Constellation Separation on Track, 1Q Earnings Up Shareholders Told

Apr 27, 2001, 01:00 ET from Constellation Energy Group, Inc.

    BALTIMORE, April 27 /PRNewswire/ -- Christian H. Poindexter, Chairman and
 CEO of Constellation Energy Group (NYSE:   CEG), told shareholders here today
 that the holding company's strategy of separating into two, publicly traded
 corporations is on schedule for this year.  A new Constellation Energy Group
 and a new BGE Corp. will both be headquartered in Baltimore.
     Mr. Poindexter said a request has been filed with the IRS to make
 separation "a tax-free event for the company's shareholders," and that an
 application has been filed with the U.S. Nuclear Regulatory Commission.  He
 noted that the U.S. Federal Energy Regulatory Commission has granted approval
 for the separation and that Constellation Energy Group will file a detailed
 report with the Maryland Public Service Commission on May 9.
     "The precise timing of separation is dependent upon the decisions of the
 various agencies ... and we fully expect the transaction will be completed
 during the second half of this year," he added.  Mr. Poindexter also told
 shareholders that, "Despite the slowdown in the economy and the turmoil in
 California, we have a positive story to report.  Operating earnings for the
 first quarter of this year came in at 68-cents per share compared to 50-cents
 per share for the same quarter in 2000."
     The new Constellation Energy Group is designed to be a national leader in
 the wholesale merchant energy business.  It will include the current holding
 company's nuclear and fossil fuel electric generating plants, eight gas-fired
 plants under construction in seven other states, Constellation Nuclear, and
 nationally ranked marketing and trading business Constellation Power Source.
 "We are anticipating investing more than $1 billion a year over the next
 several years to grow our portfolio of generating plants," Mr. Poindexter
 said.
     Also, up to a 17.5-percent equity investment by Goldman Sachs is
 forthcoming prior to separation.
     Mr. Poindexter will become Chairman and CEO of the new Constellation
 Energy Group and Edward A. Crooke will become Chairman, President, and CEO of
 the new BGE Corp.  Mr. Crooke is now Vice Chairman of Constellation Energy
 Group.
     "BGE Corp. will be a holding company with assets of $5.5 billion and with
 three core regional energy delivery and energy services subsidiary companies,"
 Mr. Crooke told shareholders.  "Those businesses are Baltimore Gas and
 Electric Company, the regulated franchised energy delivery company, and BGE
 HOME and Constellation Energy Source, our non-regulated energy products and
 services businesses."
     "We are investing in the growth of our system to include more than 15,000
 new electric delivery customers and 13,000 gas delivery customers annually,"
 he added.  "In addition, we are improving our infrastructure to enhance
 reliability while reducing the cost of system operations.  In total, we plan
 to spend more than $250 million this year alone."
     BGE currently has 1.1 million electric customers and nearly 600,000
 natural gas customers in Central Maryland.
     "BGE Corp.'s initial earnings will be about a third of recent
 Constellation Energy Group earnings," Mr. Crooke said.  "We anticipate that we
 will be able to achieve about a 5-percent rate of growth and will continue
 paying annual dividends at the current rate.  Dividends can be expected to
 increase in the future as earnings growth permits.  We believe this will
 produce a total return to common shareholders that will be competitive with
 the top-tier regulated energy delivery companies," he added.
 
     Forward-Looking Statement
     Statements are made in this press release that are considered forward-
 looking statements within the meaning of the Securities Exchange Act of 1934.
 Sometimes these statements will contain words such as "believes," "expects,"
 "intends," "plans," and other similar words.  These statements are not
 guarantees of future performance and are subject to risks, uncertainties and
 other important factors that could cause actual performance or achievements to
 be materially different from those projected.  These risks, uncertainties and
 factors include, but are not limited to: ability to obtain all regulatory
 approvals necessary to complete the separation of the merchant energy business
 from the retail services business; satisfaction of all conditions precedent to
 the closing on Constellation Energy Group's purchase of the Nine Mile Point
 nuclear power plant; satisfaction of all conditions precedent to a transaction
 with an affiliate of the Goldman Sachs Group. Inc. in which it will buy a
 minority interest in our merchant energy business; general economic, business
 and regulatory conditions; the pace and nature of deregulation nationwide
 (including the status of the California markets) energy supply and demand;
 competition; federal and state regulations; availability, terms and use of
 capital; nuclear and environmental issues; weather; implications of the Order
 issued by the Maryland PSC regarding implementation of customer choice in
 Maryland including appeals of the order; commodity price risk; operating
 generation assets in a deregulated market without the benefit of a fuel rate
 adjustment clause; loss of revenues due to customers choosing alternative
 suppliers; higher volatility of earnings and cash flows; increased financial
 requirements of nonregulated subsidiaries; inability to recover all costs
 associated with providing electric retail customers service during BGE's
 electric rate freeze period; implications from the transfer of BGE's
 generation assets and related liabilities to nonregulated subsidiaries of
 Constellation Energy Group, including the outcome of an appeal of the PSC
 order regarding the transfer, and force majeure-events (events beyond our
 control) such as acts of nature, changes in laws, labor strikes, and work
 stoppages, especially as they could impact plant construction or operation.
 Given these uncertainties, undue reliance should not be placed on these
 forward-looking statements.  Please see periodic reports filed with the
 Securities and Exchange Commission for more information on these factors.
 These forward-looking statements represent estimates and assumptions only as
 of the date of this press release, and no duty is undertaken to update any
 forward-looking statements to reflect new information, events or circumstances
 after the date of this press release or to reflect the occurrence of
 unanticipated events.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X43564287
 
