State tries to supress Constellation deal benefits
Why is Gov. Martin O'Malley's Energy Administration trying to suppress testimony requested by his own Public Service Commission on the benefits of letting a French company help build a nuclear plant in Maryland? If you didn't already think politics and not policy were driving the PSC's review of the deal, here is the latest evidence.
The PSC staff hired London Economics International to analyze the agreement by Electricite de France to invest $4.5 billion in Constellation Energy Group's nuclear business. (Constellation owns Baltimore Gas & Electric.) Specifically, LEI's Julia Frayer was asked to determine 1) whether Constellation would be hurt by credit-ratings downgrades if regulators block the deal; 2) whether a new nuclear unit at Calvert Cliffs giving Maryland needed electricity depends on EDF's investment; and 3) whether BGE customers would benefit from lower prices. In response Frayer said things such as:
The likelihood of a ratings downgrade to both CEG [Constellation] and BGE [Baltimore Gas & Electric] is less if the transaction is completed than if it is not.
And:
It appears essentially certain that [Constellation and EDF] will pursue the development of [Calvert Cliffs 3] if the... transaction is approved.
And:
In 2016, demand-weighted annual average energy prices [for Maryland electricity customers after Calvert Cliffs 3 opens] drop by 12% [compared with what they would be without the new Calvert Cliffs unit]... I have estimated the savings over the eight year analysis period to average $141 million per year. This represents an approximately seven percent reduction in wholesale energy costs relative to the cost without CC3.
Great! Say yes and let them start building. More electricity supply equals lower electricity prices. But the Maryland Energy Administration is trying to get Frayer's findings wiped out.
"The State of Maryland and the Maryland Energy Administration hereby move for the exclusion of the testimony of Julia Frayer and Michael M. Schnitzer," says the motion. (Schnitzer is Constellation's expert.) Then it goes on to trash the measurement of benefits in dollar terms as "pseudo-science." And it pretty much tries to discredit the entire report.
What's the point of having a professional PSC staff and experts if you're going to ignore what they say?







Comments
How long can this idiocy continue? The MEA wants renewables. If they get what they want, then we get dramatically higher electric bills.
Posted by: Noah Thingur2 | September 16, 2009 10:34 PM
Constellation is a VERY bad deal for citizens...
Posted by: Polar Bear | September 16, 2009 11:24 PM
If Bob Ehrlich were governor, The Sun would be running front page articles about the blatantly obvious political conceit on display here. Why hasn’t The Sun been more outspoken about what is at stake for ratepayers, the future of clean energy, jobs, investment, taxes and revenue for the state? Why hasn’t someone at The Sun written a series about the impact of this major investment and generating construction project and what it potentially means to Maryland if the deal goes forward or is killed by the governor and his PSC? If this was “Ehrlich’s PSC”, I’ll bet The Sun would be blasting his administration and running story after story regarding the positive impact this deal would have on citizens, taxpayers and ratepayers.
You people should be ashamed of yourselves. You’re no better than O’Malley – in fact you’re worse because you know what the EDF deal means to the State – as does the governor. The difference is the governor thinks nothing about shoving the citizens under the bus to further his career. The Sun just doesn’t have the guts to call him on it and write about it.
Posted by: mikez12 | September 17, 2009 7:35 AM
Boy – it’s nice to see journalists actually reading source documents.
You should also note in Constellation’s response that the court opinions the state and MEA (and OPC) cite in support of their motion to dismiss the testimony all relate to actual court trials, where an unsophisticated jury might be swayed by testimony that hasn’t first been “vetted” by a judge.
But the Maryland General Assembly specifically exempted PSC proceedings from court rules of evidence that the State, MEA and OPC cite as their reason to dismiss this testimony:
PUC Article 3-101(b):
Commission procedures.- The Commission is not bound by the rules of evidence or procedure of any court.
Why? Because theoretically the Commissioners, as full-time paid professionals – and unlike citizen jurors – are able to sift through all the evidence presented to them and reach a reasoned, unbiased conclusion.
So even if every other argument the State and MEA make about the witnesses’ testimony were true (which certainly attacks the PSC staff for ever hiring these experts in the first place), it doesn’t matter! Maryland law explicitly allows the PSC to run their proceedings on their own terms.
Amen to your most important point:
“If you didn't already think politics and not policy were driving the PSC's review of the deal, here is the latest evidence.”
Posted by: Concerned Reader | September 17, 2009 9:19 AM
OPC also moved to strike portions of Frayer's testimony. PSC denied the motions.
Posted by: mdenergygal | September 17, 2009 9:59 AM
So glad to see our taxpayer dollars being used so wisely. "Let's pay someone to do a report to tell us stuff we already know. Oh, but let's not talk about it in public!" Even my young children understand the concept of waste.
Posted by: CharmCityMa | September 17, 2009 10:31 AM
The Maryland Energy Administration has been doing everything possible to ensure that no new sources of electricity are built in Maryland and no new transmission lines are built to bring electricity here. Then we will have no choice but to do what they want which is to cut electricity usage in the face of increased demand.
Look at their energy 'plan'; fifty pages of cutting back and limiting usage and not a single page of providing more supply.
Posted by: tom wilson | September 17, 2009 11:28 AM
"Constellation is a VERY bad deal for citizens..."
Care to elaborate?
Posted by: time2change | September 17, 2009 11:55 AM
Jay,
Thanks for reporting on this story. Now can we get a reporter to dog Gov. O'Malley until he explains why he is against carbon-free electricity generation being supplied to Maryland residents?
