What went wromg???

I worked for them after they bought the R.E. Ginna Nuclear Power Plant in Upstate NY.

I voluntarily left there in April 2007 after more than 20 years. The last three as a Constellation employee finally taking their toll.

What went wrong??? How do you spell ENRON II??? I spell it Constellation Energy!!!

Greed is wrong, no matter how you spell it and it's everything they are about!!!

I couldn't be happier to be gone, but my care goes out to my friends still there who will be affected by this.

The chickens are coming home to roost soon.

Can't believe you are a reporter in the city's only "read" newspaper with ur facts wrong. And I am assuming u r not even internet savvy to figure out whats going just by going to google finance, doh!

You are partly right. Constellation is not changing its earnings outlook of $ 5.25. However, that is contingent on rating by people like S&P, Moodys and Fitch. S&P is swinging a big hammer that says, we're concerned about your cash and ability to back the trades you make in the power marketing arena. This is being pushed by the current constraint in the debt markets. As a result, Constellation may have to come up with billions of cash as collateral for trades, or stop the trades and hence stop the profits. It is a cash call, or liquidity crisis which causes a profit crisis.

You are partly right. Constellation is not changing its earnings outlook of $ 5.25. However, that is contingent on rating by people like S&P, Moodys and Fitch. S&P is swinging a big hammer that says, we're concerned about your cash and ability to back the trades you make in the power marketing arena. This is being pushed by the current constraint in the debt markets. As a result, Constellation may have to come up with billions of cash as collateral for trades, or stop the trades and hence stop the profits. It is a cash call, or liquidity crisis which causes a profit crisis.

The bottom line is that this company is playing around with my livelihood-- that is, the energy I consume to carry out my daily life. This is a reminder to all the bright young MBAs out there that this is why government regulation is needed for utilities. In fact, this is why giovernment should totally control THIS utility.

Sales talks...
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&date=20080917&id=9155843

Too Clever By Half-

details, details, just saying something is wrong doesn't help the rest of us see what is going on. Details please.

I guess I shouldn't be surprised that Hancock's column makes absolutely no mention of the liquidity issues caused by state forced utility rebates that fly in the face of rising supply costs. Of course.......there could be no fault on the part of the current administration! Let them buy current votes with long term loss of jobs. Who cares?

I work for Bg&e. Last night I downed a few beers with a high school buddy who is an investment banker.He cautioned me that my stock was possibly in peril and when I peppered him with questions about how was it possible that all of these financial giants were falling like drunken sots--his answers were summed up in one word ''greed''. I hope they all choke on the strings of their very golden parachutes.

CEG is major player in energy trading, particularly electricity and natural gas (and who knows what else they may have dabbled in). In the case of natural gas, it is down roughly 30% since peaking in July. Commodities such as natural gas have less stringent margin requirements than stocks. You only have to front 5-10% to buy in. When the market is going up, it is all good. When it turns, you owe the house the difference. It is hard to say if they were making such risky bets, however, it would explain things. Regarding the CEG quarrels with the MD, it is tempting to say that the state pushed them under. You have to remember that they negotiated the deals with the state themselves and, if they struck a bad deal, they need to own up to it, i.e. accountability. Furthermore, once the deal was in place, it was a complete known. It was not an unpredictable event like the extreme volatility that is being seen in financial markets.

I guess greed is okay when you are playing with your own money. Constellation Energy is playing with cash from ratepayers for the benefit of outrageous salaries. Furthermore, who knows, if citizens are paying a fair rate for utilities. This industry should be reregulated by the state of Maryland.

I worked for CE as well for several years, until recently. There is some truth and some untruth posted here. As for what went wrong; well, a lot. The company is partially to blame for poor risk management. It is not smart to be assume high risk exposure during a financial meltdown. CE no doubt knew this, but couldn't do much about it.

You'll recall that the state squashed a CE/FPL merger a few years ago, which would have given CE the necessary backing to avoid this problem. Afterwards, the state made it impossible for CE to either merge or relocate (either would have helped) by various means too complicated to explain here. At that point, this was somewhat inevitable. This is ABSOLUTE FACT, and anyone who says otherwise simply doesn't have accurate information.

"Naked short-sales" absolutely exasperated the existing confidence and credit problem. Too complicated to explain if you don't know what this is. Check out the article from this afternoon on CNN Money for good info. While the steady decline of the past couple months was due to other things, naked short sales drove it into the ground this week.

And, as is always the case, greed was a motivator as well. But in the shadow of the factors above, this was the least impactful factor of those mentioned in causing CE's imminent demise.

Shattuck comes from a traders background at Alex Brown and his lifestyle emulates Gordon Gecko. Guys like him can tweak the stock value of firms for limited periods but they cannot adapt to unexpected variables. That six sigma philosophy ends up in collapse when the variable is something other than what the model predicted. A simple rule is not to turn operating concerns over to gimmick gurus. A sale, if his army of wonks goes will be good for all of us in the long run.

As a former supervisor in an affiliate of CEG, I am disgusted by this failure. I knew something was amiss when their 49 year old CF0, E. Follin Smith, suddenly left the firm a couple years ago. Then this spring there was heavy insider stock transactions by the executives.

Mayo Shattuck and the other senior executives should be held accountable and prosecuted if warranted.

I was an unwilling witness to "Enron" like business tactics and would be proud
to expose these people.

My CEG 401K is now almost worthless.

Hey Kevin Clifford,
Those are some pretty heavy allegations. I certainly hope, for your sake, that you aren't spreading rumors; that is illegal.

Jay,

I know absolutely nothing about Constellation Energy. But your explanation is so elementary, it just couldn't happen. I don't think you know what you are talking about!

Hancock should be a speech writer for the DNC, not a financial reporter. Nothing in your post is accurate. There are no accounting issues remaining. This company needs to access capital via short term financing to fund it trading operations to make money. With no access to capital...no trading....no profit. The real villian(s) are the democrat's who control the governors mansion and the state house. An approved merger w/FPL would have provided CEG with significantly more capital and avoided this scenario. Don't blame the executives, don't blame the accounting firms, blame the idiots you elected to office...the same one's who have Hancocks nose sticking out of their rear-ends.

I worked at Constellation until very recently, in fact I left a good company (Crown Central)to work at CE because I thought I was going to such a wonderful place to work if you would have listened to the Head Hunter and the crew at CE interview me. I have never been in such a disorganized place in my whole life. All they care about is buying, buying, buying, and don't care what a mess they leave behind for the employees to clean up.

Mr. Hancock,
Isn't your blog entry here an example of the journalistic lynching based on rhetoric, rumor, inuendo, and speculation that triggers a massive selloff? Your defensive response to my earlier comments could be interpreted as masking your guilt for complicity in this loss of billions of stockholder dollars. Mayo isn't the only guilty party here and you aren't the only columnist guilty of this journalistic lynching of Constellation

big damage to the name of Constellation, but at somehow i believe in you maybe some people doesn't see it but it is a the topic we should talk. They said it is a bad allegation but for me you just telling the truth. The fact is Constellation had wagered on rising energy prices through the first half of the year.