Md. politicians cost Constellation bi...

Md. politicians cost Constellation billions

There are 51 comments on the Baltimore Sun story from Sep 22, 2008, titled Md. politicians cost Constellation billions. In it, Baltimore Sun reports that:

I am an employee and shareholder of Constellation Energy Group . And the news that MidAmerican Energy Holdings will buy my stock and my employer for $26.50 per share leaves me very disappointed but not ...

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Christopher

Grand Rapids, MI

#1 Sep 22, 2008
Stop blaming the legislators. The fact is that this appeared to be a VERY bad idea, the merger with FPL, at the time when it was nixed.

The fact is, at the time in question, everyone even on the REPUBLICAN side said that this merger wasn't a good idea.
Baltimore Resident

United States

#2 Sep 22, 2008
Boo-hoo! You played the market and lost. BGE is a utility, not your private slot machine. Stop blaming politicians, baby.
WOW

Towson, MD

#3 Sep 22, 2008
AWWW did you some money...I lose almost $300 a month since my bill has tripled in the past year. Welcome to the club!
Drilling in the Gulf

AOL

#4 Sep 22, 2008
Since O'Malley has been involved like any other thing he gets involved in goes bad... now all we have to do is blame it on someone else (prefered option of the O'Malley Admin) or tell everyone that it's the greatest thing that could happen and most of his uneducated supporters will believe it, didn't he do what he said he was going to do about increasing rates? No, because he is a politician (out for himself) and not a statesmen ( for the people )... I wonder which way the wind will blow today?
Yu Gotabe Jo King

Hampstead, MD

#5 Sep 22, 2008
You really should blame Constellation's CEOs for taking major risks with your money. They over leveraged and over extended their credit. And when the investment banks that were backing their risks failed--well, it was good night. If BGE/Constellation had remained a traditional regulated energy company, it wouldn't have been vulnerable. It was the Enron-like energy trading business that made it vulnerable. It made money by gambling on how high energy prices would go (not good for the consumer/rate payer especially when we're dealing with an unregulated interstate monopoly). So, no, I don't think the FPL merger would have saved Constellation; and it would have been a terrible deal for energy consumers--FPL uses mostly imported oil and gas which we all know is very expensive.

"Monday's news about Lehman Brothers' bankruptcy and the fire sale of Merrill Lynch drove investors to raise questions about Constellation's energy-trading business, which works with investment banks (such as Lehman) on energy deals.

While Constellation is still widely seen as a utility company, it gets 83 percent of its revenue from merchant operations, which are not regulated by the state. It trades in electricity, natural gas, coal and other energy products all over the world. Part of that business takes large positions in electricity markets, placing bets on where prices will go.

The business relies heavily on its ability to get financing, which is highly sensitive to Constellation's credit-worthiness.

Standard & Poor's and Fitch Ratings had downgraded Constellation's credit in August, after the company disclosed that it miscalculated the amount of collateral it would need in case of a credit rating downgrade, a mistake Shattuck called inexcusable. A downgrade to junk status would have put Constellation on the hook for $3.3 billion." Baltimore Sun

"One analyst compared Constellation's credit concerns to Enron, the Houston energy company that quickly sank into oblivion...Constellation has a large, risky and opaque trading book, which debt agencies cited recently as having insufficient control and transparency," Justice, the Morningstar analyst, said in an interview, noting the company functions more like an investment bank than a traditional utility...It trades in electricity, natural gas, coal and other energy products all over the world. Part of that business takes large positions in electricity markets, placing bets on where prices will go." Baltimore Sun
GoodnessMeOhMy

Baltimore, MD

#6 Sep 22, 2008
Cry me a river ...
afmca

United States

#7 Sep 22, 2008
No -- the blame for Constellation Energy lies firmly with the executives of Constellation. They played with the fiscal integrity of the company and lost. Stop blaming the legislature .. they did not make the bad energy deals, they did not illegally mark-up the cost of energy by shuffling purchases through shell companies, and they did not mis-state the risk of their investments in their books. The executives at Constellation did - DUH!!! Get off the FPL bandwagon .. that would have been an unmitigated disaster for the customers of Constellation. Yes the executives and stock holders may have gotten richer, but it was a useless merger based more on making a few rich at the expense of many. Greed and corruption has gotten us to where we are .. it is time to clean up the money changers and force them to add to society; not just their own pockets.
Dave

