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Constellation deal would not revive push for new reactor at Calvert Cliffs

The proposed merger between Constellation Energy Group Inc. and Exelon Corp. is not going to revive efforts to build a new reactor at the Calvert Cliffs nuclear power plant.

Exelon Chairman and CEO John W. Rowe said during a conference call Thursday that the $7.9 billion deal would not include a push to pursue the abandoned expansion effort at Calvert Cliffs. He said speculation the company, which is the largest nuclear plant operator in the U.S., would look to build new plants was not accurate.

“That is simply not the case,” Rowe said. “At today’s [natural] gas prices, you can’t build a new nuclear plant.”

Constellation operates a joint venture with French power company Electricite de France SA to run three nuclear plants, including Calvert Cliffs. The joint venture was also to undertake new nuclear projects starting with the third reactor at Calvert Cliffs. The two companies abandoned a second joint venture to build new nuclear plants in the U.S. after Constellation balked at the cost compared to the return.

EDF has kept the project alive and is working to secure a loan guarantee to help finance the project, which could cost more than $8 billion. Additionally, as a foreign corporation, EDF must find an American partner for the project to meet federal regulations.

The French power company is the second-largest shareholder of Constellation and holds 7.2 percent of the company’s outstanding stock. On Thursday, EDF officials said they were anticipating the joint venture to remain as it is.

“We are studying the proposed terms and, as all vigilant shareholders are undoubtedly doing, are evaluating the value proposition and our options,” the company said in a statement. “EDF will also be mindful that the integrity of our existing nuclear joint venture with Constellation is preserved.”

Exelon officials seemed inclined on Thursday to keep the status quo with EDF. In response to a question about whether Exelon would also look to buyout EDF’s interest in the nuclear venture, Rowe said that was not in the plans.

“This transaction stands on its own,” he said.