As part of the terms between the recent merger between Exelon Corp. and Constellation Energy Group, Exelon agreed to provide the state of Maryland with $113.5 million. The Maryland Public Service Commission, which oversees all business acquistions in the state, approved the deal on the condition that the combined companies establish a customer investment fund worth half of its project synergy savings. The MPSC introduced the stipulation so that current customers with Baltimore Gas and Electric Co., which is owned by Constellation, could benefit from the valuable deal.
The purchase or sale of a business in Maryland is typically legally complex. Proposed transactions often must meet the approval of regulatory bodies like the MPSC as well as shareholders for the companies involved. Merger or purchase proposals must be repeatedly modified in order to meet certain stipulations and ensure that both parties are satisfied with the legal implications of the sales terms.
The MPSC will ultimately decide how the investment fund will be allocated. It has scheduled a hearing in which it will listen to proposals from a number of parties, including the city of Baltimore, the state of Maryland, Baltimore Gas and Electric Co. and the Maryland Office of People's Counsel.
The state recently outlined its proposal, which would see $44 million being spent on services for energy consumers, like weatherization and replacing furnaces for low-income househoulds. An additional $22 million would go toward assisting small businesses in lowering their energy costs, with the remaining money funding miscellaneous tasks like creating mortgage incentives for Maryland residents who improve energy efficiency in their homes.
A spokesperson for Maryland's governor said the state hopes to use the money to create long-lasting effects that will continue to benefit energy consumers and the state at large after the money has been spent.
Source: Baltimore Sun, "Maryland proposes how it would spend $113.5 million in BGE fund," Jamie Smith Hopkins, June 15, 2012