Len Lazarick, The Examiner
2006-06-02 09:00:00.0
Current rank: Not ranked

BALTIMORE -

Top Constellation Energy executives sent the leaders of the Maryland House and Senate a detailed 29-page response to the legislators’ request for information about BGE assets, electricity auctions and the compensation of their executives after the proposed merger with Florida Power and Light.

Senate President Thomas Mike Miller and House Speaker Michael Busch had not released the company’s response Thursday, but it was posted as a required financial disclosure on the Web site of the U.S. Securities and Exchange Commission at 10:26 a.m. that day.

Miller and Busch had sought the information to come up with a way to soften the blow of the pending 72 percent electric rate hike.

“In this letter, we voluntarily disclose information which we would not ordinarily put into public view because the information is clearly commercially and competitively important to our businesses,” said the letter signed by Mayo Shattuck III, the chairman, president and CEO of Constellation, and K.W. Defontes Jr., president of BGE.

The letter is full of complicated financial terms and explanations of the utility business, but it seeks to make the basic point that higher energy prices are “not unique to Maryland. It is a worldwide issue that cannot be avoided and can actually be exacerbated by local attempts to cap prices or otherwise deny the reality of how the energy markets work.”

Constellation makes several other points:

» Residential customers saved $1.8 billion in the past six years due to price caps.

» BGE’s prices “are comparable to other utilities in Maryland,” since other companies had already raised their rates.

» The company has been getting a low rate of return on its assets, costing investors and shareholders $500 million.

The company withheld information about the electric auction based on “confidentiality agreements,” but said the prices it got “were typical of other auction results” in the national energy market.

If the merger goes through and Shattuck stays on as chairman of the merged company, he would make $5 million in salary and $13 million in stock.

If terminated, he would get $4.2 million, and other executives would receive more.

The salary figures are important to Miller because he believes the public will be outraged at the payouts and “will demand” reduced electric rates from the company, he said.

Busch, shown a copy of the Constellation response, said he had not actually seen the letter, but his staff was analyzing its contents in order to give him a briefing.

Lisa McMurray, a spokeswoman for Miller, said the Senate president and his staff were analyzing the letter, and it was unclear when Miller would comment on the Constellation response.

llazarick@baltimoreexaminer.com