Constellation Energy 10-Q 7 May 10 2010 Q1 Quarterly report Financial data

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Constellation Energy Group, Inc. and Subsidiaries) (USD $)
In Millions, except Per Share data	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Revenues
Nonregulated revenues	2518.2	3112.3
Regulated electric revenues	751.3	806.8
Regulated gas revenues	317.1	384.3
Total revenues	3586.6	4303.4
Expenses
Fuel and purchased energy expenses	2362.1	3273.2
Fuel and purchased energy expenses from affiliate	198.5
Operating expenses	396.4	581.7
Merger termination and strategic alternatives costs		42.3
Impairment losses and other costs		28.6
Workforce reduction costs		10.8
Depreciation, depletion, and amortization	131.4	148.6
Accretion of asset retirement obligations	0.5	17.9
Taxes other than income taxes	66.8	77.9
Total expenses	3155.7	4,181
Equity Investment Losses	-20.7
Net Gain (Loss) on Divestitures	4.9	-334.5
Income (Loss) from Operations	415.1	-212.1
Other Expense	-22.3	-56.3
Fixed Charges
Interest expense	121.5	115.1
Interest capitalized and allowance for borrowed funds used during construction	-15.6	-21.6
Total fixed charges	105.9	93.5
Income (Loss) from Continuing Operations Before Income Taxes	286.9	-361.9
Income Tax Expense (Benefit)	95.6	-242.2
Net Income (Loss)	191.3	-119.7
Less: Net (Loss) Income Attributable to Noncontrolling Interests and BGE Preference Stock Dividends	-0.2	3.8
Net Income (Loss) Attributable to Common Stock	191.5	-123.5
Average Shares of Common Stock Outstanding-Basic (in shares)	200.3	198.5
Average Shares of Common Stock Outstanding-Diluted (in shares)	201.9	198.5
Earnings (Loss) Per Common Share-Basic (in dollars per share)	0.96	-0.62
Earnings (Loss) Per Common Share-Diluted (in dollars per share)	0.95	-0.62
Dividends Declared Per Common Share (in dollars per share)	0.24	0.24

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Constellation Energy Group, Inc. and Subsidiaries) (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net Income (Loss)	191.3	-119.7
Hedging instruments:
Reclassification of net loss on hedging instruments from OCI to net income (loss), net of taxes	108.5	457.2
Net unrealized loss on hedging instruments, net of taxes	-232.9	-339.2
Available-for-sale securities:
Reclassification of net (gain) loss on sales of securities from OCI to net income (loss), net of taxes	-0.1	29.7
Net unrealized gain (loss) on securities, net of taxes	0.2	-26.7
Defined benefit obligations:
Amortization of net actuarial loss, prior service cost, and transition obligation included in net periodic benefit cost, net of taxes	5.9	7.9
Net unrealized gain on foreign currency, net of taxes	1.7	2
Other comprehensive income - equity investment in CENG, net of taxes	9.9
Other comprehensive (loss) income - other equity method investees, net of taxes	-0.2	5.7
Comprehensive income	84.3	16.9
Less: Comprehensive (loss) income attributable to noncontrolling interests, net of taxes	-0.2	3.8
Comprehensive Income Attributable to Common Stock	84.5	13.1

CONSOLIDATED BALANCE SHEETS (Co

CONSOLIDATED BALANCE SHEETS (Constellation Energy Group, Inc. and Subsidiaries) (USD $)
In Millions	3 Months Ended Mar. 31, 2010	12 Months Ended Dec. 31, 2009
Current Assets
Cash and cash equivalents	1937.8	$3,440
Accounts receivable (net of allowance for uncollectibles of $71.9 and $80.4, respectively)	1913.2	1778.2
Accounts receivable - consolidated variable interest entities (net of allowance for uncollectibles of $90.4 and $80.2, respectively)	319.3	359.4
Fuel stocks	268.3	314.9
Materials and supplies	99.9	93.3
Derivative assets	686	639.1
Unamortized energy contract assets (includes $376.9 and $371.3, respectively, related to CENG)	427.1	436.5
Restricted cash	2.2	2.7
Restricted cash - consolidated variable interest entities	109.8	24.3
Deferred income taxes	172.1	127.9
Other	186.4	244.4
Total current assets	6122.1	7460.7
Investments and Other Assets
Investment in CENG	5222.4	5222.9
Other investments	414.2	424.3
Regulatory assets (net)	399.8	414.4
Goodwill	25.5	25.5
Derivative assets	731.4	633.9
Unamortized energy contract assets (includes $311.0 and $400.9, respectively, related to CENG)	467.2	604.7
Other	258.3	304.2
Total investments and other noncurrent assets	7518.8	7629.9
Property, Plant and Equipment
Property, plant and equipment	12623.7	12534.5
Accumulated depreciation	-4127.5	-4080.7
Net property, plant and equipment	8496.2	8453.8
Total Assets	22137.1	23544.4
Current Liabilities
Short-term borrowings	21.1	46
Current portion of long-term debt	0.2	0.4
Current portion of long-term debt - consolidated variable interest entities	56.5	56.5
Accounts payable and accrued liabilities	996.8	1019.6
Accounts payable and accrued liabilities - consolidated variable interest entities	228.5	242.8
Derivative liabilities	906.7	632.6
Unamortized energy contract liabilities	299.5	390.1
Accrued taxes	168.2	877.3
Accrued expenses	187.7	297.9
Other	363.3	477.5
Total current liabilities	3228.5	4040.7
Deferred Credits And Other Noncurrent Liabilities
Deferred income taxes	3,181	3205.5
Asset retirement obligations	29.4	29.3
Derivative liabilities	812.9	674.1
Unamortized energy contract liabilities	510	653.7
Defined benefit obligations	742.9	743.9
Deferred investment tax credits	30.9	32
Other	375.3	388.8
Total deferred credits and other noncurrent liabilities	5682.4	5727.3
Long-term Debt, Net of Current Portion	3765.8	4359.6
Long-term Debt, Net of Current Portion - consolidated variable interest entities	454.4	454.4
Common shareholders' equity:
Common stock	3270.8	3229.6
Retained earnings	6591.4	6,461
Accumulated other comprehensive loss	-1100.5	-993.5
Total common shareholders' equity	8761.7	8697.1
BGE preference stock not subject to mandatory redemption	190	190
Noncontrolling interests	54.3	75.3
Total equity	9,006	8962.4
Commitments, Guarantees, and Contingencies (see Notes)
Total Liabilities and Equity	22137.1	23544.4

