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Maryland office calls for more concessions in Constellation merger

A proposed merger between the Maryland-based Constellation Energy Group and Exelon Corporation may face more hurdles following a brief filed by the Maryland Office of People's Counsel. The office, responsible for serving as a consumer advocate on utility for the state of Maryland, raised concerns that the companies have failed to show that their proposed deal would not harm Maryland residents, especially customers of Baltimore Gas and Electric, which is owned by Constellation.

The People's Counsel said it "must reject the merger as proposed," but its approval is ultimately unnecessary for the completion of the merger. As such, the two companies have not commented on the office's concerns, continuing to push for support from the Maryland Public Service Commission. The PSC, which must approve all Business acquisitions in Maryland, recently heard final arguments from all parties involved in the proposed deal.

In the brief, the People's Counsel also commented on a recent settlement reached between the merging companies and Maryland's governor, saying that it has not helped the office assuage its doubts about the proposed deal. The governor was previously against the $7.9 billion deal, but now supports the deal after the companies offered an estimated $1 billion in concessions. However, the companies did not agree to provide more rate relief for current energy consumers in Maryland. Current customers of Baltimore Gas and Electric are currently set to receive $100 each in credit. Officials with the People's Counsel have proposed a doubling of that credit, but the governor chose to instead obtain pledges that the merged company will develop renewable energy sources within the state.

Source: Baltimore Sun, "People's Counsel still objects to Constellation merger," Hannah Cho, Feb. 6, 2012

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