Exelon Corp. (EXC)’s offer to increase by nearly a third the amount of wind or solar power it will build in Maryland falls short of new demands by state officials who oppose the company’s purchase of Baltimore-based Constellation Energy Group Inc. (CEG)
Exelon said it will spend more than $220 million to build 175 megawatts of new power generation in the state, with 55 megawatts of that from wind or solar sources, according to a filing today with state regulators who must approve the transaction. The company previously had proposed adding 25 megawatts of renewable energy in the state, with an additional $10 million invested in electric vehicles.
Maryland Attorney General Douglas Gansler said the state’s concerns with the merger would be satisfied if Exelon committed to developing 375 megawatts of power from renewable sources, more than six times the company’s proposal. The state demanded 350 megawatts of land-based wind generation and 25 megawatts of power generated from poultry litter and other biomass sources.
An investment on that scale would mitigate the public harm of the merger, including job losses, “many of which could be erased through green jobs associated with the development and maintenance of the new renewable energy projects,” Gansler said in a filing made on behalf of Maryland Governor Martin O’Malley and the Maryland Energy Administration.
’A Good Package’
Christopher Crane, Exelon’s president and chief operating officer, described the company’s latest offer as a “good package” that will add more than $445 million to Maryland’s economy. The company listened carefully to the concerns of the state and other interested parties before enhancing its offer, Crane said in a statement.
The five-member Maryland Public Service Commission held 11 days of hearings to review the acquisition last month and will decide whether to approve it by Jan. 5.
O’Malley successfully battled two prior merger attempts by Baltimore-based Constellation and may be one of the biggest political obstacles to Exelon’s transaction. The governor, a strong advocate for wind and solar energy, has been pushing Exelon to boost its investment in clean energy in the state.
Other parties with an interest in the merger continue to raise questions about its impact on power prices in Maryland and customers of Baltimore Gas & Electric Co., Constellation’s regulated utility.
Paula Carmody, People’s Counsel for the state of Maryland, suggested the state utility commission double a proposed merger- related rebate to consumers to $200 and to require a three-year rate freeze.
The International Brotherhood of Electrical Workers urged Maryland regulators to deny approval of the merger in a filing to the commission today, citing potential job losses.
Electricite de France SA (EDF), the partner in Constellation’s five nuclear reactors, reiterated its opposition to the transaction, claiming the merger’s benefits “are both woefully inadequate and totally illusory. Maryland jobs will be lost, Maryland tax revenues will decline, and Maryland’s ability to influence its electric generation facilities will be severely limited.”
Utilities analyst Paul Patterson suggested the differences may still be reconciled.
“A lot of times a settlement doesn’t happen until they’re on the courthouse steps,” Patterson, a New York City-based analyst with Glenrock Associates, said in a telephone interview.
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