Maryland PSC Should Approve EdF Purchase of Constellation Energy Nuclear Unit

The Maryland Public Service Commission (PSC) is holding hearings this week to determine if Electricite de France (EdF) can buy 49.99 percent of Constellation’s nuclear business. There is some concern, which we find ridiculous, that EdF could have “substantial influence” over Constellation’s regulated entity, Baltimore Gas & Electric (BG&E) Company. If anything, EdF will have a very positive 'influence' on BGE by not only keeping them in business, but also by mitigating global climate change and smog reduction by building a new nuclear power plant at the site. The Maryland PSC should approve this merger with all deliberate speed. The commission expects to conclude its review of the deal in early June.

Constellation and EDF would each choose five board members to vote on company issues, and Constellation would appoint a chairman who would have the deciding vote in all budget, safety and security matters. In December, Constellation accepted a $4.5 billion offer from EDF for nearly half of its nuclear power business, ending a $4.7 billion merger deal with MidAmerican Energy Holdings Company. Constellation entered into the merger deal in September to avoid filing for bankruptcy after the state of its commodities business significantly deteriorated. EdF, Constellation’s largest shareholder at the time, also entered a bid in September, but it was denied. The decision to break the merger MidAmerican means that Constellation will remain an independent firm headquartered in Maryland with thousands of employees. EDF also plans on moving its U.S. headquarters to Maryland.

Constellation has applied to the Nuclear Regulatory Commission for approval to build a new nuclear reactor in Calvert County next to the company’s two Calvert Cliffs reactors. Building a new reactor could cost between $6 billion and $10 billion. The Constellation-EDF deal has received approval from federal regulators and from the Public Service Commission of New York state, where Constellation also owns nuclear reactors. (MD Daily Record, 4/27/09) (MD Daily Record, 4/28/09)