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October 9, 2009

Mr. Hancock, you're not funny

Here is part of People's Counsel Paula Carmody's response to my Wednesday column. The column was about the Public Service Commission hearings on EDF Group's proposal to buy half of Constellation Energy's nuclear-power business.

If the investment is approved, Constellation and EDF have said they'll build an $8 billion nuclear-power unit. It would be the biggest single private capital project in Maryland in who knows how long. According to the PSC's own expert witness the plant would lower electricity prices by furnishing a huge new supply of megawatts. The People's Counsel, the PSC and the governor are saying, "Gee, we're not sure." From Carmody's letter:

Once again, I feel compelled to respond to commentary about the pending Public Service Commission proceedings to consider the proposed Constellation-EDF transaction. This time, it is Jay Hancock's feeble attempt at humor in his October column that requires a response...

Mr. Hancock and The Sun continue to present this case as a battle between Governor Martin O'Malley and Constellation CEO Mayo A. Shattuck. This may be good ratings drama, but it unfairly and inaccurately belittles the issues at stake in this case for ratepayers. The coverage also reflects an unreflective acceptance of the companies' assertions about the purported benefits and lack of harm. In particular, this case is about the impact on BGE customers from EDF's purchase of an interest in significant assets of Constellation, including the existing units at Calvert Cliffs. This case is not about building a new nuclear unit at Calvert Cliffs, despite the companies' attempts to link the two, which Mr. Hancock apparently has accepted.


Posted by Jay Hancock at 10:38 AM | | Comments (6)
        

Comments

One wonders if it has ever occured to the PSC that if they don't like the rates being offered to them by BGE they could shop for better rates from other regional electricity providers. If individuals are able to take advantage of competitive rates from WGES and others why could not the PSC?

Well, one really does not have to wonder because this charade has little to do with protecting the interests of utility customers and everything to do with protecting the political interests of Gov. O'Malley.

I think the PSC is just waiting to tell us that the solution to energy shortages will be solved by issuing everyone a stationary bicylce hooked to the grid and being required to pedal all day.

Worked for Mao when he needed all that steel....

"This case is not about building a new nuclear unit at Calvert Cliffs, despite the companies' attempts to link the two, which Mr. Hancock apparently has accepted...

and the effect of which (on rates if not wages) won't be felt for ten years in any case.

On these point at least I think they have you Jay.

If we can accept that building nuclear reactor generating capacity is objectively a net good for Maryland (jobs, rates, retire older plants, etc.) then why aren't we being flooded with proposals to build and run them? One word: site.

Anyone seen Warren Buffet recently?

I do not understand the advocacy for the promises of Constellation Energy. Where is the analysis to support the fantasic claims; cheap energy and job creation. It seems to me that it was not too long ago that we bought the promises that deregulation would bring competition that would drive energy prices to new lows: Maybe for industry, but certainly not for consumers. Before we use snark to vilify those who disagree with us, let us see some hard evidence the Constellation Energy can deliver on its promises and not stick the Maryland rate payers for the cost overruns and the delays in bringing the new power plant on-line!

Dear Paula, this is indeed about our "Wonderful" Governor's battle with Constellation Energy. BGE is a distinct and separate part of the CEG family and in no way is it subject to activities OR costs related to the sale of 49.99% of the Nuclear side of the company to EDF. The customers will not be impacted by the cost of construction of the 3rd plant at Calvert Cliff and further they will not be forced to buy power produced from that plant, if and when it is built. BGE is required under the current laws to purchase power for delivery thru a bidding process and as you know the lower bids will receive the contracts or the PSC would, rightfully, require BGE to justify buying a higher cost supply than they had too. As it stands now I believe that BGE gets about 70% of the power they distribute from CEG. I myself don't understand why Constellation Energy has not told the Governor see you later and moved the corporate headquarters to Delaware to avoid the decidedly unfriendly environment the current Governor has put in place. It could not be that as the Great, Great Grandchild of the FIRST gas utility, the Gas Light Company of Baltimore founded in 1816, in the United States that the big bad utility company has more respect for the citizens of Maryland than its Government does?

I think Mr. Hancock is funny.

Patrick K. Lackey

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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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