Attorney General Gansler, Governor O’Malley File Suit Against Constellation Energy Group
Lawsuit Seeks to Ensure BGE Customers Receive the Credits Owed to
Them Under Maryland Law

BALTIMORE, MD (February 29, 2008) – Attorney General Douglas F. Gansler and Governor Martin O’Malley today announced the State has filed suit in Baltimore City Circuit Court against Constellation Energy Group (Constellation) and its wholly owned subsidiaries, Baltimore Gas and Electric (BGE) and Calvert Cliffs Nuclear Power Plant (Calvert Cliffs). In its suit, the State is asking the Court to find under Maryland law that the credits to BGE customers specified in Senate Bill 1 (SB1) in 2006 are a constitutional and legal act of the General Assembly.

“In the face of rising energy costs, SB1 provided Maryland consumers with much needed relief,” said Attorney General Gansler. “Despite receiving healthy and growing profits over the last several years, Constellation wants to boost its bottom line at the expense of hard working Marylanders. We are asking the Baltimore City Circuit Court to confirm that the protections built into SB1 are lawful and cannot be ignored by Constellation.”

“In this time of economic uncertainty for so many of our families, it is unfortunate that Constellation would seek to further boost its profits on the backs of the working people of our State,” said Governor Martin O'Malley. “The $386 million rightfully belongs to Maryland ratepayers, and we will do everything in our power to make sure that this cost is not passed on to consumers.”

The General Assembly convened in Special Session in 2006 in response to an announced 72% rate hike by BGE. The passage of SB1 during that session provided credits to BGE customers totaling $38.6 million per year for a period of 10 years. In November, 2006, the State and Constellation entered into a standstill agreement that provided that if BGE wanted to sue to challenge SB1, they were required first to provide the State 30 days notice to terminate the agreement.

On January 30th of this year, after the PSC released a report suggesting that BGE and its parent company, Constellation, had received a windfall under the 1999 Settlement to the detriment of consumers, and at the same time Constellation reported substantial profits, BGE provided the State of Maryland 30 days notice that it was terminating the Standstill Agreement and that it would seek to overturn the credits that the General Assembly had provided to consumers in SB1.

Specifically, BGE indicated that after the required 30 days notice to terminate the Standstill Agreement expired, it intended to file a federal lawsuit within five days “to enforce their rights under the 1999 Restructuring Settlement Agreement and to challenge the unlawful takings set forth in SB1.” SB1 provides that any action brought for declaratory, injunctive, or other relief to challenge the constitutionality of any provision of the bill “shall be filed in the Circuit Court of Baltimore City.”

The state contends that BGE’s notice of its intent to file a federal lawsuit represents an attempt to circumvent what SB1 requires—that any lawsuit challenging the law be filed in the Circuit Court in Baltimore City.

See text of complaint here.