Wednesday, April 26, 2006

Yes On Constellation Merger With Florida Power & Light

AAEA supports the proposed merger of Constellation Energy Group with Florida Power & Light because we beleive it will give financial strength to Constellation, which can be beneficial to Maryland ratepayers and provide a larger pool of capital for environmental retrofits. We clearly understand the resentment generated by the proposed rate increases, but we lay most of the blame for that on the flawed rate freeze that was included in the 1999 utility deregulation legislation. Freezing rates was contrary to the free market approach that deregulation was supposed to accomplish. At least Governor Ehrlich has evidently negotiated a reasonable option to spread the increase out over time. Politics is preventing deregulation from working in many states.


AAEA is impressed that Constellation is pursuing a nuclear power future by proposing to build new capacity at the current Calvert Cliffs location. They also purchased two nuclear power plants in upstate New York. If the planned merger is completed, Constellation will become the nation's third-largest nuclear operator. We like this business model because it is going in the direction of utilizing technology to directly reduce carbon dioxide, smog, acid rain and mercury emissions. The Maryland Public Service Commission should approve the merger request. (Constellation Energy Group is Baltimore Gas & Electric's parent company).

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