Tomorrow's editorials: A Constellation deal
Here's a preview of an editorial we're working on. Let us know what you think. The best comments will appear alongside it in the print edition.
After months of political posturing, legal maneuvering, strong-arm tactics and heated rhetoric, Constellation Energy Group and Electricite de France on Monday accepted the conditions imposed by the Maryland Public Service Commission on the proposed sale of half of Constellation's nuclear business, resulting in an agreement that looks like a good deal for Baltimore Gas and Electric customers -- and the $100 rate credits they are to receive are the least of it.
We get legal protections to prevent BGE from being harmed should Constellation's finances take a turn for the worse, as they did last year when the company neared bankruptcy; measures to prevent Constellation from extracting dividends from BGE that the utility can't afford; an infusion of cash to help shore up BGE's standing; and a delay in requests for rate increases. In terms of BGE's long-term stability and the reliable supply of power in Central Maryland, those provisions may be the most important ones.
We also get a strong possibility that Constellation and EDF will move forward with a third nuclear reactor at Calvert Cliffs. While that won't benefit BGE customers as directly as it would have if Maryland had never deregulated the electric industry, it would still substantially increase the amount of power generated in the state and, the laws of supply and demand being what they are, help hold down rates in the long term. Plus, it would help alleviate an energy supply imbalance in the state and do it without adding greenhouse gases to the atmosphere. And even if Calvert Cliffs 3 doesn't happen soon -- or ever -- we still get the U.S. headquarters for EDF, which is seeking to start building nuclear plants across the country.
The deal offered some reassurance that the Public Service Commission is able to act independently despite significant political pressure from Gov. Martin O'Malley and others. The commission ignored some of the governor's demands, including that it limit Constellation CEO Mayo Shattuck's compensation -- a worthy goal, perhaps, but not the PSC's business -- and modified others to make them more reasonable.
Finally, there's the $100. It doesn't begin to soften the rate shocks we've seen over the last few years, but at a time when family budgets are tight, $100 isn't so bad.







Comments
Pittance I say
Turn over your BGE bill and please notice the customer service charge of $7.50 each and every month for NOTHING, NIL, ZERO energy delivered into my home. $90.00 a year. That $7.50 customer service charge was placed there by our political leaders.
I can't get pass this charge 3 years ago, and they are going to give me $100 buckaroos?
Give me a break.
Wake up people before it's too late.
Posted by: Carole | November 2, 2009 12:33 PM
Carole it is too late.
OMalley is governor and he certainly came to our rescue
on BGE rates!
OMalley campaigned against BGE rate increases and lo and behold after he got elected he was impotent to do anything about it.
Thanks for the lies Marty.
THE SUN certainly bought his lies as THE SUN endorsed the boy governor.
Ehrlich had the better deal on the table than OMalley but oh well the truth never works in Maryland!
Posted by: jay | November 2, 2009 1:27 PM
I guess we will see. Already I noticed that the $200 back to BGE customers has been reduced to $100.
Posted by: Dunn | November 2, 2009 1:40 PM
A delay in requests for rate increases huh? So they'll be back to get their 100$ and then some. From when on did you become a proponent of nuclear energy? Do we know where we are going to put all the nuclear waste that will ensue from EDF setting up headquarters in Maryland and building reactors across the lower forty eight and beyond? Have we forgotten the Three Mile Island catastrophe and Chernobyl? What kind of future are we bequeathing to our children who will be sitting on piles of radioactive waste, victims of cancer and other diseases? We should be conserving energy, sending EDF back to France, giving Mayo Shattuck the heave ho after his pay check has been cut and most importantly we should not revel that our ever escalating energy needs will be met. We should be asking what we can do as consumers to reduce our excessive demands for power so that the robber barons in the electricity business and their colluding political counterparts will not play these farces to mollify our justified outrage.
Skeptictothecore
Posted by: Skeptictothecore | November 2, 2009 1:52 PM
There ARE those willing to sell their souls to the boy gov for $100.
Posted by: Fed Up | November 2, 2009 2:14 PM
skeptictothecore-
your type of uninformed opinion is exactly what has gotten us in this situation in the first place. There are thousands of nuclear plants around the world and one had an accident. Technology is worlds ahead of 3-mile island. The fact is, its safer for the enviornment and us then traditional power. Consider only the higher rates of asthma and other maladies in this area due to high concentration of pollutants from coal burning plants.
As for the waste, we have Yucca Mountain. If the conspiracy theorists would stop fighting a losing battle, we could safely deposit it there.
Posted by: ben | November 2, 2009 2:21 PM
Now that O'Malley has extracted his pound of flesh from Constellation, maybe he and the legislature can just leave electricity alone. Every year that they flirt with re-regulation is another year that out-of-state energy providers stay away from offering true competition to Maryland. If the politicians would stop mucking around with energy policy, Marylanders would finally get competitive rates. If they really move ahead with re-regulating electricity in 2010, all that will do is drive away competiton and raise everyone's rates even higher!