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (Constellation Energy Group, Inc. and Subsidiaries) (USD $)
In Millions	Mar. 31, 2010	Dec. 31, 2009
CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for uncollectibles	71.9	80.4
Accounts receivable - consolidated variable interest entities, allowance for uncollectibles	90.4	80.2
Unamortized energy contract assets, current, related to CENG	376.9	371.3
Unamortized energy contract assets, noncurrent, related to CENG	$311	400.9

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Constellation Energy Group, Inc. and Subsidiaries) (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Cash Flows From Operating Activities
Net income (loss)	191.3	-119.7
Adjustments to reconcile to net cash (used in) provided by operating activities
Depreciation, depletion, and amortization	131.4	148.6
Amortization of nuclear fuel		30.8
Amortization of energy contracts and derivatives designated as hedges	17.4	-43.3
All other amortization	6	35.1
Accretion of asset retirement obligations	0.5	17.9
Deferred income taxes	-2.4	-308.8
Investment tax credit adjustments	-1.1	-1.5
Deferred fuel costs	23.9	16.6
Defined benefit obligation expense	20.6	30.7
Defined benefit obligation payments	-15.5	-282.2
Workforce reduction costs		10.8
Impairment losses and other costs		28.6
Impairment losses on nuclear decommissioning trust assets		60.5
Merger termination and strategic alternatives costs		37.2
(Gain) loss on divestitures	-4.9	334.5
Equity in earnings of affiliates less than dividends received	31.3	5.7
Derivative contracts classified as financing activities	39.1	296.8
Changes in:
Accounts receivable, excluding margin	87	219.9
Derivative assets and liabilities, excluding collateral	-75.9	67.6
Net collateral and margin	-109.1	211.6
Materials, supplies, and fuel stocks	38.2	270
Other current assets	35.3	240.9
Accounts payable and accrued liabilities	(33)	-345.9
Accrued taxes and other current liabilities	(931)	7.5
Other	-12.5	19.9
Net cash (used in) provided by operating activities	-563.4	989.8
Cash Flows From Investing Activities
Investments in property, plant and equipment	-190.9	-392.1
Investments in nuclear decommissioning trust fund securities		-135.4
Proceeds from nuclear decommissioning trust fund securities		116.7
Proceeds from sales of investments and other assets	24.8	31.4
Contract and portfolio acquisitions	-3.4	-866.3
(Increase) decrease in restricted funds	-66.1	979.3
Other	1.5	-0.9
Net cash used in investing activities	-234.1	-267.3
Cash Flows From Financing Activities
Net (repayment) issuance of short-term borrowings	-24.9	207.2
Proceeds from issuance of common stock	11	5.8
Proceeds from issuance of long-term debt		109
Repayment of long-term debt	-600.7	-1119.6
Debt issuance costs	(4)	-62.7
Common stock dividends paid	-46.3	-85.7
BGE preference stock dividends paid	-3.3	-3.3
Proceeds from contract and portfolio acquisitions		863.8
Derivative contracts classified as financing activities	-39.1	-296.8
Other	2.6	4.3
Net cash used in financing activities	-704.7	(378)
Net (Decrease) Increase in Cash and Cash Equivalents	-1502.2	344.5
Cash and Cash Equivalents at Beginning of Period	3,440	202.2
Cash and Cash Equivalents at End of Period	1937.8	546.7

Basis of Presentation, Reclassi

Basis of Presentation, Reclassifications
	3 Months Ended Mar. 31, 2010
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation, Reclassifications	Basis of Presentation This Quarterly Report on Form10-Q is a combined report of Constellation Energy Group,Inc. (Constellation Energy) and Baltimore Gas and Electric Company (BGE). References in this report to "we" and "our" are to Constellation Energy and its subsidiaries, collectively. References in this report to the "regulated business(es)" are to BGE. Various factors can have a significant impact on our results for interim periods. This means that the results for this quarter are not necessarily indicative of future quarters or full year results given the seasonality of our business. Our interim financial statements on the previous pages reflect all adjustments that management believes are necessary for the fair statement of the results of operations for the interim periods presented. These adjustments are of a normal recurring nature. Reclassifications In accordance with the presentation requirements for consolidated variable interest entities (VIEs), which we adopted on January1, 2010, we have separately presented the following material assets and liabilities of these VIEs on our, and/or BGE's, Consolidated Balance Sheets: "Accounts receivableconsolidated variable interest entities," "Restricted cashconsolidated variable interest entities," "Current portion of long-term debtconsolidated variable interest entities," "Accounts payable and accrued liabilitiesconsolidated variable interest entities,"and "Long-term Debt, Net of Current Portionconsolidated variable interest entities." We discuss our adoption of the reporting requirements for consolidated variable interest entities below in the Variable Interest Entities section. We have also reclassified certain prior-period amounts: We have separately presented "Other comprehensive incomeother equity method investees, net of taxes" that was previously reported within "Reclassification of net loss on hedging instruments from OCI to net income (loss), net of taxes" and "Net unrealized gain (loss) on hedging instruments, net of taxes" on our Consolidated Statements of Comprehensive Income (Loss). We have separately presented "Electricity purchased for resale from affiliate" that was previously reported within "Electricity purchased for resale" on BGE's Consolidated Statements of Income. We have separately presented "Operations and maintenance from affiliate" that was previously reported within "Operations and maintenance" on BGE's Consolidated Statements of Income.

