US state OKs tie-up of Constellation Energy, France's EDF

31st October 2009, Comments 0 comments

The US state of Maryland on Friday approved a plan for France' EDF Group to take a stake in Constellation Energy Group, clearing the final hurdle for a new nuclear power plant in the state.

Washington - The US state of Maryland on Friday approved a plan for France' EDF Group to take a stake in Constellation Energy Group, clearing the final hurdle for a new nuclear power plant in the state.

US regulators earlier this month had green-lighted the joint venture plan for the French state-controlled company to acquire nearly half of Constellation's nuclear assets.

The companies say the nuclear joint venture is critical to the proposed construction of a new nuclear generation plant at Constellation's Calvert Cliffs Nuclear Power Plant, which they say would represent one of the largest industrial development projects in the East Coast state.

The Maryland government announced Friday conditional approval of the joint venture, depending on a one-time rate credit of USD 110.5 million to residential ratepayers of Constellation's Baltimore Gas and Electric Company (BGE) subsidiary.

Among other conditions to ensure the transaction caused "no harm to consumers," Constellation was required to invest  USD 250 million in cash in BGE by June 30.

"Constellation Energy and EDF confirm that the companies are in receipt of today's order issued by the Maryland Public Service Commission. Both companies have begun the process of reviewing the order," the firms said in a joint statement.

The Maryland authorities fixed a November 6 deadline for the two companies to file a written commitment that they wanted to conclude the agreement.

The companies earlier this month announced they had received all necessary US approvals at the federal level and clearance from the New York Public Service Commission.

Under the USD 4.5-billion deal, EDF Development Inc., a wholly owned subsidiary of EDF, is to acquire 49.99 percent of Constellation Energy Nuclear Group, the Baltimore-based's company's nuclear generation and operation business.

The joint venture plans to build four third-generation EPR (evolutionary power reactor) nuclear reactors in the United States, including the Calvert Cliffs plant.

Constellation owns 3,869 megawatts of nuclear generating capacity in the US.

The French state owns around 85 percent of EDF, the world's biggest producer of nuclear energy.

The proposed joint venture was announced last December.

AFP/Expatica

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