Exelon-O'Malley Settlement Includes Potential for Ratepayer-Supported Generation

Exelon and Constellation Energy have reached a settlement with Gov. Martin O'Malley and the Maryland Energy Administration under which MEA is now supporting the applicants' merger before the PSC, and under which Exelon commits to build up to 300 MW of new in-state generation.

Notably, not all of the generation would be required to be built on a merchant basis.

The settlement provides that Exelon shall develop or assist in the development of 285 MW to 300 MW (nameplate capacity) of new generation in Maryland within the ten-year period following consummation of the Merger.

This amount shall include 120 MW of "primarily gas-fired combustion turbines" in Maryland within the 5004/5005 submarket by December 2015. The gas-fired generation shall be developed on a merchant basis.

Furthermore, 125 MW of the new generation shall be Tier 1 renewable resources developed by January 15, 2022. The Tier 1 projects shall be developed on a merchant basis, except that up to 75 MW may be developed pursuant to requests for proposals issued by the PSC, one or more Maryland electric distribution companies or cooperatives, or the State, a state or Federal agency, or a local or municipal governmental entity, for new generation in Maryland.

At least 62.5 MW of the 125 MW Tier 1 total shall be from wind projects.

Separately from the Tier 1 commitment, Exelon shall develop 30 MW of solar generation in Maryland in the City of Baltimore and other jurisdictions within the 5004/5005 submarket by December 2015, which may be developed on either a merchant basis or pursuant to an RFP issued by the PSC, one or more Maryland electric distribution companies or cooperatives, or the State, a State or Federal agency, or a local or municipal governmental entity, for new generation in Maryland.

Also separately, Exelon shall develop, or support, 10-25 MW of generation fueled primarily by combusting animal waste/manure-based fuels, with the total contingent on certain conditions and elections.

Exelon shall also provide, within 90 days after consummation of the Merger, $30 million in funding for the State's use in its efforts to realize an offshore wind project.