Variable Interest Entities

Variable Interest Entities
	3 Months Ended Mar. 31, 2010
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Variable Interest Entities	Variable Interest Entities Effective January1, 2010, we adopted new accounting, presentation, and disclosure requirements related to VIEs. As a result of our assessment and implementation of the new requirements, our accounting and disclosures related to VIEs were impacted as follows: We have presented separately on our Consolidated Balance Sheets, to the extent material, the assets of our consolidated VIEs that can only be used to settle specific obligations of the consolidated VIE, and the liabilities of our consolidated VIEs for which creditors do not have recourse to our general credit. The new requirements emphasize a qualitative assessment of whether the equity holders of the entity have the power to direct matters that most significantly impact the entity. We have evaluated all existing entities under the new VIE accounting requirements, both those previously considered VIEs and those considered potential VIEs. Our accounting for and disclosure about VIEs did not change materially as a result of these assessments. We consolidate three VIEs for which we are the primary beneficiary, and we have significant interests in six VIEs for which we do not have controlling financial interests and, accordingly, are not the primary beneficiary. Consolidated Variable Interest Entities In 2007, BGE formed RSB BondCoLLC (BondCo), a special purpose bankruptcy-remote limited liability company, to acquire and hold rate stabilization property and to issue and service bonds secured by the rate stabilization property. In June 2007, BondCo purchased rate stabilization property from BGE, including the right to assess, collect, and receive non-bypassable rate stabilization charges payable by all residential electric customers of BGE. These charges are being assessed in order to recover previously incurred power purchase costs that BGE deferred pursuant to Maryland Senate Bill 1. BGE determined that BondCo is a VIE for which it is the primary beneficiary. As a result, BGE, and we, consolidated BondCo. The BondCo assets are restricted and can only be used to settle the obligations of BondCo. Further, BGE is required to remit all payments it receives from customers for rate stabilization charges to BondCo. During the quarter ended March31, 2010, BGE remitted $23.8million to BondCo. BGE did not provide any additional financial support to BondCo during the quarter ended March31, 2010. Further, BGE does not have any contractual commitments or obligations to provide additional financial support to BondCo unless additional rate stabilization bonds are issued. The BondCo creditors do not have any recourse to the general credit of BGE in the event the rate stabilization charges are not sufficient to cover the bond principal and interest payments of BondCo. During 2009, our retail gas operation formed two new entities and combined them with our existing retail gas operation into a retail gas entity group for the purpose of entering into a collateralized gas supply agreement with a third party gas supplier. While we own 100% of these entities, we determined that the retail gas entity group is a VIE because there is not sufficient equity to

Earnings Per Share

Earnings Per Share
	3 Months Ended Mar. 31, 2010
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Earnings Per Share	Earnings Per Share Basic earnings per common share (EPS) is computed by dividing net income (loss) attributable to common stock by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution of common stock equivalent shares that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Our dilutive common stock equivalent shares consist of stock options and other stock-based compensation awards. The following table presents stock options that were not dilutive and were excluded from the computation of diluted EPS in each period, as well as the dilutive common stock equivalent shares: Quarter Ended March31, 2010 2009 (In millions) Non-dilutive stock options 4.9 5.5 Dilutive common stock equivalent shares 1.6 0.4 As a result of the Company incurring a loss for the quarter ended March31, 2009, dilutive common stock equivalent shares were not included in calculating diluted EPS for that reporting period.

Acquisitions

Acquisitions
	3 Months Ended Mar. 31, 2010
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Acquisitions	Acquisitions Criterion Wind Project In April 2010, we completed the acquisition of the Criterion wind project in Garrett County, Maryland. The completed cost of this project is expected to be approximately $140million. This 70 MW wind energy project will be developed, constructed, owned, and operated by us. We expect this facility to be in commercial operation by the end of2010. Texas Combined Cycle Generation Facilities In April 2010, we signed an agreement to purchase the 550MW Colorado Bend Energy Center and the 550MW Quail Run Energy Center natural gas combined cycle generation facilities in Texas for $365million, subject to normal closing adjustments. The transaction is expected to close in the second quarter of 2010, subject to certain state and federal regulatory approvals.

Divestiture

Divestiture
	3 Months Ended Mar. 31, 2010
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Divestiture	Divestiture In January 2010, BGE completed the sale of its interest in a nonregulated subsidiary that owns a district chilled water facility to a third party. BGE received net cash proceeds of $20.9million. No gain or loss was recorded on this transaction in 2010. BGE has no further involvement in the activities of this entity.

