Thursday, December 04, 2008
Electricite de France Wants Half of Constellation Nuclear Unit
Electricite de France (EdF) is offering to buy 50 percent of Constellation's nuclear power business and the Center supports the proposal. The Center has publicly stated that it supports the French firm's ownership and operation of the Calvert Cliffs nuclear power plant over that of Warren Buffet's MidAmerican Energy Holdings Company. We believe EdF would be a
better steward. Of course the EdF offer now includes Costellation's other two nuclear plants in New York: 1) Nine Mile Point and 2) Ginna. The plants are side-by-side on Lake Ontario in Scriba, New York. EDF's proposal would require review by the Nuclear Regulatory Commission and the Committee on Foreign Investment in the United States. The Center believes this arrangement is the second best solution and would leave Constellation with Baltimore Gas and Electric, the utility that serves 1.1 million electric and gas customers in Maryland; its coal- and natural-gas power generation business; its commodities trading operations and half the nuclear business.
EDF is Constellation's largest shareholder and partner, with a 9.5% stake in Constellation. On December 23, Constellation shareholders will vote on the $4.7 billion transaction with MidAmerican. The Center urges shareholders to vote
against the purchase and to accept the origonal EdF/Kohlberg Kravis Roberts & Company (KKR) proposal. Absent that, then the 50 percent nuclear units partnership is acceptable to us. EDF is also proposing to provide Baltimore-based Constellation an immediate $1 billion cash infusion, just as MidAmerican provided in its purchase agreement. The Maryland Public Service Commission plans to make a decision about the MidAmerican deal by April 15. (The Baltimore Sun, 12/3/08)