Posted by: Energy Choice | November 2, 2009 2:33 PM
How many Yucca mountains for the nuclear waste that will be generated? No state wants to be a nuclear waste repository Ben. The people of Nevada don't see eye to eye with you. Don't say they are ignorant. We haven't solved the problem of nuclear waste. Coal may not be great but nuclear energy's waste is a major drawback. Your attitude seems to be what's not in my backyard and what's not imminent or immediate doesn't bother me.
skeptictothecore
Posted by: skeptictothecore | November 2, 2009 4:05 PM
Is the Sun being paid off? Anyone who cares is upset. Are you just fodder?
You ban people from commenting, threaten them if they call, sue those who care...? Who are you?
Posted by: Dunn | November 2, 2009 4:35 PM
Andy, you hit the nail right on the head. The $100 is the least of the benefits BGE ratepayers should expect from the conditions of approval the PSC placed on the deal. Note that today, as a result of the PSC's ruling insulating BGE from CEG, Standard & Poor's increased BGE's credit rating to BBB+. That is higher than any other major utility in the state, and will mean that BGE will have cheaper access to capital when it needs it. That's good for all BGE customers.
Posted by: mdenergygal | November 2, 2009 5:14 PM
Ben --
Sadly, you know virtually nothing about nuclear, if your comments today are an example.
1.) There are not "thousands" of nuclear power plants worldwide. There are about 435 operating, with another 35+ in various stages of approval or construction. Many older ones have already closed.
2.) You are astonishingly wrong that only "one had an accident." Google these and you will see how wrong you are: Windscale; Brown's Ferry; Tokaimura; Fermi-1; Kruemmel; Three Mile Island; Chernobyl. These are only the "worst" accidents -- a complete list would exceed space limits here.
3.) While proposed designs are better than Three Mile Island, in the past year alone two advanced designs that the industry is pinning its future on -- the French/European EBR reactor, and the Westinghouse AP-1000 -- were demonstrated to have design flaws. Two weeks ago the federal Nuclear Regulatory Commission refused to grant the AP-1000 a design license.
4.) You are also wrong about Yucca Mt., NV. DOE geologic data shows this site FAILS two of the four prime international standards for high-level radioactive waste facilities (in a seismically active area; has an oxidizing environment).
5.) You are however dead-on right a about coal. Which is why today's informed energy activists advocate the Carbon-Free/Nuclear-Free program of the Institute for Energy and Environmental Research (www.ieer.org).
There are more things in heaven and earth than are dreamt of in your philosophy, Ben. It's time to enter the 21st Century of energy (see Jan 2008 and Nov. 2009 Scientific American), which is why we also say, "No Nukes. No Coal. No Kidding!"
Posted by: DaveKraft | November 2, 2009 9:25 PM
Skeptictothecore, the fact is that Yucca Mountain is the best place for our nuclear waste. You are also forgetting that with the new technologies we have today, we can keep on REUSING nuclear waste until it is so depleted that no current known or design-board reactor can use it anymore.
Yucca Mountain has been MALIGNED by false information and overblown worries. It's as one geologist said: "For the nuclear waste put in Yucca to be a danger, a 2 mile wide asteroid would have to hit it... and then, none of us would be around to worry about it!"
Posted by: Christopher | November 3, 2009 2:00 AM
Andy,
The only thing missing from the above editorial was the board's perfunctory endorsement of Gov O'Malley's bid for a second term.
BTW, when will you be annoucing your endorsement of Gov O'malley and Mayor Dixon?
Posted by: Waiting for the Sun to Set | November 3, 2009 8:32 AM
Does everyone forget that BGE already paid out millions back to it's customers? They shouldnt have to do it again. Has verizon ever gave you back money for your phone bill? Second this deal is with EDF and constellation. They are buying a stake in the nuclear part of BGE's parent company. This does not affect BGE customers and EDF already stated that their interests are in nuclear only. They will never see anything that deals with BGE. O'malley is trying "flex his politcal muscle" again to keep his position. Bge should not have to give more money back to it's customers. You pay for what you use and you have options on who your provider is. The rates are pretty comparative to other utilities. Remember this deal will bring jobs and revenue that the state of MD needs badly. So in this economy people need to stop being selfish and look at what is good as a whole. This deal should have been done a long time ago but the MPSC commission is putting there nose to much into where it doesnt belong. MD needs all the businesses here they can get and with the politics in this state it's a wonder it can keep any busineses around.
Posted by: Jen | November 3, 2009 11:01 AM
Take a breath, remember the french are not a very good country to do this venture with, because They have little respect for America, They are 40% Muslim and are allowing muslim laws and courts to override there own courts. We have to wander how this government can long stand with the widening division of it's peoples.
We Americans should gather together to unite under one thing we should be able to agree with. This is our Country, mistakes of the past and all. But, We can not fix anything by selling out to other Countries. We are a smart and hard working people, we need to see more of what we have in common than what we dont.
Why couldn't the people of that state buy the half of the companyand realize the benefits forever. We need control of our own destiny. Not Government for us, but Government by us.
Sincerely,
Mark
Posted by: Mark | November 3, 2009 12:27 PM