Constellation Energy and FPL Group merger remains in limbo

BALTIMORE (Map, News) - The planned $10.8 billion merger of Baltimore-based Constellation Energy Group and Florida-based FPL Group has become bogged down in the uncertainty of a gubernatorial election and the politics of appointed officials.

The next hearing before the Maryland Public Service Commission, which must approve the merger, is scheduled for Nov. 16, but a PSC spokeswoman said that’s subject to change. Part of the problem is interpreting a court decision that reversed a Maryland General Assembly measure to force current members to resign.

“Our attorney is looking at what the court case would mean for the merger,” said Bethany Gill, a PSC spokeswoman.

That interpretation and other factors could alter the schedule.

Robert Gould, a spokesman for Constellation Energy Group, said the company would not comment on the merger other than saying Constellation continues to seek approval from the commission.

In a Sept. 20 letter to Constellation Energy from Maryland Assistant Attorney General Margaret Ann Nolan, the attorney asks the company to clarify claims that if the merger is not closed by the end of the year, potential savings of $21.4 million would not be achieved.

On Aug. 28, FPL Group and Constellation Energy filed revised merger statements with the federal Securities and Exchange Commission. In those documents, Constellation Energy CEO Mayo Shattuck III and FPL CEO Lewis Hay indicated they expected the Federal Energy Regulatory Commission to make its decision by Feb. 2007.

But they added: “Uncertainty surrounding closing of the merger remains. If risks to closing the merger or economics become unacceptable, Constellation Energy and FPL Group could agree to terminate the merger.”

During a conference in New York last week, FPL CEO Lewis Hay told reporters he was becoming a little leery about the merger getting approved in a timely manner because of delays and setbacks in Maryland.

eeldridge@baltimoreexaminer.com

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