FPL in talks to buy Constellation Energy

BALTIMORE – Shares of power-plant operator Constellation Energy Group Inc. surged Wednesday on news that Florida power company FPL Group Inc. is in talks to buy Constellation for more than $11 billion in a deal that would create a huge electricity conglomerate stretching from Maine to Florida.

Shares of Constellation rose $5.23, or 9 percent, to $61.50 in afternoon trading on the New York Stock Exchange, still below the stock’s 52-week high of $62.60. Shares of FPL rose 13 cents to $43 on the NYSE.

The New York Times reported Wednesday, citing people briefed on the negotiations, that the negotiations could lead to an announcement within the next two weeks, although the sources cautioned that talks were at a delicate stage and also could collapse.

Constellation Energy Group owns Baltimore Gas and Electric Co., the utility serving the Baltimore metropolitan region, and 10 power plants around the country. It reported $12.5 billion in revenue in 2004.

FPL Group Inc., based in Juno Beach, Fla., is the parent company of Florida Power & Light Co., serving 4.2 million customers and annual revenue of $10 billion.

Constellation spokesman Rob Gould declined to comment on the report. FPL spokesman Bill Swank said it was company policy not to comment on speculation or rumor and that he had no information about whether the report was true.

Mayo Shattuck, Constellation’s chief executive officer, has been aggressively remaking the company into a high-growth power marketer with national brand recognition. The company has gone after nuclear and other power-generating assets and has pursued customers in deregulated markets.

The company is seeking permission to build and operate a giant nuclear reactor, and has launched a joint venture to market a generation of new nuclear reactors to utilities nationwide.

Buying Constellation would give FPL a much greater national presence. While it has operations in 26 states, Florida Power & Light accounts for 90 percent of its revenue.

In 1999, as a result of legislated restructuring of Maine’s electrical power industry, FPL Energy, a subsidiary of FPL Group, bought all of Central Maine Power’s power-generating assets in the state. Included in the deal were 31 hydroelectric dams, three oil-fired power plants and a wood-fired plant in Fort Fairfield.

Steven Stengel, spokesman for FPL Energy, said Wednesday that the company now owns 28 dams in Maine on the Androscoggin, Kennebec, Presumpscot, Saco and Sebasticook rivers.

One of the oil-fired plants, the former Mason Station in Wiscasset, was sold in 2003 by FPL Energy to National RE/Sources of Greenwich, Conn., which plans to redevelop the defunct facility into waterfront condominiums, retail shops, a marina and other uses. Other power plants acquired by FPL Energy from CMP were Wyman Station on Cousins Island in Yarmouth and the Cape Station plant in South Portland.

In New Hampshire, FPL Energy owns the 1,220-megawatt nuclear power plant in Seabrook.