I attended a public open meeting with the Maryland Public Service Commission this week about an almost double rate increase for gas and electric. These are the same people to whom I ranted against the last rate hike and against the BGE/Exelon merger. Each time they simply go ahead and allow what hurts the people and enriches the shareholders. BGE HAS A HISTORY OF ENRICHING THEIR SHAREHOLDERS THAT WOULD TAKE YOUR BREATH AWAY.....WHO ARE THESE 1%. THEY ARE THE ONES CONTROLLING BALTIMORE PUBLIC POLICIES.
This was my question for Baltimore's corporate/public media:
Yesterday provided a prime example as to why Baltimore needs a public media station and not one captured by corporate interests as with WYPR. Fraser Smith completely neglected the primary government news item of the week.....the BGE rate increase. Did you know there were public meetings this week with the Commission regarding almost doubling the rate for electric and gas to pay for Exelon's past operational expenses and their future infrastructure development? I asked the Commission where they advertised and they said....in the legal section of the newspaper and on their Maryland Public Service Commission website. How many people peruse those two places? Almost no one....those that do will be the shareholders that benefit from this bonanza. How many are against it? Almost everyone. Remember early in O'Malley's first term as governor when he suggested this same rate increase when working with then Constellation Energy and the outrage was so great he quickly changed directions and ran for the second term as governor with saying he fought to protect the people from this very rate increase? THAT'S RIGHT....HE LIED AGAIN. HOW DOES O'MALLEY KEEP ALL THESE LIES STRAIGHT? THE SAME WAY LANCE ARMSTRONG DID....
Needless to say no one was at any of the public meetings for this rate increase because no one knew about the meetings. You see, they didn't want the public outrage this time. I spoke and started with this fact: on the west coast where democracy is alive and kicking, an issue like doubling the cost of domestic energy would have been in all media weeks before the public comment. Radio, TV, and news print would have had the issue daily with talk shows debating the pros and cons and community groups speaking about how all of this affected them. Yes, even the shareholders of Exelon could have spoken as to the windfall this will be for their $1 billion a year profit corporation. In Baltimore and Maryland.....absolute silence.....just like election primaries there is no democracy. I told the Commission an empty room shows Maryland does not want a participatory democracy.
The point I made in the rate increase is this: Before the merger between BGE and Exelon, all public officials and indeed the print newspapers assured the public there would be no rate increase with the merger. THEY PUBLICLY STATED NO RATE INCREASE WITH THE EXELON MERGER. It is malfeasance to deliberately misinform the public towards policy that is against public interest....which this is. Secondly, I brought up the $1 billion settlement from rate payer fraud by Constellation several years ago that should have transferred to Exelon with the merger. Nothing has been said of this $1 billion settlement throughout the merger deal and I told the People's Council that the people need to know the status of that $1 billion and why it is not tapped for these funds rather than another rate increase..
The People's Council is appointed by the State Attorney General and if the AG has suspended Rule of Law to protect corporate wealth, you know his appointments will be working to protect shareholder and corporate wealth over people as well. I will be watching to see if that People's Council makes my points loudly and strongly!
I WANT TO REINTRODUCE THE HISTORY OF MARYLAND CITIZENS BEING PREYED UPON BY AN UNREGULATED PRIVATE ENERGY COMPANY. THEY LITERALLY OWE THE RATEPAYERS BILLIONS OF DOLLARS PER SETTLEMENTS AND AGREEMENTS THAT HAVE NEVER BEEN MET. EACH TIME A GOVERNOR SIGNS A DEAL MOVING THE COMPANY FURTHER INTO THE HANDS OF EVER LARGER CORPORATIONS, THE RATEPAYER IS TOLD WE WILL GET $100 REBATE OR $200 REBATE. WE ARE OWED A TREMENDOUS AMOUNT OF MONEY AND WE WANT IT NOW!!!! FORGET THE RATE INCREASE!!!
VOTE YOUR INCUMBENT OUT OF OFFICE!!!!
THESE GUYS ARE DESPICABLE!!!
