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March 23, 2009

Constellation bonuses: Is the damage already done?

It's pretty clear from Constellation Energy Group CEO Mayo Shattuck's statements Friday that the company's decision to abandon a plan to dole out $32 million in bonuses to senior managers was a political one.

Shattuck pointed out that the money was coming from the French firm that's buying Constellation's nuclear business, EDF, and that the money would have no bearing on BGE rates. And unlike AIG, Constellation hasn't gotten any taxpayer money.

"Nonetheless, we have determined that this issue has become a significant distraction to the important long-term benefits for Maryland that our strategic partnership with EDF represents," Shattuck said, adding that the company wants to "remove this compensation issue from the critically important review of our transaction with EDF."

If you needed any proof that Constellation is legitimately worried about re-regulation or state oversight of the EDF deal, look no further. Preliminary votes on partial re-regulation could come as early as today. The question now is whether giving up the bonuses will be enough to stop the anti-Constellation momentum that had been building in recent weeks.

Is the fact that they gave up the bonuses proof of good faith, or is the fact that they were there in the first place evidence that the state needs to keep Constellation on a tighter leash?

Posted by Andy Green at 6:00 AM | | Comments (9)
        

Comments

These people think that the laws and rules do mot apply to them, if people don't realize by now the arrogance and contempt people like the ones who run Constellation have for the waverab=ge citizen than we are all living with our heads in the sand. They are thieves, nothing more , nothing less and not only shouold they be reguleted, those riunning the Comany now need to be replaced, starting with the head thief, Schattuck!!!

How much did Constellation spend on lobbyists last year? Maybe they should cut that budget as well.

"... is the fact that they were there in the first place evidence that the state needs to keep Constellation on a tighter leash?"

Andy, you do realize that this issue is within the scope of the state's investigation into the EDF-Constellation deal, and that the state has expressed concern that the EDF-paid bonuses could signal a "change in control" that may trigger a broader review of the transaction, right? How much tighter a leash are you suggesting?

Well, energygal, they could in fact instigate that broader review of the transaction, which has not yet happened. Or they could move toward wholesale re-regulation. Then again, they could say no harm, no foul and let it go. I'm not suggesting either option, just trying to get a conversation started.

Where will this stop? Who's bonuses are next? Since the taxpayers paid to build BOTH stadiums, we should have some say in the players salaries and signing bonuses if you let this logic play out.

"... they could in fact instigate that broader review of the transaction, which has not yet happened. Or they could move toward wholesale re-regulation."

To your first suggestion, the state would be unwise to undertake that broader review until it rules on the question of whether EDF will be in a position to exercise substantial influence over BGE. To undertake that review before the ruling would open the state to a lot of litigation.

To your second point, I'm not sure how moving toward reregulation (can't "reregulate" wholesale sales, btw - it would be unconstitutional to try) would bear on one private company (or rather, French-owned company) paying bonuses to another private company. Unless that is, you are suggesting the state reacquire the entire existing fleet and thereby knock out EDF's offer.

I wouldn't say that any of the options you outline would necessarily be a good idea, but when has that had anything to do with it?

Good point!

Does anyone have faith in Annapolis to fix this mess?
Didn't they create it with deregulation in 1999?

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Annie Linskey covers state politics and government for The Baltimore Sun. Previously, as a City Hall reporter, she wrote about the corruption trial of Mayor Sheila Dixon and kept a close eye on city spending. Originally from Connecticut, Annie has also lived in Phnom Penh, Cambodia, where she reported on war crimes tribunals and landmines. She lives in Canton.

John Fritze has covered politics and government at the local, state and federal levels for more than a decade and is now The Baltimore Sun’s Washington correspondent. He previously wrote about Congress for USA TODAY, where he led coverage of the health care overhaul debate and the 2010 election. A native of Albany, N.Y., he currently lives in Montgomery County.

Julie Scharper covers City Hall and Baltimore politics. A native of Baltimore County, she graduated from The Johns Hopkins University in 2001 and spent two years teaching in Honduras before joining The Baltimore Sun. She has followed the Amish community of Nickel Mines, Pa., in the year after a schoolhouse massacre, reported on courts and crime in Anne Arundel County, and chronicled the unique personalities and places of Baltimore City and its surrounding counties.
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