Constellation Energy Group closed a deal Friday to sell half its nuclear power business to a French utility, one week after Maryland regulators approved the $4.5 billion transaction with conditions.
The deal's closure ends a difficult chapter for Constellation, which teetered on the edge of bankruptcy amid the meltdown of the financial sector last year. Forced by a severe cash shortage to find a partner, Constellation initially agreed to a takeover by billionaire investor Warren Buffett before switching to the deal with Electricite de France in December.
In completing the deal, the Baltimore company surmounted regulatory hurdles and overcame political pressure. The agreement creates a joint venture to expand the companies' partnership to develop and build the first nuclear power plants in the United States in more than three decades, including a new unit at Calvert Cliffs.
Constellation's nuclear assets include existing Calvert Cliffs units in Southern Maryland and the Nine Mile Point and R.E. Ginna plants in New York.
"With the close of the transaction, the companies look forward to working together to deliver the expected economic, environmental and clean energy benefits created by the joint venture," the two companies said in a statement.
In completing the transaction, Constellation will begin implementing conditions imposed by the Maryland Public Service Commission, including paying a one-time credit of $100 each to residential customers of its regulated utility, Baltimore Gas and Electric Co.
Other concessions include measures to protect BGE from future financial troubles of its parent company. Constellation must make a $250 million cash infusion to BGE by June 30, limit dividend payments from BGE, delay requests for delivery rate increases and establish "ring-fencing" measures to protect the utility from the parent's potential bankruptcy.
It is not clear when ratepayers can expect to see the credit on their bills; the PSC gave Constellation until March 30 to implement the credit totaling $110.5 million.
Constellation is expected to update the PSC on its progress at a hearing Dec. 1.