Deregulation deck stacked against ratepayers
March 15, 2006|By JAY HANCOCK | JAY HANCOCK,SUN COLUMNIST
Don't blame deregulation for the 72 percent pop in electricity bills that Baltimore Gas and Electric customers will see after July 1, says BGE.
"It is not deregulation that has failed," BGE spokesman Rob Gould said on WYPR radio last week. "The real cause for the price increase is the world energy market."
But for all of BGE's and parent Constellation Energy's portrayals of themselves as victims of high energy costs, the facts show not only that regulation would have softened this kind of rate shock but that deregulation was fixed from the start in their favor.
For one thing, deregulation was what exposed BGE ratepayers to the world energy market by cutting them off from the low-cost coal and nuclear generators BGE used to own.
On Sunday, I wrote that electricity bills in Michigan are a third less than what BGE's will be because regulators stopped deregulation short and forced Detroit Edison to keep its coal and nuclear plants, passing the low cost to households.
This column revisits the heart of deregulation - the 2000 sweetheart deal that shifted BGE's generators to parent Constellation and that is now being re-examined by the General Assembly.
The transaction - basically a paper shuffle - morphed what should have been benefits for households into profits for Constellation and bonuses for its bosses.
The generation plants changed hands on another fateful July 1 - July 1, 2000. One day they were owned by the heavily regulated BGE. The next day they were owned by Constellation, which could then peddle their megawatts to anybody and eventually force BGE and ratepayers to bid for juice in the open market.
Of course, you're saying, Constellation must have paid BGE ratepayers a fair price for those valuable facilities.
When Potomac Electric Power Co. sold its generation plants to Mirant Corp. in 2000, the resulting $424 million capital gain paid for, among other things, basically seven weeks of free electricity for Pepco customers in Maryland.
BGE customers, alas, got no such gain. For some reason Constellation got to take over BGE's plants at book value. No cash changed hands. No premium was paid. No gains flowed back to customers.
In fact, it was just the opposite. You, the electricity customers, paid Constellation to take the valuable plants off BGE's hands!
Like other power companies, Constellation argued that the plants would become uncompetitive after deregulation and that electricity customers should compensate them, essentially helping to pay the facilities' mortgages.
The result was the "stranded-cost" charge, added to every bill you paid for the last six years. The charge, which disappears after June, has put an extra half-billion dollars in Constellation's pocket.
Of course the plants didn't become uncompetitive. They soared in value like Google stock. As rising gas and oil prices have driven up the market price for megawatts, efficient coal and nuclear plants have become gold mines.
The most striking example is the Calvert Cliffs nuclear generation plant, which Constellation put on its books in 2000 for $1 billion. Last fall Calvert Cliffs was worth between $2.6 billion and $4.3 billion, according to consultant Global Energy Decisions, which calculates "blue book" values for generation assets.
And don't forget that most of the half-billion-dollar stranded-cost bailout that Constellation collected was linked to Calvert Cliffs, so its cost basis for the plant is actually even lower than $1 billion.
That's a ton of money ratepayers left on the table.
No wonder Constellation's profit went up 45 percent last quarter. No wonder Constellation bosses are seeing millions of dollars in stock option gains.
To be fair, there are several things to be said on Constellation's behalf.
Along with the 2000 transfer of the generation plants came a 6.5 percent rate cut for BGE customers, which lasts until July 1. Even so, Pepco customers in Maryland got the same rate cut - plus free kilowatts from the sale of Pepco's generation plants. The 6.5 percent rate cut should have been just a start.
Another valid point Constellation will make is that capital investment by current shareholders and management-driven efficiencies are key reasons for the huge jump in its plants' value.
Across the country, new operators "have really turned around what had been relatively mediocre performance among nuclear plants in the past," says Gary Hunt, president of Global Energy Advisors, a Global Energy Decisions affiliate.
No doubt. But that doesn't explain all of the gains made by Constellation. And it doesn't change the fact that ratepayers got a deal that amounted to having to pay down the mortgage but not being able to benefit when the property doubled or quadrupled in value.
