Baltimore Gas and Electric Files Comprehensive Plan to Help Customers Manage July 1 Rate Increase
April 20 2006 - 5:48PM
PR Newswire (US)
Customers Who 'Opt-In' to Plan Could Initially Limit Typical
Residential Increase to $13 Per Month BALTIMORE, April 20
/PRNewswire-FirstCall/ -- Constellation Energy (NYSE:CEG) today
announced that its subsidiary, Baltimore Gas and Electric Company,
has filed a comprehensive rate stabilization plan with the Maryland
Public Service Commission (PSC) that would allow BGE's residential
electric customers to reduce and defer the pending July 1 rate
increase. "After many weeks of discussions about a very complex
issue, we believe that we have reached a positive solution for our
customers," said Mayo A. Shattuck, chairman and president of
Constellation Energy, BGE's parent company. "The rate stabilization
plan is optional; it provides the time for customers to plan for
the inevitable impact of a global energy crisis." If approved by
the PSC, the plan would allow BGE customers to select or "opt-in"
to a rate stabilization program that would reduce the initial
increase and spread out the remainder. Those who opt-in would see a
rate increase of 19.4 percent July 1. While the dollar amount of
the actual increase would vary depending on usage, a typical BGE
residential customer (830 kilowatt hours monthly) who opts-in to
the plan would see an increase of about $13 per month. On June 1,
2007, opt-in customers would receive a projected 25 percent
increase, and move to market rates on Jan. 1, 2008. The deferred
amount of the rate increase would be repaid through May 2009;
limited-income customers would have an additional year to repay the
deferred amount, through May 2010. "BGE residential customers have
been paying rates 6.5 percent below those in 1993, and we've always
been sensitive to the hardship our customers could face when the
state-mandated rate caps expired," said Kenneth W. DeFontes,
president of BGE and senior vice president, Constellation Energy.
"Like all utilities nationwide, we've been impacted by the
realities of the global energy marketplace and we needed to develop
a solution that preserved the financial integrity of BGE so we can
respond to storms and invest in our network. The plan we filed with
the PSC today achieves both goals - customers have an option to
initially lower their bills and we're also maintaining adequate
levels of funding so we can continue providing our 1.2 million
customers with safe and reliable service." The rate stabilization
plan will be subject to public review at the PSC in the days ahead.
While details of the enrollment process are still being finalized,
it is anticipated that the customer sign-up period to opt-in would
begin around May 15, pending PSC approval. BGE will conduct a
comprehensive communications program to inform customers of the
plan and payment options, including direct mail, extensive
newspaper and radio advertising, in-person community meetings, and
enhanced online and customer service support. "We will make every
effort to educate and inform our customers and to make the sign-up
process as simple as possible," said DeFontes. "Customers will have
both the time and the factual information they need to decide if
they want to opt-in to the program." Even after the price moves to
market rate in July, BGE's total rate for electricity will be lower
than those at many utilities serving the Mid- Atlantic and most of
the Northeast. The plan filed with the PSC today is not contingent
upon Constellation Energy's proposed merger with FPL Group, Inc.
But the merger could still greatly benefit BGE customers. In the
final days of the 2006 Maryland General Assembly session,
Constellation Energy reached an agreement with the Governor and
legislative leaders that would have provided $600 million in
benefits to BGE customers, spread over 10 years. A bill including
that proposal died on the Senate floor in the final moments of the
session, but Constellation Energy is standing by this offer and
will contribute $600 million over 10 years to help lower rates for
all residential customers, including those who opt-in to the rate
stabilization plan, subject to the close of its merger with FPL
Group. BGE (http://www.bge.com/) delivers electricity and natural
gas to approximately 1.2 million electric and approximately 620,000
gas customers throughout Central Maryland. Constellation Energy
(http://www.constellation.com/), a FORTUNE 200 company with 2005
revenues of $17.1 billion, is the nation's largest competitive
supplier of electricity to large commercial and industrial
customers and the nation's largest wholesale power seller.
Constellation Energy also manages fuels and energy services on
behalf of energy intensive industries and utilities. It owns a
diversified fleet of more than 100 generating units located
throughout the United States, totaling approximately 12,000
megawatts of generating capacity. Additional Information This
communication is not a solicitation of a proxy from any security
holder of FPL Group, Inc. or Constellation Energy. Constellation
Energy intends to file with the Securities and Exchange Commission
a registration statement that will include the joint proxy
statement/prospectus of Constellation Energy and FPL Group and
other relevant documents to be mailed to security holders in
connection with the proposed transaction. WE URGE INVESTORS TO READ
THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT
DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT FPL GROUP, INC., CONSTELLATION ENERGY
AND THE PROPOSED TRANSACTION. A definitive proxy statement will be
sent to security holders of FPL Group and Constellation Energy
seeking approval of the proposed transaction. Investors and
security holders will be able to obtain these materials (when they
are available) and other documents filed with the SEC free of
charge at the SEC's website, http://www.sec.gov/. In addition, a
copy of the joint proxy statement/prospectus (when it becomes
available) may be obtained free of charge from FPL Group
Shareholder Services (700 Universe Blvd., P.O. Box 14000, Juno
Beach, FL 33408-0420), or from Constellation Energy, Shareholder
Services, 750 East Pratt St., Baltimore, MD 21202. This
communication shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended. FPL Group, Constellation Energy and their
respective directors and executive officers of FPL Group and
Constellation Energy and other persons may be deemed to be
participants in the solicitation of proxies in respect of the
proposed transaction. Information regarding FPL Group's directors
and executive officers is available in its proxy statement filed
with the SEC by FPL Group on April 5, 2005, and information
regarding Constellation Energy's directors and executive officers
is available in its proxy statement filed with the SEC by
Constellation Energy on April 13, 2005. Information regarding J.
Brian Ferguson, a director of FPL Group elected since the date of
the filing of the 2005 definitive proxy statement, can be found in
FPL Group's filing on Form 10-Q dated Aug. 4, 2005. Other
information regarding the participants in the proxy solicitation
and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the joint
proxy statement/prospectus and other relevant materials to be filed
with the SEC when they become available. DATASOURCE: Constellation
Energy CONTACT: Media: Robert L. Gould, +1-410-234-7433, or
Investor: Kevin Hadlock, +1-410-783-3647, both of Constellation
Energy Web site: http://www.bge.com/ Web site:
http://www.constellation.com/ Company News On-Call:
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