WASHINGTON – With annual revenues of more than $14 billion, energy provider Constellation Energy, the only Baltimore company in the Fortune 500, is on its way to merging with Chicago-based Exelon Corp.
The deal received conditional approval from the Maryland Public Service Commission Friday afternoon.
“We are pleased that the Maryland PSC has approved our merger with Constellation, and we accept the additional conditions that the commission has imposed,” said Exelon President and COO Christopher M. Crane.
On Thursday, the Nuclear Regulatory Commission allowed Exelon to acquire control of Constellation Energy’s stake in five nuclear reactors, including two at the Calvert Cliffs Nuclear Power Plant in Lusby. The NRC said that public safety will not be adversely affected by the merger, and that it does not expect there to be a staff turnover at the nuclear power plants.
Exelon spokesperson Paul Elsberg agreed saying, “The merger will have no impact on the operations of Calvert Cliffs.”
There are 40 conditions attached to the approval of the merger. These include the creation of a $113.5 million customer assistance fund to invest in energy efficiency and assistance to low-income households; and a $100 rate credit to customers of Baltimore Gas and Electric, a local utility company that is a subsidiary of Constellation Energy. BGE headquarters will remain in Baltimore and there shall not be a net job loss at BGE due to “involuntary attrition” for the two years following the merger, according to the commission’s 116-page order.
Exelon will be required to create 285-300 megawatts of additional power generation in the state by 2022 to compensate for the combined company’s increased share of the wholesale power market. In addition, the company will divest some of its power plants by transferring the right to operate them to other companies. The company also promised to provide $32 million for development of off-shore wind energy in Maryland.
Before the announcement, attorney Paula Carmody, head of The Maryland Office of People’s Counsel, which represents Maryland’s residential utility customers, expressed concern about the merger, and said it could lead to excessive “concentration of ownership” in the local wholesale power markets. She had wanted the payout for BGE customers to be $200.
The People’s Counsel released a statement saying, “The commission order today imposes significant conditions on the companies for the public interest, and importantly for us, to offset potential harms and provide specific benefits to BGE customers who will be directly affected by the merger.”
The merger is not yet complete. The Federal Energy Regulatory Commission must also approve the deal. It is expected to make a decision by April, said Carmody.