Hyattsville, MD

#8 Sep 22, 2008
I only have one question for the writer of this article ..... Did you vote for O'Malley, Miller and Busch? Bet you did. If not, my apology.
Bill

Baltimore, MD

#9 Sep 22, 2008
The idiot tax hiking anti-business O'Malley is at fault here.
Rock

Greenbelt, MD

#11 Sep 22, 2008
Oh poor baby... I cry for you, I didn't see Constellation cry for the residents of Maryland when they tripled their gas and electric bill. In fact I'm sure you were celebrating your ill gotten gains... Go cry to someone that cares poor baby.
BaltoMike

Baltimore, MD

#12 Sep 22, 2008
Excellent perspective, very well written, and oh so true. It's a shame, and so telling, that most of the ignoramuses who have commented on this letter still don't understand the relationship between BGE and Constellation, and they are clueless as to why their rates increased so significantly last year. There again, you can thank your politicians for giving you six years of below-market rates that could be sustained just long enough for them to be re-elected, and then when things didn't go well they backpedaled on the deal to garner votes for another term. BGE simply passes along to ratepayers the cost it pays for the commodity, and that commodity is purchased on the open market from the lowest bidder. It wouldn't surprise me if some of you don't know what a commodity is either. It's no wonder we're in this mess since you are the same morons who vote without knowing the issues, and without having the ability to think through the ramifications of your decisions. Just wait and see what life in Charm City will be if Constellations closes shop. Then you'll have something legitimate to bellyache about.
Yu Gotabe Jo King

Hampstead, MD

#13 Sep 22, 2008
This should be titled, "Constellation overcharges cost BGE ratepayers billions". We fought back and won.
Jesse

Macomb, MI

#15 Sep 22, 2008
The state government wouldn't have hardly been paying attention to Constellation if the company had not gotten so greedy and had given them a platform to run on.

So that "smart" management Constellation have/had (I hope they get fired by MidAmerican) wasn't so smart.
concerned non lawyer

Baltimore, MD

#17 Sep 22, 2008
The FPL was a bad deal, very bad. Why would we want to be eaten up by a Florida company that has large expenses every year because of storms and hurricanes? O"Malley eventually did us wrong later, by giving away all future negotiations. Now we await our fate on this merger. Who do you think is going to pay the expenses back? Correctomundo! Us. The writer got greedy and got caught, too damn bad. I see it every month on my bill.
MikeWall

Chicago, IL

#18 Sep 22, 2008
Let's rephrase the basis concept of your letter - the Maryland elected officials, acting on their reponsibility to the CITIZENS of Maryland, saved the CITIZENS billions. That is their job as elected officials. I'm not quite sure where this idea comes from the government's job is to make profits for business - the job of government is to limit the profit of business if the profit comes at the expense of the citizenry! In this instance, the government of the state (unlike the Republican controlled Federal government) was, for a change, actually doing their job!!!!!
Amused

Stroudsburg, PA

#20 Sep 22, 2008
MikeWall wrote:
Let's rephrase the basis concept of your letter - the Maryland elected officials, acting on their reponsibility to the CITIZENS of Maryland, saved the CITIZENS billions. That is their job as elected officials. I'm not quite sure where this idea comes from the government's job is to make profits for business - the job of government is to limit the profit of business if the profit comes at the expense of the citizenry! In this instance, the government of the state (unlike the Republican controlled Federal government) was, for a change, actually doing their job!!!!!
How did the FPL deal cost BGE customers one penny? Here's a hint, Constellation is the holding company and can't pass its costs to BGE customers.
Tommy

Chalfont, PA

#21 Sep 22, 2008
And for whom did you vote? Oh, I thought so! Many folks have found that the three fools in Annapolis were the wrong choice.
BaltoMike

Baltimore, MD

#22 Sep 22, 2008
Not a CEG employee, just someone who has spent the time to understand the facts. I suggest you do the same instead of spewing your rhetoric.
Taxpayer

Westminster, MD

#23 Sep 22, 2008
Any investment is a crap shoot. Sometimes you win, sometimes you lose. Now stop whining, nobody guaranteed you anything, did they?
wbk

Springfield, VA

#24 Sep 22, 2008
How come Mayo didn't take the higher per share offer from the French firm? 35 vs 26.50

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