 

SOURCE Constellation Energy Group, Inc.
    BALTIMORE, April 27 /PRNewswire/ -- Christian H. Poindexter, Chairman and
 CEO of Constellation Energy Group (NYSE:   CEG), told shareholders here today
 that the holding company's strategy of separating into two, publicly traded
 corporations is on schedule for this year.  A new Constellation Energy Group
 and a new BGE Corp. will both be headquartered in Baltimore.
     Mr. Poindexter said a request has been filed with the IRS to make
 separation "a tax-free event for the company's shareholders," and that an
 application has been filed with the U.S. Nuclear Regulatory Commission.  He
 noted that the U.S. Federal Energy Regulatory Commission has granted approval
 for the separation and that Constellation Energy Group will file a detailed
 report with the Maryland Public Service Commission on May 9.
     "The precise timing of separation is dependent upon the decisions of the
 various agencies ... and we fully expect the transaction will be completed
 during the second half of this year," he added.  Mr. Poindexter also told
 shareholders that, "Despite the slowdown in the economy and the turmoil in
 California, we have a positive story to report.  Operating earnings for the
 first quarter of this year came in at 68-cents per share compared to 50-cents
 per share for the same quarter in 2000."
     The new Constellation Energy Group is designed to be a national leader in
 the wholesale merchant energy business.  It will include the current holding
 company's nuclear and fossil fuel electric generating plants, eight gas-fired
 plants under construction in seven other states, Constellation Nuclear, and
 nationally ranked marketing and trading business Constellation Power Source.
 "We are anticipating investing more than $1 billion a year over the next
 several years to grow our portfolio of generating plants," Mr. Poindexter
 said.
     Also, up to a 17.5-percent equity investment by Goldman Sachs is
 forthcoming prior to separation.
     Mr. Poindexter will become Chairman and CEO of the new Constellation
 Energy Group and Edward A. Crooke will become Chairman, President, and CEO of
 the new BGE Corp.  Mr. Crooke is now Vice Chairman of Constellation Energy
 Group.
     "BGE Corp. will be a holding company with assets of $5.5 billion and with
 three core regional energy delivery and energy services subsidiary companies,"
 Mr. Crooke told shareholders.  "Those businesses are Baltimore Gas and
 Electric Company, the regulated franchised energy delivery company, and BGE
 HOME and Constellation Energy Source, our non-regulated energy products and
 services businesses."
     "We are investing in the growth of our system to include more than 15,000
 new electric delivery customers and 13,000 gas delivery customers annually,"
 he added.  "In addition, we are improving our infrastructure to enhance
 reliability while reducing the cost of system operations.  In total, we plan
 to spend more than $250 million this year alone."
     BGE currently has 1.1 million electric customers and nearly 600,000
 natural gas customers in Central Maryland.
     "BGE Corp.'s initial earnings will be about a third of recent
 Constellation Energy Group earnings," Mr. Crooke said.  "We anticipate that we
 will be able to achieve about a 5-percent rate of growth and will continue
 paying annual dividends at the current rate.  Dividends can be expected to
 increase in the future as earnings growth permits.  We believe this will
 produce a total return to common shareholders that will be competitive with
 the top-tier regulated energy delivery companies," he added.
 
     Forward-Looking Statement
     Statements are made in this press release that are considered forward-
 looking statements within the meaning of the Securities Exchange Act of 1934.
 Sometimes these statements will contain words such as "believes," "expects,"
 "intends," "plans," and other similar words.  These statements are not
 guarantees of future performance and are subject to risks, uncertainties and
 other important factors that could cause actual performance or achievements to
 be materially different from those projected.  These risks, uncertainties and
 factors include, but are not limited to: ability to obtain all regulatory
 approvals necessary to complete the separation of the merchant energy business
 from the retail services business; satisfaction of all conditions precedent to
 the closing on Constellation Energy Group's purchase of the Nine Mile Point
 nuclear power plant; satisfaction of all conditions precedent to a transaction
 with an affiliate of the Goldman Sachs Group. Inc. in which it will buy a
 minority interest in our merchant energy business; general economic, business
 and regulatory conditions; the pace and nature of deregulation nationwide
 (including the status of the California markets) energy supply and demand;
 competition; federal and state regulations; availability, terms and use of
 capital; nuclear and environmental issues; weather; implications of the Order
 issued by the Maryland PSC regarding implementation of customer choice in
 Maryland including appeals of the order; commodity price risk; operating
 generation assets in a deregulated market without the benefit of a fuel rate
 adjustment clause; loss of revenues due to customers choosing alternative
 suppliers; higher volatility of earnings and cash flows; increased financial
 requirements of nonregulated subsidiaries; inability to recover all costs
 associated with providing electric retail customers service during BGE's
 electric rate freeze period; implications from the transfer of BGE's
 generation assets and related liabilities to nonregulated subsidiaries of
 Constellation Energy Group, including the outcome of an appeal of the PSC
 order regarding the transfer, and force majeure-events (events beyond our
 control) such as acts of nature, changes in laws, labor strikes, and work
 stoppages, especially as they could impact plant construction or operation.
 Given these uncertainties, undue reliance should not be placed on these
 forward-looking statements.  Please see periodic reports filed with the
 Securities and Exchange Commission for more information on these factors.
 These forward-looking statements represent estimates and assumptions only as
 of the date of this press release, and no duty is undertaken to update any
 forward-looking statements to reflect new information, events or circumstances
 after the date of this press release or to reflect the occurrence of
 unanticipated events.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X43564287
 
 SOURCE  Constellation Energy Group, Inc.

RELATED LINKS

http://www.BGE.com