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Getting to 'no' on Constellation-Exelon

A lot of people apparently believe — and in this epoch of corporate hubris, who can blame them? — that the Constellation-Exelon deal is a done deal. They assume the purchase of the Baltimore-based company that owns our beloved Baltimore Gas & Electric Co. by an energy giant in Chicago for $7.9 billion will probably go through, making the smiling rich guys even richer. The whole thing should give BGE customers the creeps; regulators and public advocates are already saying it's a bad deal for Maryland consumers. But I suspect that most of you believe this merger happens no matter what.

Hey, it's OK to be jaded. That's normal. This fall marks the 10th anniversary of the collapse of Enron, the energy-trading giant, and the loss of thousands of jobs and retirement accounts. We're also upon the third anniversary of the onset of the worst financial crisis since the Great Depression and former Fed chairman Alan Greenspan's amazing Ayn-Rand-was-wrong moment in Congress: "Those of us who have looked to the self-interest of lending institutions to protect shareholders' equity ... are in a state of shocked disbelief."

The last three decades have been marked by deregulation and faith in the free markets, exuberant capitalism, corporate buyouts and mergers, tax cuts for the rich, the elimination of millions of American jobs, the decline of organized labor, the stagnation of middle-class income, obscene corporate profits and executive compensation — topped off by wanton mortgage lending and the housing bubble, and followed by the Great Recession and its long, lousy aftermath. What difference do our pathetic little Ralph Naderesque objections ever make to anything the corporate class does? With few exceptions — and often with the complicity of Congress — the smiling rich guys get their way.

So, you'd be hard-pressed to find anyone in Maryland today who thinks that, in the end, the Public Service Commission will tell Constellation Energy that it cannot sell itself to Exelon because it's a bad deal for Maryland consumers.

Still, call me a fool, but I'm holding out hope for that scene in "It's A Wonderful Life" where George Bailey feels something icky on his fingers after a handshake with the sinister Mr. Potter, then stands up and angrily says no to a deal with the devil: "You sit around here and you spin your little webs and you think the whole world revolves around you and your money. Well, it doesn't, Mr. Potter. In the whole vast configuration of things, I'd say you were nothing but a scurvy little spider!"

Where's our George Bailey? Who's going to stand up to the rich men in suits who run these companies, and say, "No deal — it's not good for us"?

Constellation Energy owns BGE and, if the deal goes through, BGE customers will almost certainly end up paying more for gas and electricity. Anyone who went without power in the wake of Hurricane Irene ought to be concerned about whether a local utility owned by an out-of-state energy giant will be able to reliably deliver service to Maryland's growing population. Plus, corporate mergers usually mean a loss of jobs, and pardon me for being skeptical about Exelon's claim that there will be net job growth from the deal.

All of these concerns are being addressed by the Maryland People's Counsel, the Maryland Energy Administration and some of the staff of the PSC and the O'Malley administration. Even the French are skeptical; Constellation's second-largest shareholder, Electricité de France, has some issues with the deal.

But all of these challenges appeared to be bargaining chips — efforts to sweeten a deal that is considered a fait accompli.

I say nuts to that. What is this deal about besides making the smiling rich guys richer? Why would we put further distance between the corporate governance of BGE and the utility that 1.2 million Maryland customers count on for power? Why would we essentially sell off control of a public utility for $100 a customer and a relatively mediocre package of incentives from a company that makes billions in profits?

The Maryland legislature created the Public Service Commission in 1910 to be "broadly representative of the public interest" and to regulate utilities. What is the point of the PSC if not to reject Mr. Potter-type propositions like Constellation-Exelon?

Dan Rodricks' column appears Tuesdays, Thursdays and Sundays. He is the host of Midday on WYPR 88.1 FM. His email is dan.rodricks@baltsun.com.

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