BALTIMORE, Jan. 17 /PRNewswire-FirstCall/ -- Constellation Energy
(NYSE: CEG) today released the following statement regarding the release by
the Maryland Public Service Commission (PSC) of its January 17, 2008,
Interim Report to the Maryland General Assembly on Stranded Costs,
Competitive Transition Charge Payments and Nuclear Decommissioning:
Constellation Energy is reviewing the Maryland PSC's report, but it is
immediately apparent that the report is based upon flawed analyses.
Furthermore, the report is an attempt to rewrite the true history of what
was a complex, multi-stakeholder process and the resulting settlement
agreement that included the PSC, PSC Staff, the Office of People's Counsel
(OPC), the Maryland Energy Administration and at least a dozen other
interested parties.
"While we have just begun the process of reviewing the Maryland PSC's
interim report, it would appear upon initial review that this PSC report,
which was prepared without public comment or review, misstates and omits
numerous facts and is based on flawed assumptions," said Mayo A. Shattuck
III, chairman, president and chief executive officer of Constellation
Energy. "Overall we're concerned that this report will have a detrimental
effect on Maryland, especially at a time when energy-related investments
are so essential for this state.
"Constellation Energy has complied with the spirit and letter of the
1999 legislation and settlement," continued Shattuck. "We operate with
integrity, transparency, and a sense of mission and pride. Any allegations
or innuendo to the contrary in the report is flatly and demonstrably false.
"We will continue to work with the Maryland PSC to ensure fair, legal
public policy that balances the interests of all stakeholders," added
Shattuck. "While Constellation Energy will continue to be a willing
participant in any productive dialogue, we will unequivocally reject any
mischaracterization of our actions.
"When invited to be part of a productive process that intends to
improve current regulations or laws, Constellation Energy, as it has in the
past, will dedicate itself to being a positive part of that process," said
Shattuck.
Initial review of the PSC's report by Constellation Energy reveals many
deficiencies and omissions, including the following:
-- It wrongly assumes that those stakeholders involved in the 1999
deregulation legislation and subsequent settlement process did not know
what they were doing. The 1999 Commission and the parties in the case
were competent and highly professional. Certainly, the Commission and
the parties knew the difference between before- and after-tax dollars
and between present and future values. Such basic concepts are
routinely used in regulatory proceedings.
-- It wrongly suggests that the Maryland General Assembly should consider
attempting to undo cases fully litigated to final judgment in the
Maryland Courts. The stranded cost issue was fully adjudicated twice -
both at the Circuit Court for Baltimore City and Maryland Court of
Special Appeals - with a final judgment upholding the settlement. In
fact, the Courts determined that those involved did "a commendable job"
in reviewing and approving the settlement.
-- It fails to adequately address the recent expert testimony of the PSC
Staff and OPC who testified that residential customer bills were no
higher than they would have been had there been no stranded costs.
Stranded costs did not increase residential customer bills; in fact,
residential customer bills were decreased 6.5 percent and frozen for
six years as a result of the settlement.
-- It wrongly attempts with hindsight to "cherry pick" parts of a decade-
old settlement. The restructuring settlement had many components,
including a six-year rate freeze which provided in excess of $1 billion
in benefits to ratepayers. It is improper to focus only on select
portions of the settlement.
-- It omits the fact that the 1999 settlement relieved ratepayers of the
risks and obligations associated with maintaining and upgrading the
plants. Constellation Energy has been or will be required to invest
$2.7 billion in capital expenditures in the plants during the period
2000-2010.
-- It omits the fact that Baltimore Gas and Electric Company (BGE) gave up
more than $400 million in revenue associated with accelerated
depreciation and regulatory assets.
-- The report overlooks the fact that inter-company transactions related
to stranded costs were for the benefit of BGE and had no impact on
customer bills. The report's criticism of these transactions falls
under the category of "no good deed goes unpunished."
-- The Commission and the parties understood the workings of nuclear
decommissioning as it had been examined in various regulatory
proceedings and BGE has been filing annual decommissioning reports
since 1985.
-- The Calvert Cliffs nuclear decommissioning trusts comply with the U.S.
Nuclear Regulatory Commission requirements, which are designed to
ensure adequate funding for decommissioning.
-- The Commission report is misleading with respect to ratepayer liability
for nuclear decommissioning; for example, it seems to wrongly suggest
that ratepayers would be responsible for decommissioning costs for a
third unit at Calvert Cliffs.
-- It wrongly suggests that the Maryland General Assembly should ignore
well-established boundaries between federal and state jurisdiction.
Constellation Energy (http://www.constellation.com), a FORTUNE 125
company with 2006 revenues of $19.3 billion, is the nation's largest
competitive supplier of electricity to large commercial and industrial
customers and the nation's largest wholesale power seller. Constellation
Energy also manages fuels and energy services on behalf of energy intensive
industries and utilities. It owns a diversified fleet of 78 generating
units located throughout the United States, totaling approximately 8,700
megawatts of generating capacity. The company delivers electricity and
natural gas through the Baltimore Gas and Electric Company (BGE), its
regulated utility in Central Maryland.
SOURCE Constellation Energy
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Related links:
http://www.constellation.com/
http://www.prnewswire.com/comp/084087.html/
CONTACT:
Media, Robert L. Gould or Debra Larsson,
+1-410-470-7433, or Investors, Kevin Hadlock, +1-410-470-3647, or
Janet Mosher, 1-410-470-1884, all of Constellation Energy
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