Investment in Constellation Ene

Investment in Constellation Energy Nuclear Group, LLC (CENG)
	3 Months Ended Mar. 31, 2010
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Investment in Constellation Energy Nuclear Group, LLC (CENG)	Investment in Constellation Energy Nuclear Group,LLC (CENG) On November6, 2009, we completed the sale of a 49.99% membership interest in CENG, our nuclear generation and operation business, to EDF Group and affiliates (EDF). As a result of this transaction, we retained a 50.01% economic interest in CENG, but we and EDF have equal voting rights over the activities of CENG. Accordingly, we deconsolidated CENG and began to record our investment in CENG under the equity method of accounting. For the quarter ended March31, 2010, we recorded $19.2million of equity investment losses in CENG, which represents our share of earnings from CENG of $23.4million, net of the amortization of the basis difference in CENG of $42.6million. Our equity investment earnings in CENG include $1.2million of expense related to the portion of the cost of certain share-based awards that we fund on behalf of EDF. The basis difference is the difference between the fair value of our investment in CENG at closing and our share of the underlying equity in CENG, because the underlying assets of CENG were retained at their carrying value. See Note2 to our 2009 Annual Report on Form10-K for a more detailed discussion. Summarized income statement information for CENG for the quarter ended March31, 2010 is as follows: Quarter Ended March31, 2010 (Inmillions) Revenues $ 360.9 Fuel and purchased energy expenses 58.4 Income from operations 37.6 Net income 49.1

Information by Operating Segmen

Information by Operating Segment
	3 Months Ended Mar. 31, 2010
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Information by Operating Segment	Information by Operating Segment In connection with the strategic initiatives that were undertaken in 2008 and 2009, we decided to re-align our reporting structure, beginning January1, 2010, to reflect our current view of managing the business. As a result, as of January1, 2010, we changed our reportable segments and have recast prior period information to conform with the current presentation. Our reportable operating segments are Generation, NewEnergy (referred to as Customer Supply in our 2009 Annual Report on Form10-K), Regulated Electric, and Regulated Gas: Our Generation business is nonregulated and includes: a power generation and development operation that owns, operates and maintains fossil and renewable generating facilities, a fuel processing facility, qualifying facilities, and power projects in the United States, an operation that manages certain contractually owned physical assets, including generating facilities, an interest in a nuclear generation joint venture (CENG) that owns, operates, and maintains five nuclear generating units,and an interest in a joint venture (UniStar Nuclear Energy,LLC (UNE)) to develop, own, and operate new nuclear projects in the United States. Our NewEnergy business is nonregulated and includes: full requirements load-serving sales of energy and capacity to utilities, cooperatives, and commercial, industrial, and governmental customers, sales of retail energy products and services to residential, commercial, industrial, and governmental customers, structured transactions and risk management services for various customers (including hedging of output from generating facilities and fuel costs) and trading in energy and energy-related commodities to facilitate portfolio management, risk management services for our Generation business, design, construction, and operation of renewable energy, heating, cooling, and cogeneration facilities for commercial, industrial, and governmental customers throughout North America, including energy performance contracting and energy efficiency engineering services, upstream (exploration and production) natural gas activities, and sales of home improvements, servicing of electric and gas appliances, and heating, air conditioning, plumbing, electrical, and indoor air quality systems, and providing electric and natural gas to residential customers in central Maryland. Our regulated electric business purchases, transmits, distributes, and sells electricity in Central Maryland. Our regulated gas business purchases, transports, and sells natural gas in Central Maryland. Our Generation, NewEnergy, Regulated Electric, and Regulated Gas reportable segments are strategic businesses based principally upon regulations, products, and services that require different technologies and marketing strategies. We evaluate the performance of these segments based on net income. We account for intersegment revenues using market prices. A summary of information by operating segment is shown in the table below. Reportable Segments Holding Company and Other Generation NewEnergy Regul

Pension and Postretirement Bene

Pension and Postretirement Benefits
	3 Months Ended Mar. 31, 2010
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Pension and Postretirement Benefits	Pension and Postretirement Benefits We show the components of net periodic pension benefit cost in the following table: Quarter Ended March31, 2010 2009 (In millions) Components of net periodic pension benefit cost Service cost $ 9.5 $ 15.2 Interest cost 21.7 27.2 Expected return on plan assets (26.7 ) (29.6 ) Recognized net actuarial loss 8.1 10.6 Amortization of prior service cost 1.0 3.3 Amount capitalized as construction cost (1.9 ) (2.6 ) Net periodic pension benefit cost1 $ 11.7 $ 24.1 1 BGE's portion of our net periodic pension benefit cost, excluding amounts capitalized, was $6.3million in 2010 and $7.2million in 2009. We show the components of net periodic postretirement benefit cost in the following table: Quarter Ended March31, 2010 2009 (In millions) Components of net periodic postretirement benefit cost Service cost $ 0.7 $ 1.6 Interest cost 4.7 5.8 Amortization of transition obligation 0.5 0.5 Recognized net actuarial loss 0.3 0.7 Amortization of prior service cost (0.7 ) (0.8 ) Amount capitalized as construction cost (1.3 ) (1.5 ) Net periodic postretirement benefit cost1 $ 4.2 $ 6.3 1 BGE's portion of our net periodic postretirement benefit cost, excluding amounts capitalized, was $4.8million in 2010 and $4.6million in 2009. Our non-qualified pension plans and our postretirement benefit programs are not funded; however, we have trust assets securing certain executive pension benefits. We estimate that we will incur approximately $9.3million in pension benefit payments for our non-qualified pension plans and approximately $25.7million for retiree health and life insurance costs in 2010. We contributed $12.2million to our qualified pension plans in April 2010. Healthcare Reform Legislation During March 2010, the Patient Protection and Affordable Care Act and the Healthcare and Education Reconciliation Act of 2010 were signed into law. These laws eliminate the tax exempt status of drug subsidies provided to companies under Medicare PartD after December31, 2012. As a result of this new legislation, we recorded a noncash charge to reflect additional deferred income tax expense of $8.8million in the quarter ended March31, 2010.