Stranded cost? I call it a stranded rate cut for BGE customers.
Come on, Constellation. Give back the half-billion - as legislators have begun discussing - to soften the 72 percent rate shock. And admit that deregulation has worked a lot better for you guys than us.
YOU SEE BELOW THAT THERE WAS A SETTLEMENT THAT HAD CONSTELLATION PAYING A REBATE TO RATEPAYERS OVER 10 YEARS STARTING IN 2007. THAT MEANS WE WOULD RECEIVE IT UNTIL 2017. WE INSTEAD RECEIVED $100
FROM THE MERGER WITH EXELON AND THAT WAS TERMED A PERK OF THE MERGER......IT WAS SIMPLY THEM PAYING A BILL OWED BY CONSTELLATION.
THE PEOPLE ARE TOLD O'MALLEY WON $100 FOR US AS A RESULT OF THE MERGER.......IT WAS MONEY ALREADY OWED.
Mar 3, 2008, 8:11pm EST Constellation Energy files suit against state over $386M in rebates
Staff Baltimore Business Journal
Baltimore-based Constellation Energy Group filed a federal lawsuit late Monday to recoup about $386 million in ratepayer rebates the company alleges were illegal.
Filed in Baltimore's U.S. District Court, the lawsuit seeks to stop the state from continuing to give $38.6 million a year for 10 years to customers of Baltimore Gas & Electric Co., the Constellation-owned utility, designed to offset a proposed 72 percent rate hike.
Lawmakers approved the rebates in 2006, which ratepayers began receiving January 2007. They also capped the rate increase at 15 percent from July 2006 through July 2007.
The lawsuit also asks the court to uphold a 1999 deregulation agreement between Constellation, BGE and the state. Constellation officials said two Maryland court rulings have already upheld the 1999 decision by lawmakers on electric restructuring.
"A contract is a contract, and the state must abide by the rule of law," said Mayo Shattuck III, CEO of Constellation Energy Group (NYSE: CEG) in a statement released Monday. "We take this action reluctantly and only after pursuing alternative approaches to resolving these disputes."
The Maryland Public Service Commission is holding hearings on the impact of the state's decision in 1999 to deregulate the power industry. Constellation and BGE executives and PSC officials have argued over a report the PSC released alleging that BGE overcharged ratepayers by about $1 billion following deregulation. In a Feb. 6 hearing, BGE officials refuted the report and told regulators that ratepayers received a benefit of about $2 billion.
The state of Maryland stepped in Feb. 29 with its own federal lawsuit filed in Baltimore City Circuit Court in an effort to safeguard the rebates and keep Constellation from going to court to get them back.
THE 1999 AGREEMENT TO DEREGULATE WAS A CATASTROPHE FOR THE PUBLIC ALL ACROSS THE COUNTRY AS ALL OF THESE UTILITIES IMMEDIATELY STARTED PREYING UPON PEOPLE. THE AGREEMENT TIED $2.7 BILLION TO CALVERT CLIFFS NUCLEAR PLANTS FOR UPGRADES TO BE SPENT BY 2010...THAT'S 10 YEARS. WHEN A DEAL WAS CUT TO GIVE THESE NUCLEAR PLANTS TO CONSTELLATION THE REQUIREMENT TO PAY FOR THOSE UPGRADES DISAPPEARED AND SUDDENLY THE RATEPAYER WAS PAYING SO MUCH IN EACH BILL FOR THESE UPGRADES. THEN WE FIND OUT THAT THE AMOUNT WE ARE PAYING WILL PROVIDE A SUPER-SIZED PROFIT OVER THE COSTS CONSTELLATION WILL INCUR FOR ANY UPGRADE IF THEY EVER HAPPEN. THE LAST I'VE HEARD IS THAT EXELON IS LOOKING TO BE RID OF THESE PLANTS AND HAS YET TO START ANY UPGRADES.
