GBC urges caution as lawmakers consider intervening in Constellation merger

Dear Members of the Maryland General Assembly:

Respectfully submitted below is a position statement regarding the proposed enactment of legislation granting the General Assembly authority to review and approve or disapprove the merger between Constellation Energy and FPL Group, Inc.

The Greater Baltimore Committee believes that it is reasonable and appropriate for BGE and legislators to be engaged in deliberations concerning the projected electricity rate hikes that could occur as a result of rate cap legislation enacted in1999 by the General Assembly.

We recognize that the delivery of gas and electricity is a highly regulated industry and that the General Assembly has a legitimate duty to serve as a watchdog to protect consumer interests at a time when rate caps are being lifted.

However, the Greater Baltimore Committee urges you to proceed very cautiously in exercising this duty.

In our opinion it would be wrong for lawmakers, in order to gain leverage in the deliberations, to rush to pass legislation that would interfere with or effectively delay the proposed merger of Constellation Energy with the FPL Group.

While such legislation would no doubt be a well-intended approach by lawmakers who feel compelled to take action to protect their constituents, the negative results could far outweigh any benefits to the state and its citizens.

It is unlikely that such an 11th-hour law, imposing the General Assembly’s will on a business transaction that has been achieved in an entirely legal manner, would positively impact electricity rates. It is more likely that it would negatively impact them.

Of even more concern is the long-term damage to the Maryland business climate that would be done by the image, projected to the local and national corporate community, of our state’s legislature arbitrarily and impulsively intervening in a legitimate corporate business transaction. This is not an image that would be well received by companies looking to locate, expand, or to do business in Maryland.

The Greater Baltimore Committee respectfully urges members of the General Assembly to pursue deliberations with BGE in a more conventional manner. Such a course of action would be more effective in achieving a resolution that would benefit the citizens of Maryland without severely damaging our business reputation.

Sincerely,

Donald C. Fry, Greater Baltimore Committee

Donald C. Fry
President
Greater Baltimore Committee

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