Financing Activities

Financing Activities
	3 Months Ended Mar. 31, 2010
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Financing Activities	Financing Activities Credit Facilities and Short-term Borrowings Our short-term borrowings may include bank loans, commercial paper, and bank lines of credit. Short-term borrowings mature within one year from the date of issuance. We pay commitment fees to banks for providing us lines of credit. When we borrow under the lines of credit, we pay market interest rates. We enter into these facilities to ensure adequate liquidity to support our operations. Constellation Energy Our liquidity requirements are funded with credit facilities and cash. We fund our short-term working capital needs with existing cash and with our credit facilities, which support direct cash borrowings and the issuance of commercial paper, if available. We also use our credit facilities to support the issuance of letters of credit, primarily for our NewEnergy business. Constellation Energy had bank lines of credit under committed credit facilities totaling $4.0billion at March31, 2010 for short-term financial needs as follows: Type of Credit Facility Amount (Inbillions) Expiration Date Capacity Type Syndicated Revolver $ 2.32 July 2012 Letters of credit and cash Commodity-linked 0.50 August 2014 Letter of credit Bilateral 0.55 September 2014 Letters of credit Bilateral 0.25 December 2014 Letters of credit and cash Bilateral 0.25 June 2014 Letters of credit and cash Bilateral 0.15 September 2013 Letters of credit Total $ 4.02 Collectively, these facilities currently support the issuance of letters of credit and/or cash borrowings up to $4.0billion. At March31, 2010, we had approximately $1.9billion in letters of credit issued including $0.4billion in letters of credit issued under the commodity-linked credit facility discussed below and no commercial paper outstanding or direct borrowings under these facilities. The commodity-linked credit facility currently allows for the issuance of letters of credit up to a maximum capacity of $0.5billion. This commodity-linked facility is designed to help manage our contingent collateral requirements associated with the hedging of our NewEnergy business because its capacity increases as natural gas price levels decrease compared to a reference price that is adjusted periodically. At March31, 2010, Constellation Energy had $21.1million of short-term notes outstanding with a weighted average effective interest rate of 6.33%. BGE BGE has a $600.0million revolving credit facility expiring in 2011. BGE can borrow directly from the banks, use the facility to allow commercial paper to be issued, if available, or issue letters of credit. At March31, 2010, BGE had no commercial paper or direct borrowings outstanding. There were immaterial letters of credit outstanding at March31, 2010. Debt Constellation Energy As part of our voluntary commitment to reduce our debt by $1billion with funds received from the EDF transaction, we retired the following debt during the quarter ended March31, 2010 completing this commitment. 7.00% Notes due April1, 2012 In February 2010, we retired an agg

Income Taxes, Unrecognized Tax

Income Taxes, Unrecognized Tax Benefits
	3 Months Ended Mar. 31, 2010
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Income Taxes, Unrecognized Tax Benefits	Income Taxes We compute the income tax expense (benefit) for each quarter based on the estimated annual effective tax rate for the year. The effective tax rate was 33.3% for the quarter ended March31, 2010 compared to 66.9% for the same period of 2009. The lower effective tax rate for 2010 reflects the impact of favorable adjustments (primarily related to reductions of uncertain tax positions and higher deductions for qualified production activities). The higher effective tax rate in 2009 reflects the impact of unfavorable nondeductible adjustments (primarily related to nondeductible dividends on the SeriesB Preferred Stock and the write-off of the unamortized debt discount on the 14% Senior Notes) in relation to the lower estimated 2009 taxable income (primarily attributable to losses on the divestiture of a majority of our international commodities and our Houston-based gas trading operations). The BGE effective tax rate was 41.6% for the quarter ended March31, 2010 compared to 39.5% for the same period of 2009. The higher effective tax rate for 2010 is primarily due to the impact of the healthcare reform legislation enacted in the first quarter of 2010, which eliminates the tax exempt status of prescription drug subsidies received under Medicare PartD. Unrecognized Tax Benefits The following table summarizes the change in unrecognized tax benefits during 2010 and our total unrecognized tax benefits at March31, 2010: At March31, 2010 (Inmillions) Total unrecognized tax benefits, January1,2010 $ 312.5 Increases in tax positions related to the current year 4.3 Increases in tax positions related to prioryears 2.8 Reductions in tax positions related to prioryears (28.8 ) Reductions in tax positions as a result of a lapse of the applicable statute of limitations (0.6 ) Total unrecognized tax benefits, March31,20101 $ 290.2 1 BGE's portion of our total unrecognized tax benefits at March31, 2010 was $104.3million. Increases in tax positions related to the current year and prior years are primarily due to unrecognized tax benefits for repair and depreciation deductions measured at amounts consistent with prior IRS examination results and state income tax accruals. Decreases in tax positions related to prior years are primarily due to the resolution of the tax treatment of distributions received from our shipping joint venture in July 2008 and repair deductions. Total unrecognized tax benefits as of March31, 2010 of $290.2million include outstanding claims of approximately $63.0million, including $51.6million in state tax credits, for which no tax benefit was recorded on our Consolidated Balance Sheet because refunds were not received and the claims do not meet the "more-likely-than-not" threshold. If the total amount of unrecognized tax benefits of $290.2million were ultimately realized, our income tax expense would decrease by approximately $167million. However, the $167million includes state tax refund claims of $51.6million that have been disallowed by tax authorities and are subject to appeals. These state refund claims may be resolved by March31, 201

