GBC’s Donald Fry to Maryland Public Service Commission: Constellation-EDF deal has ‘clear benefits’

Greater Baltimore Committee president and CEO Donald C. Fry urged the Maryland Public Service Commission to make a decision regarding the pending Constellation-EDF deal that allows the state to realize an “unprecedented opportunity to significantly enhance its economy.”

Fry testified at the PSC’s September 17 public hearing at the War Memorial Building in Baltimore. He cited what the GBC sees as “clear benefits” to BGE customers and to the state as a whole that would derive from the completion of the deal now before the PSC between Constellation Energy and the EDF Group – one of the world’s largest developers of nuclear-generated electricity.

Benefits would include lower energy prices, creation of 4,000 construction jobs and 400 permanent jobs, a $4.5 billion private-sector investment in Maryland, and a $56 million company investment in community service, Fry noted.

Under the agreement, EDF would invest $4.5 billion in Constellation Energy and partner with Constellation in building a third nuclear reactor at Calvert Cliffs and in developing the next generation of nuclear power plants in the U.S.

The proposed third Calvert Cliffs nuclear plant would add an additional 1,600 megawatts of power onto the grid that serves Maryland, which “can only be a benefit to a state that already imports more than 30 percent of its power,” Fry said.

“There is a tremendous opportunity here for Maryland to be recognized as a leader in the nation’s new age of energy generation,” Fry said. “Once built, the nuclear power plant will improve grid reliability and reduce reliance on out-of-state energy, which will help lower energy prices.”

The GBC board of directors met with Governor Martin O’Malley on September 16 to discuss the Constellation-EDF deal, emphasize its importance to Maryland’s economy, and voice concerns over the potential negative consequences if the deal was not completed.

O’Malley told the GBC board that he recognizes the overall economic potential of the Constellation-EDF partnership, but that he is seeking “ring fence” protection for BGE’s assets from being arbitrarily appropriated by its parent company, Constellation, and a “guaranteed” public benefit. As he sees it, the deal currently offers “no real benefit to BGE rate payers,” the governor told GBC board members.

“As a business organization, the GBC can see clear benefits from this venture and is confident that that Constellation has submitted an agreement proposal that meets and exceeds the joint requirements of asset protection and public benefit,” Fry told the PSC.

Fry added that the GBC is sensitive about the message Maryland is sending to business investors outside the state who perceive Maryland’s regulatory posture toward the Constellation deal as overly adversarial. “That message is not a positive one,” he said.

“The business community is very concerned,” Fry added. “You cannot attract capital to an unfriendly regulatory environment.”

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