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Constellation Mulls Legal Action

The chairman of the state's largest electric utility told his employees today that the company is prepared to challenge the legality of bills passed by the General Assembly and predicted the company would prevail in court.

Constellation Energy Group Chairman Mayo A. Shattuck III said in an e-mail that the legislature has "underestimated the value of our proposals, while others fail to appeciate the reality of today's energy markets."

Maryland lawmakers have passed two bills to hold up Constellation's planned merger with a Florida power company. The measures are meant as leverage in negotiations over electricity rate hikes that have dominated the final weeks of the General Assembly session.

In his most extensive public comments on negotiations to avert an electricity crisis, Shattuck says the future of the company can not be "overly influenced by an election-year political debate."

"This means we may be forced, if certain legislation stands, to undertake a legal challenge."

If the merger is called off, he continues, "I'm confident Constellation Energy can pursue an independent course."

Shattuck's e-mail came as he met privately with legislative leaders in Annapolis to try to come to an agreement to gradually phase-in rate increases of as much as 72 percent for customers of Constellation's Baltimore Gas and Electric Co. Pepco customers would see a 38.5 percent rate hike, which could be phased in, as well.

Even if negotiators reach a compromise before Monday, Senate President Thomas V. "Mike" Miller Jr. (D-Calvert) said, "it's not going to be pleasant" for ratepayers.

By Ann Marimow  |  April 7, 2006; 6:08 AM ET
Categories:  General Assembly  
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