EDF approves Exelon-Constellation merger

17 January 2012

French nuclear utility EDF, which is a minority (49%) stakeholder in Constellation Energy Nuclear Group, has reached an agreement with Exelon Corp that will remove its objection to the Exelon-Constellation Energy merger.

EDF said: “After the initial announcement of the Exelon-Constellation merger, EDF made clear that it could not support a merger that put the integrity of its investment in CENG at risk," said Thomas Piquemal, group chief financial officer and head of North America. “After a lengthy regulatory review process in which we actively participated, we are pleased to have reached an agreement with Exelon that protects CENG's operational independence moving forward. We look forward to welcoming Exelon as a partner in this important joint venture."

EDF did not elaborate about how the integrity of its investment in Constellation would be put at risk by the merger, or what operational independence it was referring to.

However, EDF had a public spat with Constellation Energy in 2010 when Constellation cancelled its application for a loan guarantee for its 50:50 nuclear new-build joint venture with EDF UniStar for the USEPR Calvert Cliffs 3, apparently to the surprise of EDF. EDF eventually took over UniStar, although as a foreign company it is legally prevented from owning a US power plant.

In its January statement, EDF did say that the agreement would be filed with the Maryland Public Service Commission 'shortly.'

In late December, the US Department of Justice filed a settlement that could allow the Exelon-Constellation merger to go ahead, provided that the merged firm divest 2600 MW of former Constellation fossil power stations in Maryland: Brandon Shores, H. A. Wagner and C. P. Crane.

Exelon and Constellation made a merger settlement with the State of Maryland, the Maryland Energy Administration (MEA), the City of Baltimore and the Baltimore Building and Construction Trades Council on 15 December.

The merger has been approved by the New York Public Service Commission, the Public Utility Commission of Texas and shareholders of Exelon and Constellation. It also requires regulatory approvals by FERC, the Nuclear Regulatory Commission and the Maryland Public Service Commission.


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