Two utility behemoths have announced their intention to merge and the union will have a significant impact on the state of Maryland.
This week, the boards of directors for Exelon Corporation and Maryland-based Constellation Energy Group (CEG) announced they have signed a definitive agreement to combine the two companies in a stock-for-stock transaction,
“The resulting company will retain the Exelon name and be headquartered in Chicago,” a CEG press release stated. “The agreement brings together Exelon’s large, environmentally advantaged generation fleet and Constellation’s industry-leading, customer-facing businesses, creating a platform for growth and delivering stakeholder benefits.”
The merger is subject to federal and state approval. Among the entities that must give approval are the Federal Energy Regulatory Commission and the Nuclear Regulatory Commission. The stockholders of both companies must also approve the deal.
One of CEG’s properties is Calvert Cliffs Nuclear Power Plant in Lusby.
“For more than 30 years, Calvert Cliffs has contributed to our economic stability and been part of the cultural fabric of our community,” stated Calvert County Commissioners’ President Susan Shaw [R]. “Its presence has been an integral factor that allows our citizens to maintain an outstanding quality of life. Additionally, Constellation Energy has proven to be a caring and committed corporate citizen. Based on this ongoing, outstanding positive relationship, we [commissioners] support the proposed merger.”
Additionally, CEG is a holding company for Baltimore Gas and Electric (BGE), which provides electricity to 1.2 million Maryland customers. Approximately 7,000 BGE customers are located in northern Calvert County.
Under the proposed merger, a $100 credit will be given to each BGE residential customer within 90 days of the deal’s finalization.
Maryland Governor Martin O’Malley [D] stated the planned merger “marks a significant development in the ever-changing energy industry.”
O’Malley noted that the transaction will need the approval of the Maryland Public Service Commission. “We will participate actively in those proceedings to ensure that the transaction is in the best interest of Maryland ratepayers.”
The governor further noted the joint announcement followed news earlier this week “that BGE’s rates will be falling even further beginning in June 2011.”
“The combination of these two companies will drive innovation and value for customers,” stated CEG President and CEO Mayo A. Shattuck III. Under the merger plan, Shattuck will become Exelon’s executive chairman while Exelon President and COO Christopher M. Crane will become CEO. Exelon’s current chairman and CEO, John W. Rowe, will retire once the transaction is closed.
Officials for both companies are hoping to have the transaction done by early 2012.