Posted by: Dan | September 17, 2009 12:06 PM
Meanwhile, NJ homeowners can expect lower natural gas prices this winter: http://www.nj.com/business/index.ssf/2009/09/nj_natural_gas_suppliers_to_re.html
Posted by: Bill | September 17, 2009 12:10 PM
Unfortunately we are forgetting two very important facts: 1.) since we have a water shortage it is not practical to build any new nuclear power plants, it takes a huge amount of water to cool these plants; 2.) the security risk that these power plants pose is not worth taking on the added security that it would entail. Unfortunately most people are only thinking of the savings that nuclear power plants will generate not the risks involved.
Posted by: Jeannette Bartelt | September 17, 2009 12:30 PM
Wow the s__t really would have flown if Ehrlich had tried to do this!
Is this legal?
Great reporting Jay.
There maybe hope for THE SUN yet.
Posted by: jay | September 17, 2009 12:52 PM
If it adds more risks wouldnt that also means it would create new jobs? I dont like constellation one bit, however savins plus job creation
= a rebounding economy. But like slots lets sit on it for a few more years and let all the other states around us take all our revenue we could be getting. The republican vs. Democrat is getting very old for us younger generation. Repubilcans and Dems have ruined my generations future. You work for the people, start thinking about us not your careers, and lets make it where you can only serve 8 years in congress just like the president. You carreer politicians are career theives.
Posted by: Aaron Nocar | September 17, 2009 3:25 PM
This is a case that is being litigated. In litigation, parties move to strike testimony all the time. There is nothing illegal or nefarious about it. It's called trial strategy.
Posted by: mdenergygal | September 17, 2009 5:12 PM
Jay--
There is no one involved in this entire situation with an ounce of credibility (except you, Jay)!! Not Mayo Shattuck and Constellation, not the PSC, not the governor's office. Very disgusting.
Posted by: charlie | September 17, 2009 5:24 PM
As much as I despise CEG, I think that another 1600MW of safe, clean power from Calvert Cliffs can only be a good thing.
Posted by: willie hank | September 17, 2009 9:39 PM
mdenergygal - maybe not illegal, maybe not nefarious, but very, very illuminating
Jeannette b - 1) the new reactor uses 2% of the water used by the current reactors, 2) TWO REACTORS EXIST ON THE SITE ALREADY - how much more security will be needed? Have you ever heard of economies of scale?
Posted by: BigMike | September 17, 2009 10:48 PM
Solar energy is the future while other sources of renewable energy will be kind of complementary. But we need to discuss and follow electrical contractors suggestions while installing solar panel and fulfilling our electrical needs.
Thanks to author.
Posted by: Electricians | September 18, 2009 5:12 AM
Mr. O'Malley-
I am a life long Democrat and even participated in your election efforts in Harford County. After witnessing your politically motivated antics over the past two years, you have lost me for good. I am now embarrassed I ever voted for you and that I actually convinced some of my Republican friends to do the same.
Your article this week in The Sun was full of lies and propaganda like I have never seen. It must be nice to know that you appointed 4 out of the 5 members of the Maryland PSC while they review the Constellation - EDF partnership. I thought that as a tax and rate payer that funds the PSC, they were supposed to be an impartial jury to balance the importance of having good businesses thrive in the State of Maryland while protecting of the citizens of Maryland. I imagine it's hard for the 4 members to be impartial since you handed them their jobs. A case in point, I wrote you personally several months ago about this very matter, and instead of getting a response from your office, I received a letter from Chairman Douglas R. M. Nazarian. I did not write to the PSC, I wrote to you.
Your letter to The Sun regarding the Constellation - EDF partnership had virtually no truthful statements. Here is a list of facts you should have mentioned about yourself:
1) You know nothing about the free market of energy supply and demand. When you ran for office 4 years ago, you guaranteed the people of Maryland that you would control their cost of energy. If you could do that, you would be the most powerful person in the world.
2) You don't care about the importance of having successful companies thrive in Maryland and the vital role that they play by employing thousands of Marylanders and supporting non-profit organizations with millions of dollars in donations.
3) You have no problem reneging on previous, lawful agreements with businesses.
4) All you care about is getting re-elected and you will spew inaccuracies non-stop to accomplish that goal.
I look forward to voting for whoever runs against you next year.
R.G. Nagy
Posted by: R.G. Nagy | September 18, 2009 2:42 PM
R.G. Nagy is my hero. I could not have said it better myself - at least not without expletives.
I am a lifelong Democrat but I swear I would vote for Rush Limbaugh before I'd cast a vote for O'Malley again. The CEG/EDF charade proves that he would let the state slide into a cesspool if it helped his re-elction bid. If CEG doesn't play ball by dumping money into his campaign chest, no deal, no reactor, no jobs, no revenue, no investment in the state. I'm no CEG fan but it's easy to see that the governor is the biggest rat in the barn. At least CEG plays by the rules and Mayo has integrity that O'Malley lacks.
Posted by: mikez12 | September 18, 2009 4:39 PM
With our advanced lifestyles,regardless of the owner don't you think we should advance power generation.It will take years to build and everything will change along the way.Slow down on sucking the life out of the planet.Somebody else always seems to make the money...
Posted by: Byran L. | September 20, 2009 9:35 AM
J. Bartlett can you tell me what water shortage we have? The bay and it's tributaries seem to be large enouggh to me.
Posted by: LC | September 20, 2009 9:54 AM
Is there somewhere I may be able to find the actual documented court case?
Posted by: J S | January 18, 2010 2:42 PM
the same people who voted for O'Malley probably voted for Obama.
by the way how is that working out for you?
Wish you had your vote back?
You voted for change and that is all we will have left over from our paychecks after these two guys get done.
Posted by: chuckster | January 19, 2010 10:12 AM