SO BILLIONS OF DOLLARS ARE OWED THE RATEPAYERS ONE WAY OR ANOTHER AND THESE POLITICIANS WITH O'MALLEY THE LAST TO HAVE HIS HAND ON IT HAVE THE AGREEMENTS SO CONVOLUTED AS TO MAKE IT IMPOSSIBLE TO FOLLOW. YET, O'MALLEY DOESN'T HESITATE TO CALL FOR THE RATE INCREASE EXELON IS DEMANDING!! WE ARE TALKING ABOUT SOME OF THE DIRTIEST POLITICIANS AROUND!!!!
VOTE YOUR INCUMBENT OUT OF OFFICE!!!
ELECTRICITY Panel Questions Cost Of Nuclear Shutdown
The Pubic Service Commission says that electric customers are being overcharged $1.4 billion for the decommissioning of the Calvert Cliffs Nuclear Power Plant.
(By James A. Parcell -- The Washington Post)
By Lisa Rein Washington Post Staff Writer
Wednesday, February 27, 2008
Constellation Energy Group will likely receive a $1.4 billion windfall because the company is charging customers more than it will eventually need to decommission the Calvert Cliffs nuclear plant, Maryland utility regulators said yesterday.
The overpayment estimate came as Public Service Commission members grilled attorneys for the Baltimore-based energy giant on the terms of the 1999 deal to open Maryland's regulated electricity market to competition. Residential electric bills have soared since rate caps began to come off four years ago. The commission and lawmakers are searching for relief for customers.
Attorneys for Constellation said at yesterday's hearing in Baltimore that it is too early to determine how inflation and investment returns will affect the cost of dismantling Calvert Cliffs. But they said electricity customers gambled when the deregulation deal was signed that the money they would pay would cover the costs, exceed them or fall short.
"It could be a windfall, but that's how a hedge works," said Michael Naeve, a Constellation attorney.
The deregulation law now under review allowed Pepco and Baltimore Gas and Electric to sell their power plants to unregulated companies. In BGE's case, the plants, including Calvert Cliffs in Lusby, went to the utility's parent company, Constellation. BGE is Maryland's largest utility, serving 1.1 million electric customers in the Baltimore area, Prince George's, Howard, Anne Arundel and Montgomery counties.
Constellation took over the nuclear plant, but did not assume the federally mandated costs to dismantle it -- an expensive, lengthy process scheduled for one reactor in 2034 and the other in 2036. State regulators are raising questions now about how much is appropriate for customers to pay and whether the agreed-upon sum, which comes to about $18 million a year, will be enough to get the job done or put too much in the company's pocket.
"I assume you didn't intend to profit from this aspect of the  settlement," Commission Chairman Steven B. Larsen told lawyers for Constellation at the hearing. If customers continue to contribute decommissioning payments in their monthly bills, "It appears they will be potentially hugely overpaying by $1.4 billion," Larsen said. "There's potentially a vast difference between the actual ratepayer liability and the costs that may be incurred by Calvert Cliffs."
Larsen said after the hearing that the commission will recommend to the General Assembly whether some of the money can be recovered.
Constellation executives declined to appear at a similar hearing on decommissioning costs three weeks ago, and regulators were unable to get many of the answers they were seeking from attorneys for BGE, which remains a regulated company. But Constellation agreed to appear yesterday, quieting a war of rhetoric that had erupted between the company and Gov. Martin O'Malley (D) over disputed terms of the deregulation deal.
The company has accused the commission of creating a hostile regulatory climate by trying to undo parts of the deal.
Much of yesterday's hearing focused on how Constellation is calculating the costs to dismantle Calvert Cliffs, a process that will require the cleanup of radioactively contaminated plants and equipment and the removal of radioactive fuel.
Constellation has scaled down the estimated costs in reports to the Nuclear Regulatory Commission since 2003. Naeve told commissioners that last year the difference from previous calculations came to about 4 percent. "Time will bear out" the real price, he said.
But Larsen said customers were on the hook for more payments when the company received permission from federal regulators in 2000 to extend the life of the plant, which originally was scheduled to close sometime between 2014 and 2016. "They signed onto a potentially never-ending liability," he said.