Taxes Other Than Income Taxes

Taxes Other Than Income Taxes
	3 Months Ended Mar. 31, 2010
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Taxes Other Than Income Taxes	Taxes Other Than Income Taxes Taxes other than income taxes primarily include property and gross receipts taxes along with franchise taxes and other non-income taxes, surcharges, and fees. BGE and our NewEnergy operations collect certain taxes from customers such as sales and gross receipts taxes, along with other taxes, surcharges, and fees that are levied by state or local governments on the sale or distribution of gas and electricity. Some of these taxes are imposed on the customer and others are imposed on BGE and our NewEnergy business. Where these taxes, such as sales taxes, are imposed on the customer, we account for these taxes on a net basis with no impact to our Consolidated Statements of Income (Loss). However, where these taxes, such as gross receipts taxes or other surcharges or fees, are imposed on BGE or our NewEnergy business, we account for these taxes on a gross basis. Accordingly, we recognize revenues for these taxes collected from customers along with an offsetting tax expense, which are both included in our and BGE's Consolidated Statements of Income (Loss). The taxes, surcharges, or fees that are included in revenues were as follows: Quarter Ended March31, 2010 2009 (In millions) Constellation Energy (including BGE) $ 31.0 $ 30.7 BGE 21.9 21.6

Guarantees

Guarantees
	3 Months Ended Mar. 31, 2010
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Guarantees	Guarantees Our guarantees do not represent incremental Constellation Energy obligations; rather they primarily represent parental guarantees of subsidiary obligations. The following table summarizes the maximum exposure by guarantor based on the stated limit of our outstanding guarantees: At March31, 2010 StatedLimit (In billions) Constellation Energy guarantees $ 9.6 BGE guarantees 0.3 Total guarantees $ 9.9 At March31, 2010, Constellation Energy had a total of $9.9billion in guarantees outstanding related to loans, credit facilities, and contractual performance of certain of its subsidiaries as described below. Constellation Energy guaranteed a face amount of $9.6billion as follows: $8.8billion on behalf of our Generation and NewEnergy businesses to allow them the flexibility needed to conduct business with counterparties without having to post other forms of collateral. Our estimated net exposure for obligations under commercial transactions covered by these guarantees was approximately $2billion at March31, 2010, which represents the total amount the parent company could be required to fund based on March31, 2010 market prices. For those guarantees related to our derivative liabilities, the fair value of the obligation is recorded in our Consolidated Balance Sheets. $0.6billion primarily on behalf of CENG's nuclear generating facilities for nuclear insurance and credit support to ensure these plants have funds to meet expenses and obligations to safely operate and maintain the plants. We recorded the fair value of $12.3million for these guarantees on our Consolidated Balance Sheets. $0.2billion to its other nonregulated businesses. BGE guaranteed the Trust Preferred Securities of $250.0million of BGE Capital Trust II.

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended Mar. 31, 2010
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Commitments and Contingencies	Commitments and Contingencies We have made substantial commitments in connection with our Generation, NewEnergy, regulated electric and gas, andother nonregulated businesses. These commitments relateto: purchase of electric generating capacity and energy, procurement and delivery of fuels, the capacity and transmission and transportation rights for the physical delivery of energy to meet our obligations to our customers, and long-term service agreements, capital for construction programs, and other. Our Generation and NewEnergy businesses enter into various long-term contracts for the procurement and delivery of fuels to supply our generating plant requirements. In most cases, our contracts contain provisions for price escalations, minimum purchase levels, and other financial commitments. These contracts expire in various years between 2010 and 2018. In addition, our NewEnergy business enters into long-term contracts for the capacity and transmission rights for the delivery of energy to meet our physical obligations to our customers. These contracts expire in various years between 2010 and 2030. Our Generation and NewEnergy businesses also have committed to long-term service agreements and other purchase commitments for our plants. Our regulated electric business enters into various long-term contracts for the procurement of electricity. These contracts expire between 2010 and 2012 and represent BGE's estimated requirements as follows: Contract Duration Percentage of Estimated Requirements From April1, 2010 to May 2011 100 % From June 2011 to September 2011 75 From October 2011 to May 2012 50 From June 2012 to September 2012 25 The cost of power under these contracts is recoverable under the Provider of Last Resort agreement reached with the Maryland PSC. Our regulated gas business enters into various long-term contracts for the procurement, transportation, and storage of gas. Our regulated gas business has gas procurement contracts that expire between 2010 and 2011, and transportation and storage contracts that expire between 2010 and 2027. The cost of gas under these contracts is recoverable under BGE's gas cost adjustment clause discussed in Note1 of our 2009 Annual Report on Form10-K. We have also committed to long-term service agreements and other obligations related to our information technology systems. At March31, 2010, the total amount of commitments was $6.2billion. These commitments are primarily related to our Generation and NewEnergy businesses. Long-Term Power Sales Contracts We enter into long-term power sales contracts in connection with our load-serving activities. We also enter into long-term power sales contracts associated with certain of our power plants. Our load-serving power sales contracts extend for terms through 2019 and provide for the sale of energy to electricity distribution utilities and certain retail customers. Our power sales contracts associated with power plants we own extend for terms into 2016 and provide for the sale of all or a portion of the actual output of certain of our power plants. Substantially all long-term

