EXHIBIT NO. 99
News Release
Contact: Charles Welsh FOR IMMEDIATE RELEASE
410-234-5076
charles.welsh@bge.com
Media Line: 410 234-7433
www.bge.com
Constellation Power Source Holdings, Inc.
Constellation Nuclear, LLC
Baltimore Gas and Electric Company
Constellation Energy Source, Inc.
BGE Home Products & Services, Inc.
BGE ANNOUNCES THE AWARDING OF WHOLESALE ELECTRIC
SUPPLY CONTRACTS FOR THE REST OF THE RATE FREEZE PERIOD
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BALTIMORE, August 24, 2001 -- Baltimore Gas and Electric Company (BGE)
announced today that it has executed contracts with Allegheny Energy Supply
Company, LLC and Constellation Power Source (CPS) for wholesale electricity to
supply its standard offer service customers for the final three years of its
electric deregulation transition period.
"With the awarding of these contracts, BGE has locked in wholesale electric
supply that ensures our customers will continue to receive the benefits of the
retail price freeze through the transition period without any adverse financial
impact on the utility. The wholesale contract prices are no greater than the
retail standard offer service rates under our 1999 electric restructuring
settlement," said Frank Heintz, President and CEO of Baltimore Gas and Electric
Company. "The level of interest in this full and fair bidding process
demonstrates there is an active competitive market for wholesale electricity in
the Mid-Atlantic region."
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The contracts were awarded following a competitive bidding process during
which BGE contacted more than seventy electric suppliers and received offers
from a number of suppliers. The Maryland Public Service Commission will review
the results of the bidding process. The competitive bidding process is
consistent with the 1999 electric restructuring law and settlement agreement
approved by the Commission to institute deregulation and customer choice of
electric supply in BGE's service territory.
On July 1, 2000 BGE reduced its rates to residential customers by an
average of 6.5% and froze these rates through June 30, 2006. Annual savings to
these customers is about $54 million.
"Allegheny Energy Supply Company, LLC is very pleased at being selected to
provide wholesale energy services to back BGE's Standard Offer Service
obligation," said Dan Gordon, President of Allegheny Energy Global Markets, LLC,
the trading and marketing affiliate of Allegheny Energy Supply. "This type of
fully bundled, load following electric service is a strong fit with Allegheny
Energy Supply's aim to be a leading merchant of full service wholesale energy
products. We think it clearly demonstrates our ability and commitment to develop
and manage highly structured energy contracts that imbed both physical and
financial risks."
"We are pleased to be able to continue our relationship with BGE as a
wholesale supplier," said Constellation Energy Group Co-President and CPS
President and CEO Charles Shivery. "Constellation has invested heavily in
developing wholesale products tailored to meet the complex needs of retail
energy providers around the country, and we are delighted to be able to serve a
customer like BGE."
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The contracts will run from July 1, 2003 to June 30, 2006 and will provide
BGE with electricity to serve those customers who have not elected to receive
electricity from an alternative supplier. Under the terms of the contracts
Constellation Power Source will provide 90% of BGE's electric supply needs and
Allegheny Energy Supply will provide 10%. The contract with Constellation Power
Source contains provisions to provide funds to assist BGE's low-income customers
during this period.
"In our 1999 settlement, we made a commitment to our Central Maryland
customers to offer electric supply at the lowered fixed rates for up to six
years," said Christian H. Poindexter, Chairman and CEO, Constellation Energy
Group and Chairman of BGE. "These contracts carry out our commitment."
"With the signing of these contracts, we have directly addressed the
electric supply issue and removed the risk associated with it during the
transition phase," said Edward A. Crooke, who will become Chairman, President
and CEO of BGE Corp. post-separation. "It is another indication of the financial
strength of BGE and the future BGE Corp."
BGE, which provides service to more than 1.1 million electric customers and
nearly 600,000 natural gas customers in Central Maryland, is a subsidiary of
Constellation Energy Group (NYSE: CEG), a holding company that also has energy
related businesses focused mostly on power marketing, generation and portfolio
management. Constellation Power Source, a subsidiary of Constellation Energy
Group, provides power marketing and risk and energy portfolio management.
Constellation Energy Group reported combined revenues of $3.9 billion and assets
of $12.4 billion in 2000.
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Constellation Energy Group has announced it intends to separate its
wholesale merchant energy and retail energy businesses into two stand-alone,
publicly traded companies as soon as all required approvals and rulings have
been obtained. The separation is expected to occur in the fourth quarter of this
year.
Allegheny Energy Supply operates and markets competitive retail and
wholesale generation in markets throughout the United States and operates
regulated generation for its affiliates. With its recently announced
acquisitions and expansion plans, Allegheny Energy Supply will have ownership or
control of generating capacity of more than 14,500 MW with assets strategically
located throughout the United States.