Regulators also said yesterday that about $160 million of the money customers already have paid for decommissioning is being held by an unregulated affiliate of Constellation, and questioned whether it is being put aside for the nuclear plant.
Naeve said the money is being used for "general corporate purposes" but would be allocated for decommissioning when it is needed.
HERE WE HAVE THE SAME CORPORATION COMMITTING YET ANOTHER CRIME AGAINST RATEPAYERS, THIS TIME IN NATURAL GAS....AND THE FINES ARE SO SMALL THAT THIS COMPANY WILL DO IT AGAIN AND AGAIN.
FERC warns power, natural gas traders on manipulation
- iBy Scott DiSavino and Eileen O'Grady
NEW YORK/HOUSTON | Thu Mar 15, 2012 6:43pm EDT
(Reuters) - The top U.S. energy regulator on Thursday warned power and natural gas traders that the agency has beefed up enforcement activity to discourage market manipulation, citing last week's record fine against Constellation Energy.
That's the message Federal Energy Regulatory Commission (FERC) Chairman Jon Wellinghoff told Reuters the agency is sending with a record $245 million fine against Baltimore-based Constellation Energy.
"The penalty amount will send the signal that you will not profit from market manipulation," Wellinghoff said. "It will cost you dearly. There is no profit to be made in manipulating the market; it will be a huge net loss for you."
Constellation agreed to pay a $135 million civil penalty and to disgorge unjust profits of $110 million. It was the largest penalty FERC has imposed since Congress expanded its enforcement authority in 2005 to prevent another electricity crisis like the one that hit California in 2000 and 2001.
Before the Constellation settlement FERC had only issued $172 million in fines since 2007.
FERC's enforcement staff determined Constellation engaged in manipulation in New York from September 2007 to December 2008, resulting in economic losses to market participants who bought and sold energy in the New York and New England power grids.
Specifics of the trading violations outlined in FERC's agreement with Constellation should also be viewed by industry as a message, commissioner Cheryl LaFleur told Reuters.
"The details of the settlement agreement which sets out what the alleged market manipulation was as well as the compliance that we are expecting from the companies going forward - whether intended as a message or not - it is a good message for people who are market participants to learn from," LaFleur said.
"It's good reading," she said.
More than 10 years after the collapse of Enron and the California energy crisis, which was exacerbated by illegal trading activity and cost companies billions of dollars, the need for constant market oversight remains, Wellinghoff said.
"It will always be necessary to have oversight and enforcement of these markets," Wellinghoff told Reuters. "You have to make sure people are trading and operating fairly and openly. There are going to be some people to test the limits and others who will go beyond the limits and actually engage in fraud, manipulation and abuse."
FERC has been building its enforcement office in the years since the California crisis.
"We're now maturing to a full robust office that has the capability to ensure these markets operate fairly for consumers," Wellinghoff said.
BEEFING UP ENFORCEMENT
Adding staff with analytical skills and energy market experience will allow the enforcement division "to dive deeper into the data and be able to bring cases where they are appropriate," he said.
Wellinghoff credited former New Mexico U.S. Attorney Norman Bay, named to lead the FERC enforcement office in 2009, for prosecutorial and energy market expertise.
As part of the Constellation settlement, FERC plans to grant $1 million to six regional transmission grid operators (RTOs), including New York and New England, to enable them to better analyze trading and price data.
"The RTOs are in a good position to identify discrepancies," FERC Commissioner John Norris told Reuters. "They deal with the power markets every day. We're trying to enhance our capacity to watch the market by enhancing the RTOs ability."
"My hope is people will realize there are serious repercussions for manipulation. We have a very strong investigations team, beefed up with a new division of analysis and surveillance. So the end goal is we have less to investigate," Norris said.
CONSTELLATION DENIES WRONGDOING
Constellation CEO Mayo Shattuck said the company did not admit to any wrongdoing but agreed to settle the case to avoid litigation and pave the way for its $7.9 billion merger with Chicago-based energy company Exelon Corp.
But Wellinghoff said in a statement that FERC would hold senior managers of "all companies" accountable for monitoring compliance. He said companies would be expected to refrain from making uneconomical trades on one position in order to lift the value of a different position.