Environmental Matters

Environmental Matters
	3 Months Ended Mar. 31, 2010
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Environmental Matters	Environmental Matters Solid and Hazardous Waste In 1999, the EPA proposed to add the 68thStreet Dump in Baltimore, Maryland to the Superfund National Priorities List, which is its list of sites targeted for clean-up and enforcement, and sent a general notice letter to BGE and 19 other parties identifying them as potentially liable parties at the site. In March 2004, we and other potentially responsible parties formed the 68thStreet Coalition and entered into consent order negotiations with the EPA to investigate clean-up options for the site under the Superfund Alternative Sites Program. In May 2006, a settlement among the EPA and 19 of the potentially responsible parties, including BGE, with respect to investigation of the site became effective. The settlement requires the potentially responsible parties, over the course of several years, to identify contamination at the site and recommend clean-up options. BGE is indemnified by a wholly owned subsidiary of Constellation Energy for most of the costs related to this settlement and clean-up of the site. The clean-up costs will not be known until the investigation is closer to completion, which is expected by mid-2010. The completed investigation will provide a range of remediation alternatives to the EPA, and the EPA is expected to select one of the alternatives by the end of the first quarter of 2011. The clean-up costs we incur could have a material effect on our financial results. Air Quality In May 2007, a subsidiary of Constellation Energy entered into a consent decree with the Maryland Department of the Environment to resolve alleged violations of air quality opacity standards at three fossil fuel plants in Maryland. The consent decree requires the subsidiary to pay a $100,000 penalty, provide $100,000 to a supplemental environmental project, and install technology to control emissions from those plants. In January 2009, the EPA issued a notice of violation (NOV) to a subsidiary of Constellation Energy, as well as the other owners and the operator of the Keystone coal-fired power plant in Shelocta, Pennsylvania. We hold an approximately 21% interest in the Keystone plant. The NOV alleges that the plant performed various capital projects beginning in 1984 without complying with the new source review permitting requirements of the Clean Air Act. The EPA also contends that the alleged failure to comply with those requirements are continuing violations under the plant's air permits. The EPA could seek civil penalties under the Clean Air Act for the alleged violations. The owners and operator of the Keystone plant are investigating the allegations and have entered into discussions with the EPA. We believe there are meritorious defenses to the allegations contained in the NOV. However, we cannot predict the outcome of this proceeding and it is not possible to determine our actual liability, if any, at this time. Water Quality In October 2007, a subsidiary of Constellation Energy entered into a consent decree with the Maryland Department of the Environment relating to groundwater contamination at a third party facility that was licensed to accept fly ash, a byproduct g

Derivative Instruments

Derivative Instruments
	3 Months Ended Mar. 31, 2010
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Derivative Instruments	Derivative Instruments Nature of Our Business and Associated Risks Our business activities primarily include our Generation, NewEnergy, regulated electric and gas businesses. Our Generation and NewEnergy businesses include: the generation of electricity from our owned and contractually-controlled physical assets, the sale of power, gas, and other energy commodities to wholesale and retail customers, and risk management services and energy trading activities. Our regulated electric and gas businesses engage in electricity and gas transmission and distribution activities in Central Maryland at prices set by the Maryland PSC that are generally designed to recover our costs, including purchased fuel and energy. Substantially all of our risk management activities involving derivatives occur outside our regulated businesses. In carrying out our business activities, we purchase and sell power, fuel, and other energy-related commodities in competitive markets. These activities expose us to significant risks, including market risk from price volatility for energy commodities and the credit risks of counterparties with which we enter into contracts. The sources of these risks include, but are not limited to, the following: the risks of unfavorable changes in power prices in the wholesale forward and spot markets in which we sell a portion of the power from our power generation facilities and purchase power to meet our load-serving requirements, the risk of unfavorable fuel price changes for the purchase of a portion of the fuel for our generation facilities under short-term contracts or on the spot market. Fuel prices can be volatile, and the price that can be obtained for power produced from such fuel may not change at the same rate as fuel costs. the risk that one or more counterparties may fail to perform under their obligations to make payments or deliver fuel or power, interest rate risk associated with variable-rate debt and the fair value of fixed-rate debt used to finance our operations; and foreign currency exchange rate risk associated with international investments and purchases of equipment and commodities in currencies other than U.S. dollars. Objectives and Strategies for Using Derivatives Risk Management Activities To lower our exposure to the risk of unfavorable fluctuations in commodity prices, interest rates, and foreign currency rates, we routinely enter into derivative contracts, such as fixed-price forward physical purchase and sales contracts, futures, financial swaps, and option contracts traded in the over-the-counter markets or on exchanges, for hedging purposes. The objectives for entering into such hedging transactions primarily include: fixing the price for a portion of anticipated future electricity sales from our generation operations, fixing the price of a portion of anticipated fuel purchases for the operation of our power plants, fixing the price for a portion of anticipated energy purchases to supply our load-serving customers, and managing our exposure to interest rate risk and foreign currency exchange risks. Non-Risk Management Activities In addition to t

Fair Value Measurements

Fair Value Measurements
	3 Months Ended Mar. 31, 2010
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fair Value Measurements	Fair Value Measurements Recurring Measurements Our assets and liabilities measured at fair value on a recurring basis consist of the following (BGE's assets and liabilities measured at fair value on a recurring basis are immaterial): As of March31, 2010 Assets Liabilities (In millions) Cash equivalents $ 1,325.8 $ Equity securities 40.3 Derivative instruments: Classified as derivative assets and liabilities: Current 686.0 (906.7 ) Noncurrent 731.4 (812.9 ) Total classified as derivative assets and liabilities 1,417.4 (1,719.6 ) Classified as accounts receivable* (341.4 ) Total derivative instruments 1,076.0 (1,719.6 ) Total recurring fair value measurements $ 2,442.1 $ (1,719.6 ) * Represents the unrealized fair value of exchange traded derivatives, exclusive of cash margin posted. Cash equivalents represent exchange-traded money market funds which are included in "Cash and cash equivalents" in the Consolidated Balance Sheets. Equity securities represent mutual fund investments which are included in "Other assets" in the Consolidated Balance Sheets. Derivative instruments represent unrealized amounts related to all derivative positions, including futures, forwards, swaps, and options. We classify exchange-listed contracts as part of "Accounts Receivable" in our Consolidated Balance Sheets. We classify the remainder of our derivative contracts as "Derivative assets" or "Derivative liabilities" in our Consolidated Balance Sheets. We present all derivatives recorded at fair value net with the associated fair value cash collateral. This presentation of the net position reflects our credit exposure for our on-balance sheet positions but excludes the impact of any off-balance sheet positions and collateral. Examples of off-balance sheet positions and collateral include in-the-money accrual contracts for which the right of offset exists in the event of default and letters of credit. We discuss our letters of credit in more detail in the Financing Activities section. The table below sets forth by level within the fair value hierarchy the gross components of the Company's assets and liabilities that were measured at fair value on a recurring basis as of March31, 2010. Our net derivative assets and liabilities are disaggregated on a gross contract-by-contract basis. These gross balances are intended solely to provide information on sources of inputs to fair value and proportions of fair value involving objective versus subjective valuations and do not represent either our actual credit exposure or net economic exposure. Therefore, the objective of this table is to provide information about how each individual derivative contract is valued within the fair value hierarchy, regardless of whether a particular contract is eligible for netting against other contracts or whether it has been collateralized. At March31, 2010 Level1 Level2 Level3 Netting and Cash Collateral* Total Net Fair Value (In millions) Cash equivalents $ 1

