[Baltimore Gas and Electric Company Letterhead]




                                                  February 25, 1997

                                                  FOR IMMEDIATE RELEASE

                                                  Contacts:

                                                  Art Slusark, Baltimore Gas
                                                                and Electric
                                                               410) 234-7436

                                                  Maria R. Gonzalez, Ogilvy
                                                           Adams & Rinehart
                                                             (410) 234-7433

                                                  Press Office, Goldman,
                                                             Sachs & Co.
                                                          (212) 902-5400


                  BGE TO CREATE NEW POWER MARKETING SUBSIDIARY
                  IN STRATEGIC MOVE TO EXPAND ENERGY BUSINESSES


                            Charles Shivery Named CEO
                   Goldman Sachs Power Named Exclusive Advisor


BALTIMORE,  MARYLAND,  February 25, 1997 -- Baltimore  Gas and Electric  Company
(NYSE: BGE) announced today the formation of a power marketing  subsidiary to be
headquartered in Baltimore, Maryland. In conjunction with this announcement, BGE
announced that Goldman  Sachs,  through its affiliate  Goldman Sachs Power,  has
agreed to be the  exclusive  advisor to the new entity for risk  management  and
power marketing.

The creation of the power  marketing  subsidiary  is a strategic  move to expand
BGE's  diversified  energy  businesses and position it for the new,  competitive
environment.  BGE's Board of  Directors  approved a capital  investment  of $100
million for the new power marketing subsidiary.

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The new company,  which has been named Constellation Power Source, Inc., will be
a  wholly-owned  subsidiary of BGE.  Constellation  Power Source will sell power
products to wholesale customers nationwide.  It will provide energy to customers
to  meet   short-term   or  long-term   demand,   and  offer  a  wide  array  of
customer-oriented  products,  including  risk  management  for  electricity  and
related fuels.

Commenting on the announcement,  Christian H. Poindexter,  Chairman of the Board
and Chief  Executive  Officer of BGE,  said,  "This is a home run.  We've made a
significant financial commitment to Constellation Power Source, created a strong
and  well-respected  management  team,  and tapped the  finest  risk  management
expertise in the world."

Mr. Poindexter  continued,  "The formation of Constellation Power Source and the
exclusive  advisory  relationship  with  Goldman  Sachs  Power will enable us to
leverage our 180 years of experience in managing,  distributing,  marketing, and
selling energy products,  and to benefit from the  unparalleled  risk management
expertise of Goldman Sachs."

Charles W.  Shivery has been named Chief  Executive  Officer of the new company.
Previously,  Mr.  Shivery  was  Vice  President,  Finance  &  Accounting,  Chief
Financial  Officer,  and Secretary of BGE. Mr.  Shivery  said,  "BGE's new power
marketing  company  combines the strengths of the oldest utility  company in the
U.S.  with one of the premier  international  investment  banks.  This move will
enable  BGE to compete on a  national  scale and to play to its  strengths  in a
competitive energy environment."

Constellation  Power Source will be headquartered in Baltimore and will comprise
approximately 50 personnel, which includes a significant number of professionals
from Goldman Sachs Power who will provide services to the new company.

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"The decision to locate a leading-edge  company like Constellation  Power Source
in Baltimore is a reflection of our continuing efforts to strengthen  Maryland's
business climate," said Maryland Governor Parris N. Glendening.  "BGE has always
been a premier corporate citizen and we applaud its decision."

Founded in 1816,  BGE is the nation's  first gas utility and one of its earliest
electric  utilities,  with  a  tradition  of  superior,   low-cost  service  and
reliability.  With  assets of more than $8  billion,  BGE  serves  more than one
million business and residential electric customers and 550,000 gas customers in
the 2,300  square-mile  area  encompassing  Baltimore City and all or part of 10
Central Maryland counties.

As announced on September 25, 1995,  BGE and PEPCO plan to merge to create a new
regional energy company called Constellation  Energy Corporation.  The merger is
the largest combination of two electric utility companies and will create one of
the 10 largest electric utility  companies in the U.S.,  serving a population of
4.5 million, with 1.8 million electric customers and over 550,000 gas customers.
Constellation  Energy will have assets exceeding $15 billion and annual revenues
of approximately $5 billion. Upon completion of the merger,  Constellation Power
Source will  become a  subsidiary  of  Constellation  Energy,  as will all other
subsidiaries of BGE and PEPCO.


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