Constellation Energy Group and subsidiary Baltimore Gas and Electric Co. broke no laws and followed state and legal guidelines in power auctions that caused electricity rates to spike two years ago, according to a report by a firm contracted by the state to investigate the auctions.

The findings to the state’s Public Service Commission by law firm Kaye Scholer were dated Oct. 25, but they were made public for the first time Tuesday as lawmakers moved forward with a settlement between the state and Constellation that would end a PSC investigation of the company.

PSC Chairman Steven Larsen said the report’s release had nothing to do with the settlement but that other reports with “legislative deadlines” took priority. Other issues arose when the General Assembly’s session began in January, he said, delaying the release of the Kaye Scholer report to this week.

“The facts relating to the ... auctions do not support a finding that ... prices are unreasonable, unjust, or must be changed in order to protect the public interest,” the report states. “The ... auctions were competitive, and the resulting prices reasonably reflect prices for comparable products in wholesale power markets.”

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The PSC had asked Kaye Scholer to determine whether the state would have standing to file a complaint with the Federal Energy Regulatory Commission over the huge 2006 rate increase, according to the report. The firm concluded that the PSC was “not likely” to succeed with such a claim.

“We’re pleased that the commission found no wrongdoing or irregularity on the part of Constellation as part of that auction, and that the price for electricity was reflective of the market,” Constellation spokesman Rob Gould said.

Leo Burroughs Jr., chair of the Maryland Coalition to Stop the BGE Rate Hike, dismissed the report.

“We’re consistent in our position that there has been a grand conspiracy,” Burroughs said.

Staff Writer Jamie Malarkey contributed to this report.

acahall@baltimoreexaminer.com