Four regulatory agencies to review EDF, Constellation Energy venture; Maryland clearance not required

By Cristal Cody

Tupelo, Miss., Dec. 17 - The new joint venture between EDF Development Inc. and Constellation Energy Group, Inc. requires regulatory approval from four agencies, Constellation Energy told Prospect News on Wednesday.

Baltimore-based Constellation Energy called off the $4.7 billion merger for all of the company with MidAmerican Energy Holdings Co. and went with a sweetened deal from EDF Development, a subsidiary of French utility provider Électricité de France SA.

EDF Development will buy a 49.99% interest in Constellation Energy Nuclear Group, LLC for $4.5 billion.

Constellation Energy Nuclear Group owns the Calvert Cliffs Nuclear Power Plant in Maryland and the Nine Mile Point Nuclear Station and R.E. Ginna Nuclear Power Plant in New York.

Constellation Energy chief executive and chairman Mayo A. Shattuck III said on an investors conference call Wednesday that consideration was given to a number of variables, including the "structure of the [EDF] proposal to properly position ourselves for regulatory approval."

Shareholder approval is not required, Constellation Energy said.

Regulatory approvals will be needed from the U.S. Nuclear Regulatory Commission, the Federal Energy Regulatory Commission, the New York State Public Service Commission and the Committee on Foreign Investment in the United States, said Constellation Energy spokesman Lawrence McDonnell.

A timeframe to file applications with the agencies has not been set.

"We're hoping to move as expeditiously as possible," McDonnell said.

Although clearance from New York regulators is required for the venture, approval from Maryland regulators is not, he said.

"We intend to thoroughly brief the Maryland Public Service Commission, which we work with closely, but this is a joint venture in just a specific part of the business and it does not require Maryland Public Service Commission approval," McDonnell said.

However, the Maryland commission said in a statement that it could not comment on whether the transaction will require its approval. The commission said it plans to still hold the status conference on Friday that had been scheduled for the MidAmerican buyout.

EDF Group said it has provided Constellation Energy a $600 million interim backstop liquidity facility, which will remain available until all regulatory approvals are received or six months after the investment agreement.

The companies expect the deal to close in six to nine months.

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