Exelon’s proposed $7.9 billion takeover of Constellation Energy would lead to about 600 redundant positions, but the two companies are working to ease the impact in Maryland, two top executives told state regulators Wednesday.
In their third straight day of testimony, Exelon President and Chief Operating Officer Christopher Crane noted that 200 positions are being moved from Pennsylvania to Maryland under the proposed merger.
The deal also includes a $100 credit for each residential customer of Constellation’s regulated utility, Baltimore Gas and Electric, as well as a promise to build 25 megawatts of renewable energy in the state and a new headquarters in Baltimore.
Crane and Constellation CEO Mayo Shattuck were questioned for several hours by attorney William Fields of the Office of the People’s Counsel, which represents consumers before the commission.
Crane responded sharply at one point to questioning by Fields about whether the building of the Baltimore headquarters would provide any benefit to the company.
“We don’t need to build that building, we can have those 1,000 jobs in Kennett Square, Pa.,” Crane responded.
The Exelon executive said the headquarters is bringing investment and keeping jobs in Maryland at the expense to the company. Crane said Exelon was emptying leased space at its nuclear headquarters in Chicago and probably would not be able to sublet the space because of security concerns.
However, during questioning later on, Crane said about 600 positions are expected to overlap after the two companies merge with about 200 positions expected to move from Pennsylvania to Maryland as part of the reshuffling of corporate functions.
Crane and Shattuck have been the first of what are expected to be dozens of witnesses over 11 days before the PSC, which is determining whether the proposed sale is in the public interest. Gov. Martin O’Malley’s administration has said it opposes the deal unless changes are made, saying it poses risks for BGE customers. The state is seeking a significantly higher renewable energy commitment from the two companies.
In addition to asking Crane and Shattuck about benefits the combined company might receive from the renewables and the new headquarters, Fields asked how much control BGE would retain over its operations, and how many jobs would be lost and where.
Shattuck said there was no doubt there are redundancies in the two companies.
“What is not as clear is who’s the best” at each position, the Constellation executive said, adding the objective was to be jobs neutral.
Crane said the combined company would first look at who wants to retire “and then pick the best remaining people.”
“But we’re still designing and working that whole thing out,” Crane added.