EHHIBIT 99
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[BGE and Pepco Letterhead]


                                  NEWS RELEASE




December 22, 1997                     Contact:  Art Slusark (BGE) 410-234-7433

For Immediate Release                           Nancy Moses (PEPCO) 202-872-2680




             BGE AND PEPCO ANNOUNCE CANCELLATION OF PROPOSED MERGER
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      Today Baltimore Gas and Electric  Company (BGE) and Potomac Electric Power
Company  (Pepco)  announced they have decided to cancel their proposed merger to
create  one  of  the  nation's  ten  largest  utilities,   Constellation  Energy
Corporation. A $15 billion electric and gas company,  Constellation Energy would
have  served  the needs of nearly 2 million  energy  customers  in the  combined
Baltimore-Washington area.

      In a joint statement, BGE's Chairman and Chief Executive Officer Christian
H. Poindexter and Pepco's President and Chief Executive Officer John M. Derrick,
Jr.,  expressed  their deep  disappointment  in having to  terminate  the merger
agreement, which was signed September 22, 1995.

      As proposed,  Constellation  Energy  would have been a strong,  successful
competitor in the emerging  energy  market," said the two CEOs. "The benefits of
such a company to the Baltimore-Washington  region cannot be overstated in terms
of  lower 

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costs,  innovative products and services,  proactive economic  development,  and
continued commitment to the community."

      Poindexter  explained  that although BGE and Pepco had been  successful in
securing the regulatory  approvals  needed to merge,  "the orders issued by both
the  Maryland  and  District  of Columbia  Public  Service  Commissions  contain
financial conditions that make it impossible for the two companies' investors to
share in the benefits of the proposed merger."

      BGE and Pepco's  proposed  regulatory  plan called for an equal sharing of
the savings between customers and  shareholders.  Both the Maryland and D.C. PSC
orders returned more than the estimated  total merger savings to customers.  "We
have tried  unsuccessfully to obtain  reconsideration of these conditions," said
Derrick and  Poindexter,  "but now conclude that a favorable  outcome  cannot be
expected within a reasonable period, if at all."

      "BGE and Pepco shareholders  overwhelmingly  supported the proposed merger
because it appeared to be a fair deal for everyone  involved," added Poindexter.
"To  sacrifice  shareholders'  interests  by  proceeding  with the merger  under
detrimental  financial  terms and conditions  would  represent a major breach of
faith."

      Poindexter  and  Derrick  also  cited  efforts  underway  in  Maryland  to
restructure the electric industry as a contributing  factor in their decision to
end the merger at this time.  "The Maryland  Public  Service  Commission and the
Maryland  legislature are working toward reshaping the state's electric industry
to allow for full customer choice in the near future.  BGE and Pepco must commit
their full attention to addressing the many complex

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and  controversial  aspects  of  restructuring  because  it is  imperative  that
Maryland gets electric industry restructuring right the first time."

      Both  Derrick  and  Poindexter  emphasized  that  the two  companies  will
continue to work closely together to ensure the region's  successful  transition
to a competitive energy market.

      The companies have spent approximately $100 million to date on the merger,
including various computer system  modifications.  These costs were to be shared
equally,  and the merger costs will be written off by Pepco and BGE in 1997. The
companies  will  take  appropriate  steps  to  terminate  regulatory  and  court
proceedings shortly.

      Both CEOs said that it is a testimony  to the caliber of  employees at BGE
and Pepco that, despite recent  frustrating  events, the merger ends with mutual
respect and positive regard.

      "We came  together  in a spirit  of  partnership  and  cooperation,"  said
Poindexter and Derrick.  "Both  companies  acted with integrity and put the best
interests of Constellation Energy before those of the individual  companies.  We
can't  thank  our  employees  enough  for the  hard  work  and  excitement  they
contributed  to this  effort.  Despite the  outcome,  it has provided a valuable
learning experience for all of us, both personally and professionally."

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