Fair Value of Financial Instrum

Fair Value of Financial Instruments
	3 Months Ended Mar. 31, 2010
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fair Value of Financial Instruments	Fair Value of Financial Instruments We show the carrying amounts and fair values of financial instruments included in our Consolidated Balance Sheets in the following table: At March31, 2010 Carrying Amount Fair Value (In millions) Investments and other assetsConstellation Energy $ 220.0 $ 219.8 Fixed-rate long-term debt: Constellation Energy (including BGE) 3,736.2 3,984.2 BGE 2,200.1 2,312.8 Variable-rate long-term debt: Constellation Energy (including BGE) 544.5 544.5 BGE We use the following methods and assumptions for estimating the fair value of financial instruments: cash and cash equivalents, net accounts receivable, other current assets, certain current liabilities, short-term borrowings, current portion of long-term debt, and certain deferred credits and other liabilities: because of their short-term nature, the amounts reported in our Consolidated Balance Sheets approximate fair value, investments and other assets: the fair value is based on quoted market prices where available, and long-term debt: the fair value is based on quoted market prices where available or by discounting remaining cash flows at current market rates.

Accounting Standards Adopted

Accounting Standards Adopted
	3 Months Ended Mar. 31, 2010
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Accounting Standards Adopted	Accounting Standards Adopted Accounting for Variable Interest Entities In June 2009, the Financial Accounting Standards Board amended the accounting, presentation, and disclosure guidance related to variable interest entities. We adopted this guidance on January1, 2010 and discuss our adoption in more detail beginning on page11.

Related Party Transactions

Related Party Transactions
	3 Months Ended Mar. 31, 2010
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Related Party Transactions	Related Party Transactions Constellation Energy CENG On November6, 2009, upon the sale of a membership interest in CENG, our nuclear generation and operation business, to EDF, we deconsolidated CENG and began accounting for our 50.01% membership interest in CENG as an equity method investment. In connection with the closing of the transaction with EDF, we entered into a power purchase agreement (PPA) with CENG with a fair value of $0.8billion under which we will purchase between 85-90% of the output of CENG's nuclear plants that is not sold to third parties under pre-existing PPAs over the five year term of the PPA. In addition to the PPA, we entered into a power services agency agreement (PSA) and an administrative service agreement (ASA). The PSA is a five-year agreement under which we will provide scheduling, asset management and billing services to CENG and recognize average annual revenue of approximately $16million. The ASA is a one year agreement that is renewable annually under which we will provide administrative support services to CENG for a fee of approximately $66million for 2010. The fees for administrative support services will be subject to change in future years based on the level of services provided. The charges under this agreement are intended to represent the actual cost of the services provided to CENG from us. The impact of transactions under these agreements is summarized below: Agreement Amount Recognized in Earnings for the Quarter Ended March31,2010 Income Statement Classification Accounts Receivable/ (Accounts Payable) at March31,2010 (In millions) PPA $ 198.5 Fuel and purchased energy expenses $ (27.8 ) PSA (4.0 ) Nonregulated revenues ASA (16.5 ) Operating expenses 5.5 BGEIncome Statement BGE is obligated to provide market-based standard offer service to all of its electric customers for varying periods. Bidding to supply BGE's market-based standard offer service to electric customers will occur from time to time through a competitive bidding process approved by the Maryland PSC. Our NewEnergy business will supply a portion of BGE's market-based standard offer service obligation to electric customers through September30, 2012. The cost of BGE's purchased energy from nonregulated subsidiaries of Constellation Energy to meet its standard offer service obligation was $124.0million for the quarter ended March31, 2010 compared to $204.3million for the same period in 2009. In addition, Constellation Energy charges BGE for the costs of certain corporate functions. Certain costs are directly assigned to BGE. We allocate other corporate function costs based on a total percentage of expected use by BGE. We believe this method of allocation is reasonable and approximates the cost BGE would have incurred as an unaffiliated entity. Under the Maryland PSC's October30, 2009 order approving the transaction with EDF, we are limited to allocating no more than 31% of these costs to BGE. These costs were approximately $36.2million for the quarter ended March31, 2010 compared to $29.6million for the quarter ended March31, 2009.

Document and Entity Information

Document and Entity Information
	3 Months Ended Mar. 31, 2010	Apr. 30, 2010
Document and Entity Information
Entity Registrant Name	CONSTELLATION ENERGY GROUP INC
Entity Central Index Key	0001004440
Document Type	10-Q
Document Period End Date	2010-03-31
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		201,681,394
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1