impact from the deal's approval.
Baltimore Sun reporter Arthur Hirsch contributed to this article.
INSIDE
O'Malley tried, unable to halt jump in BGE bills.
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