PSC to decide on Constellation deal today 

Posted: 7:49 am Fri, October 30, 2009
By Danielle Ulman
Daily Record Business Writer

Constellation Energy Group Inc.’s wait will end today.

The Public Service Commission will issue a decision at about noon today on its proposed nuclear deal with Electricite de France. The PSC has been reviewing the terms of the deal to determine if it’s in the public’s best interest.

Constellation posted a profit for its third quarter today, mainly due to the absence of charges the company took in the quarter in 2008.

The Baltimore-based firm earned $137.6 million, or 69 cents a share, compared to a loss of $225.7 million, or $1.27 per share, in the quarter last year.

Adjusted net income for the quarter was $1.23 per share, beating analyst expectations of earnings of $1.07 per share, according to Thomson Reuters. Analysts exclude one-time charges in their estimates.
Strong quarterly earnings prompted Constellation to increase its earnings guidance for 2009 by 15 cents to $3.25 to $3.45 per share.

“Throughout the year, we have executed well on a broad restructuring that has positioned our company to prudently expand our physical footprint,” said Mayo A. Shattuck III, Constellation’s chairman, president and CEO, in a statement.

“We believe we’re poised to deliver significant value to shareholders in the years ahead,” he said.

Constellation sold off some of its riskier commodities businesses earlier this year. The volatility in those markets pushed the company into a merger agreement with Warren Buffett’s MidAmerican Energy Holdings Co. in September of last year. Constellation pulled out of that deal in December in favor of the nuclear joint venture with EDF.

Rumors have surfaced this week that the French government and the new head of EDF would like to scrap the $4.5 billion deal to buy 49.99 percent of Constellation’s nuclear business. A French official told the Dow Jones Newswires Friday that the government has no position on the joint venture yet.

If EDF did pull out of the deal, Constellation has the option to sell $2 billion worth of coal plants to EDF, something that officials of the French company said they did not want during hearings at the Public Service Commission in September.

The PSC accepted its final briefs from all parties to the Constellation case on Monday. Gov. Martin O’Malley continued to push for the elements of his settlement deal that Constellation rejected this summer – like credits for customers of Baltimore Gas & Electric Co. Constellation said in its brief that it would not complete the deal at all costs.

“We continue to work toward the close of our pending nuclear joint venture with EDF Group (EDF),” Shattuck said. “We took a step closer earlier this month with the approval of the overall transaction by the Nuclear Regulatory Commission, and we are nearing the end of the process in Maryland.”