Feb 29, 2008 1:26 pm US/Eastern
Maryland Sues Constellation Over Energy Credits
BALTIMORE (AP) ―
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Maryland has filed a lawsuit against Constellation Energy Group over $386 million in energy credits to consumers.
Maryland filed a lawsuit against Constellation Energy Group on Friday in an effort to retain for customers $386 million in energy credits that the Baltimore-based company is contesting.
Gov. Martin O'Malley and Attorney General Doug Gansler announced that the lawsuit was filed in Baltimore Circuit Court against Constellation and its subsidiaries.
"In this time of economic uncertainty for so many of our families, it is unfortunate that Constellation would seek to further boost its profits on the backs of the working people of our state," O'Malley said in a statement.
Rob Gould, a spokesman for Constellation, said the company had just been made aware of the lawsuit, and company officials were studying it.
The credits were approved by Maryland lawmakers in a June 2006 special session to address rising costs at Baltimore Gas and Electric Co. -- a Constellation subsidiary -- because of Maryland's decision to deregulate the electricity market in 1999.
"The $386 million rightfully belongs to Maryland ratepayers, and we will do everything in our power to make sure that this cost is not passed on to consumers," O'Malley said.
Constellation announced last month it plans to sue the state in federal court to reverse a provision for $386 million in credits to customers. Legislation approved in the 2006 special session provided credits to BGE customers totaling $38.6 million a year for 10 years.
The state's lawsuit represents the latest parry in a long-running dispute between state officials and the utility. Along with the lawsuit, the company has indicated it's thinking about building a nuclear power plant in New York, instead of Maryland, because of what it describes as an increasingly hostile regulatory climate in Maryland.
State regulators issued a report in January that was critical of the 1999 deregulation settlement. In addition to the cost of nuclear decommissioning, the settlement covered "stranded costs," the expenses incurred by BGE during the transition to deregulation.
The report concluded that ratepayers were actually responsible for about $550 million more in stranded costs and $250 million more in decommissioning costs than the settlement indicated.
Constellation disputes those claims. In January, the company told the state it would seek federal court action to end the litigation standstill agreement, saying state law pertaining to the energy credits is unconstitutional.
(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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