In a letter to reporters, the governor of Maryland said he cannot accept a proposed merger between Maryland energy firm Constellation and Illinois-based Exelon given its current terms. Gov. Martin O'Malley wrote that Exelon has not provided sufficient evidence that the $7.9 billion merger would protect Constellation's energy customers, avoid causing harm to the state and benefit public interest. Under Maryland law, all three qualifications must be met before the deal can continue. He explained that while executives at Constellation could earn millions of dollars from the merger, the deal would move control of the business outside of Maryland, costing the state about 600 jobs.
O'Malley suggested that the Maryland Public Service Commission, which oversees all proposed business sales, require Exelon to take measures to ensure the merger will not result in higher-priced or less-reliable energy for Maryland residents. He also proposed that Exelon be required to implement renewable energy initiatives.
Exelon and Constellation recently pledged to improve incentives for the merger by providing Constellation customers with rate credits and developing more efficient energy sources. The companies have increased their proposed incentive package from $250 million to $515 million and announced plans to develop wind and solar energy infrastructure in the state. The companies say they will build 55 megawatts worth of green energy sources, in addition to 120 megawatts of additional energy generation from natural gas. However, the governor appears to remain unconvinced.
Maryland's Public Service Commission has not commented on the changes. It is currently working with federal regulators to review the deal.
Source: The Washington Post, "Maryland governor says he can't support $7.9 billion Constellation-Exelon deal," Dec. 9, 2011