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Regulators Want To Review BGE Plan To Sell
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The brakes are on when it comes to the sale of Constellation Energy to the French company EDF.
Weijia Jiang reports state regulators must review and approve the deal before it becomes final.
Constellation Energy warns if this sale is seriously prolonged, it could be BGE customers who pay for it.
Constellation Energy's plans to sell half of its nuclear power business to the French firm EDF are on hold, under fire yet again.
The $4.5 billion deal has sparked ongoing controversy since the agreement was announced back in December.
At the time the companies said approval from Maryland regulators was not required, but on Thursday the state public service commission ruled it does have the right to regulate the deal because it would give EDF substantial influence over BGE.
"We structured it in a way where it would protect against any harm to BGE customers. There's a process that we felt we satisfied to show that but now they want to take another look and that will drag things out much longer," said James Connaughton, a Constellation Energy spokesperson.
Constellation has already filed an appeal to the PSC ruling in Baltimore Circuit Court.
Top executives say delaying the sale could ultimately mean higher costs for BGE customers.
"If BGE's credit rating goes down, it's cost of getting money from banks goes up, and what that means is higher costs, ultimately to the business and to its customers," adds Connaughton.
But Johanna Newmann, Director of Maryland Public Interest Research Group calls than an unfounded threat.
Newmann says without state regulation there would be no safeguards for consumers.
"Almost all nuclear power plants go dramatically over budget, and we are concerned BGE ratepayers could be on the hook for some of those costs if their project goes over budget," says Newmann.
The agreement also garnered criticism for an incentive that would pay 20 Constellation managers bonuses at a cost of $32 million dollars.
Plans to build a pricey nuclear reactor at Calvert Cliffs while it would create thousands of Maryland jobs, opponents want to see more research about the deal.
The Public Service Commission has scheduled a meeting to talk about proceedings with Constellation Energy on June 17th.
In a statement the Governor agrees with the commission's ruling to become involved with the EDF deal, but stresses that does not mean the state is opposed to it.
(© MMX, CBS Broadcasting Inc. All Rights Reserved.)
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