FERC's enforcement unit said Constellation's inappropriate activity involved losing money in the New York physical power market to favorably influence payments it received under a separate financial market.
In a statement, Wellinghoff said companies would be expected to respond truthfully to questions about their trading, and also to realize that FERC "will be vigorous in using its anti-manipulation authority to protect consumers."
In addition to the civil penalty and profit disgorgement, Constellation had to remove the employees involved in the questionable trading activities from any position related to wholesale energy trading.
Shattuck said last week that Constellation believed its trading practices "were lawful portfolio risk management transactions." Wellinghoff's statement said "clearly that is not the case."
"The Stipulation and Consent Agreement sets forth a detailed description of the transactions that I believe Constellation knowingly and willfully engaged in that form the basis of enforcement staff's conclusion that Constellation engaged in market manipulation, fraud, and misrepresentation," Wellinghoff said.
DO YOU THINK THAT HANDING MARYLAND RATEPAYERS TO THIS BEHEMOTH WAS IN THE PUBLIC INTEREST? DO YOU THINK THE DIVESTMENT BELOW REALLY PROTECTS RATEPAYERS? DOES A DOUBLING OF RATES MAKE THAT CASE?
VOTE YOUR INCUMBENT OUT OF OFFICE.
THE DEAL CREATED WEALTH FOR SHAREHOLDERS ONLY AT OUR EXPENSE!!!
Justice Department Requires Divestiture in $7.9 Billion Merger of Exelon Corporation and Constellation Energy GroupDivestiture of Three Electricity Generating Plants Will Preserve Competition for Customers Throughout Mid-Atlantic Region
WASHINGTON — The Department of Justice announced that it will require Exelon Corporation and Constellation Energy Group Inc. to divest three electricity generating plants in Maryland in order to proceed with their $7.9 billion merger. The department said that the transaction, as originally proposed, would substantially lessen competition for wholesale electricity, ultimately increasing electricity prices for millions of consumers in the mid-Atlantic region.
The department’s Antitrust Division filed a civil lawsuit today in U.S. District Court in Washington, D.C., to block the proposed transaction. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the department’s competitive concerns and the lawsuit.
“Competition in wholesale electricity markets is vital to the economic well-being of consumers and businesses,” said Sharis A. Pozen, Acting Assistant Attorney General for the Antitrust Division. “These divestitures will preserve that critical competition for the benefit of electricity customers throughout the mid-Atlantic.”
According to the complaint, the merger would create one of the largest electricity companies in the United States with total assets of $72 billion and annual revenues of $33 billion, and would combine the assets of two large competitors in the mid-Atlantic region. Together, the companies would own between 22 and 28 percent of the generating capacity in the densely populated mid-Atlantic area encompassing Delaware, the District of Columbia, New Jersey, eastern Pennsylvania, and parts of Maryland and Virginia. The department said that the combination of the assets would enhance the incentive and ability of the merged firm to raise wholesale electricity prices and reduce output.
Under the terms of the proposed settlement, the merged firm must divest three electricity plants, which in total provide more than 2,600 megawatts of generating capacity. The plants to be divested are Brandon Shores and H.A. Wagner in Anne Arundel County, Md., and C.P. Crane in Baltimore County, Md.
Exelon is incorporated in Pennsylvania and has its headquarters in Chicago. Exelon owns the PECO utility of Philadelphia and the Commonwealth Edison utility of Chicago. Exelon had $18.6 billion of revenues in 2010.
Constellation is incorporated in Maryland and has its headquarters in Baltimore. Constellation owns the BG&E utility of Baltimore. Constellation had $14.3 billion of revenues in 2010.
As required by the Tunney Act, the proposed settlement and the department’s competitive impact statement will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to William H. Stallings, Chief, Transportation, Energy and Agriculture Section, Antitrust Division, U.S. Department of Justice, 450 Fifth St. N.W., Suite 8000, Washington, D.C. 20530, 202-514-9323. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed settlement upon finding that it is in the public interest.