Constellation Energy’s $4.7 billion merger deal with MidAmerican Energy Holdings Co. isn’t the first time the Baltimore-based company has tried to sell itself.
Two years ago, Constellation had a massive $28 billion deal in place to sell itself to Florida Power and Light. But state lawmakers said the deal was flawed and negotiations with regulators hit a wall, causing Constellation to scrap the deal.
Now, state Senators E.J. Pipkin and Jim Rosapepe have advanced a plan to possibly make full re-regulation of Maryland’s electricity industry part of Constellation’s sale, bringing the state’s energy prices back under the control of its Public Service Commission.
“We’ve looked at going back to a re-regulated environment over the last few years, and the answer was always, ‘We don’t want to disturb anything,’” he said. “Now we have a major deal coming, and I’m just saying the governor should be asking these questions.”
However, Constellation representatives said the proposal would not lower consumer’s monthly bill.
“Re-regulation would not result in a better deal for BGE customers,” company spokesman Rob Gould said. “It would no doubt require significant taxpayer expense and would expose BGE customers to all the risks of running a power plant.”
PSC spokeswoman LaWanda Edwards said the commission had no comment on Pipkin’s plan and had not yet received any filings on the proposed merger.
The Constellation-MidAmerican deal does have differences from the 2006 merger — the current PSC has a stable roster and a more solid relationship with Constellation. The two sides reached a settlement agreement earlier this year on lawsuits filed against each other over a condition of the FPL merger that remained after that deal was terminated.
Mid-American CEO Gregory Abel said last week that the company saw three areas of promise with Constellation: Its subsidiary utility Baltimore Gas and Electric, its other power generation assets including the Calvert Cliffs Nuclear Power Plant, and its energy-trading business.
Abel said the company was interested in continuing Constellation’s previously announced plan to build a third reactor at Calvert Cliffs, which would be constructed in a partnership with French energy firm EDF. That company had also placed a purchase offer for Constellation, but received no response.
However, it’s not clear whether removing the BGE component of Constellation from the merger would be a deal-breaker. MidAmerican representatives could not be reached for comment Wednesday.
In the analyst call earlier this week, Constellation CEO Mayo Shattuck touted the company’s improved relationships with regulators since the aborted FPL merger.
“Given the lessons learned here in Maryland from the last time around, I think we’ve worked very hard to have a process that works efficiently,” he said.
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