Maryland General Assembly leaders gave their blessing to a lawsuit settlement the state reached with Constellation Energy, an agreement that will give Baltimore Gas and Electric customers a $170 rebate this fall and save them from another $1.5 billion in future costs.

“This is a huge victory to consumers,” said House Speaker Michael Busch, standing next to the governor whom he praised for the solution. “It’s a day I didn’t think would come,” Senate President Thomas V. Mike Miller said. “They were able to turn this around in less than a year,” putting new aggressive regulators in the Public Service Commission compared with the industry-cozy leaders appointed by Gov. Robert Ehrlich.

The settlement largely resolves a highly contentious relationship between O’Malley and the utilities he promised to rein in, but lawmakers must pass enabling legislation in the next 10 days to implement the plan. Competing lawsuits on both sides would be dropped, and no future suits would be permitted.

The settlement includes absolving ratepayers from $1.5 billion in costs to take a Calvert Cliffs nuclear reactor out of service. It will also make the southern Maryland site a priority for construction of another reactor producing some of the cheapest electricity.

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Under the agreement, the PSC will gain greater authority to examine Constellation’s books, and two independent outside directors would be added to BGE’s board of directors. In turn, the settlement and enabling legislation would give Constellation greater flexibility to attract capital and expand its properties, including allowing 20 percent of the company’s stock to be sold to an investor without PSC approval.

BGE also promised to not ask for more than a 5 percent increase in electricity distribution charges next year.

Senate Finance Committee Chairman Thomas Mac Middleton, who oversees utility legislation, called the settlement “a win-win situation.”

“It’s much better to resolve these things through the negotiation process than the courts,” he said. “In the courts, you have a winner and a loser.”

Sen. E.J. Pipkin, an Eastern Shore Republican who has been a frequent critic of BGE and Constellation, said he still had a lot of questions. “The devil’s in the details,” Pipkin said. “To say there are no strings attached is unrealistic. Let’s find out what they are.

“When are they going to find time to get this through the legislature?” Pipkin asked.

O’Malley’s chief lobbyist Joe Bryce said the only hurdles to passage were “time” and “mischief.”

llazarick@baltimoreexaminer.com

jmalarkey@baltimoreexaminer.com