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Exelon board asks Rowe to delay retirement, stay on another 18 months

Exelon Corp.'s board of directors asked Chairman and CEO John Rowe to stay on with the company for another 18 months, the company said in a Form 8-K filed Oct. 29.

The board on Oct. 27 approved an amendment to Rowe's contract to extend his retirement date to Dec. 31, 2012, from July 1, 2011, the company said.

The amendment also retains the phase-out of regular and change-in-control severance benefits as of July 1, 2011, eliminating a severance payment payable on any termination of employment after July 1, 2011, and eliminates post-retirement income tax preparation, financial and estate planning services.

The amendment does not affect any other compensation or benefits, Exelon said.

Constellation on hunt for plants in New England, Texas to align with retail

Following NRG Energy Inc.'s success in reducing risks by aligning its wholesale generation load with a retail customer base through the acquisition of Reliant Energy Retail Holdings, Constellation Energy Group Inc. said Oct. 30 it wants to seek the same alignment and will acquire power plants in the New England and ERCOT markets to achieve it.

Chairman, President and CEO Mayo Shattuck III said during the company's third-quarter earnings call that Constellation has achieved tremendous success in 2009 in the PJM and New York ISO markets, where generation from its wholesale assets have aligned with its customer supply business' retail customers. Aligning generation assets with retail customers reduces collateral posting requirements and effectively lowers risk as the retail business is countercyclical to the wholesale generation business, Shattuck said.

However, in New England and Texas, Shattuck said, Constellation does not own significant generation assets and its customer supply business does serve a large number of customers. Shattuck said Constellation will rectify the misalignment by seeking to acquire power plants in those markets once the company gets $1 billion to reinvest at the closing of the company's deal to sell half its nuclear assets to EDF Group.

If the EDF deal does not close for some reason, executives on the call said Constellation will still pursue the strategy and will fund the acquisitions by issuing equity with some debt issuance as needed to maintain investment-grade credit ratios.

SMUD completes decommissioning of long-shut nuke

The Sacramento Municipal Utility District has successfully completed the decommissioning of its Rancho Seco nuclear plant, which was shut down following a public vote two decades ago.

The U.S. NRC has released most of the former plant site, in Herald, Calif., for unrestricted public use, SMUD said in an Oct. 23 news release. Eighty acres of the site now fall below the NRC's regulatory requirements of a maximum annual dose of 25 millirem from residual contamination. The average person in the United States receives about 300 millirem a year from background or natural radiation.

About 11 acres of land, including a storage building for low-level radioactive waste and a dry-cask spent fuel storage facility, will remain under NRC licenses. SMUD said it will continue to secure and protect the remaining NRC-licensed land and facilities until all radioactive material is removed from the site. According to an earlier NRC release, SMUD will be required to maintain $100 million in liability insurance coverage until all radioactive material has been removed.

The NRC initially issued SMUD an operating license for Rancho Seco in 1974, and the plant began commercial operation in 1975. The plant performed below expectations and was shut down as a result of a voter initiative in June 1989, many years before its license was scheduled to expire. In recent years, SMUD has discussed the idea of installing solar power generation on a portion of the former nuclear plant grounds.

The Rancho Seco experience has been cited by some analysts as a cautionary tale that should cause public power utilities to think twice before investing in new nuclear generation.

 5 years ago this week

On Nov. 3, 2004, a federal jury in Houston found four former Merrill Lynch executives and one former Enron Corp. executive guilty of conspiracy and fraud for their parts in what prosecutors said was a bogus year-end 1999 deal that involved the "parking" of Enron assets with Merrill Lynch to falsely inflate Enron's profits.

Essentially, prosecutors said the Merrill Lynch executives agreed to a scheme designed to create the appearance that Merrill Lynch purchased a $7 million stake in three electricity generating barges owned by Enron, when in fact they had a secret deal in which an Enron-related entity would reverse the deal with a guaranteed profit to Merrill Lynch. Enron then used the barge deal to boost year-end 1999 financial earnings reports, which were presented to the public and used to pay its executives unwarranted bonuses.

10 years ago this week

An investor group led by Warren Buffett's Berkshire Hathaway Inc. reached a definitive agreement to acquire MidAmerican Energy Holdings Co. for approximately $9 billion. The purchase price of $35.05 per share represents a 29% premium over the Oct. 22, 1999, closing price of $27.25. The other investors are Walter Scott, MidAmerican's largest individual shareholder, and David Sokol, the chairman and CEO of MidAmerican. The transaction is the first entry by Berkshire Hathaway into the energy sector, endorsing MidAmerican's growth strategy as a global energy provider delivering quality service and value to customers, according to a release by the company.