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April 9, 2008

BGE, parent scrapped executive role that troubled PSC

Last year the Maryland Public Service Commission grew concerned about the dual role in BGE's electricity purchases played by an executive named John Collins. Collins was chief risk officer for Constellation Energy, BGE's parent and one of the electricity suppliers seeking to win BGE's business. But he also advised BGE on its electricity purchases -- held via a reverse auction -- and was in a position to see bids from Constellation rivals.

The PSC correctly was troubled by this. Theoretically somebody on both sides of the table could have coached Constellation on how to win BGE's business without bidding a penny lower than necessary. Constellation did indeed win a huge portion of the BGE account. Collins has since been promoted to chief financial officer. Yesterday BGE/Constellation spokesman Robert Gould told me that the dual role has been eliminated for Collins' successor or anybody else.

Since 2006, no one from CEG, including the Chief Risk Officer, has participated in the auction - has not, is not, and will not be advising BGE on the auction. We took this action voluntarily and not under any order or demand of the PSC.

More on the opaque process by which BGE buys electricity in today's column.

Posted by Jay Hancock at 8:29 AM | | Comments (0)
        

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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Tuesdays and Sundays.
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