CEG Constellation Energy Grp. Common Stock

BALTIMORE, Jan. 17 /PRNewswire-FirstCall/ -- Constellation Energy (NYSE:CEG) today released the following statement regarding the release by the Maryland Public Service Commission (PSC) of its January 17, 2008, Interim Report to the Maryland General Assembly on Stranded Costs, Competitive Transition Charge Payments and Nuclear Decommissioning: Constellation Energy is reviewing the Maryland PSC's report, but it is immediately apparent that the report is based upon flawed analyses. Furthermore, the report is an attempt to rewrite the true history of what was a complex, multi-stakeholder process and the resulting settlement agreement that included the PSC, PSC Staff, the Office of People's Counsel (OPC), the Maryland Energy Administration and at least a dozen other interested parties. "While we have just begun the process of reviewing the Maryland PSC's interim report, it would appear upon initial review that this PSC report, which was prepared without public comment or review, misstates and omits numerous facts and is based on flawed assumptions," said Mayo A. Shattuck III, chairman, president and chief executive officer of Constellation Energy. "Overall we're concerned that this report will have a detrimental effect on Maryland, especially at a time when energy-related investments are so essential for this state. "Constellation Energy has complied with the spirit and letter of the 1999 legislation and settlement," continued Shattuck. "We operate with integrity, transparency, and a sense of mission and pride. Any allegations or innuendo to the contrary in the report is flatly and demonstrably false. "We will continue to work with the Maryland PSC to ensure fair, legal public policy that balances the interests of all stakeholders," added Shattuck. "While Constellation Energy will continue to be a willing participant in any productive dialogue, we will unequivocally reject any mischaracterization of our actions. "When invited to be part of a productive process that intends to improve current regulations or laws, Constellation Energy, as it has in the past, will dedicate itself to being a positive part of that process," said Shattuck. Initial review of the PSC's report by Constellation Energy reveals many deficiencies and omissions, including the following: -- It wrongly assumes that those stakeholders involved in the 1999 deregulation legislation and subsequent settlement process did not know what they were doing. The 1999 Commission and the parties in the case were competent and highly professional. Certainly, the Commission and the parties knew the difference between before- and after-tax dollars and between present and future values. Such basic concepts are routinely used in regulatory proceedings. -- It wrongly suggests that the Maryland General Assembly should consider attempting to undo cases fully litigated to final judgment in the Maryland Courts. The stranded cost issue was fully adjudicated twice - both at the Circuit Court for Baltimore City and Maryland Court of Special Appeals - with a final judgment upholding the settlement. In fact, the Courts determined that those involved did "a commendable job" in reviewing and approving the settlement. -- It fails to adequately address the recent expert testimony of the PSC Staff and OPC who testified that residential customer bills were no higher than they would have been had there been no stranded costs. Stranded costs did not increase residential customer bills; in fact, residential customer bills were decreased 6.5 percent and frozen for six years as a result of the settlement. -- It wrongly attempts with hindsight to "cherry pick" parts of a decade- old settlement. The restructuring settlement had many components, including a six-year rate freeze which provided in excess of $1 billion in benefits to ratepayers. It is improper to focus only on select portions of the settlement. -- It omits the fact that the 1999 settlement relieved ratepayers of the risks and obligations associated with maintaining and upgrading the plants. Constellation Energy has been or will be required to invest $2.7 billion in capital expenditures in the plants during the period 2000-2010. -- It omits the fact that Baltimore Gas and Electric Company (BGE) gave up more than $400 million in revenue associated with accelerated depreciation and regulatory assets. -- The report overlooks the fact that inter-company transactions related to stranded costs were for the benefit of BGE and had no impact on customer bills. The report's criticism of these transactions falls under the category of "no good deed goes unpunished." -- The Commission and the parties understood the workings of nuclear decommissioning as it had been examined in various regulatory proceedings and BGE has been filing annual decommissioning reports since 1985. -- The Calvert Cliffs nuclear decommissioning trusts comply with the U.S. Nuclear Regulatory Commission requirements, which are designed to ensure adequate funding for decommissioning. -- The Commission report is misleading with respect to ratepayer liability for nuclear decommissioning; for example, it seems to wrongly suggest that ratepayers would be responsible for decommissioning costs for a third unit at Calvert Cliffs. -- It wrongly suggests that the Maryland General Assembly should ignore well-established boundaries between federal and state jurisdiction. Constellation Energy (http://www.constellation.com/), a FORTUNE 125 company with 2006 revenues of $19.3 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 78 generating units located throughout the United States, totaling approximately 8,700 megawatts of generating capacity. The company delivers electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland. DATASOURCE: Constellation Energy CONTACT: Media, Robert L. Gould or Debra Larsson, +1-410-470-7433, or Investors, Kevin Hadlock, +1-410-470-3647, or Janet Mosher, 1-410-470-1884, all of Constellation Energy Web site: http://www.constellation.com/ Company News On-Call: http://www.prnewswire.com/comp/084087.html

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