Aides for state Attorney General Douglas F. Gansler have sent a notice to Baltimore Circuit Court that the state plans to file a motion to dismiss the appeal.
The state Public Service Commission ruled that it had the right to sign off - or not - on a plan by Paris-based EDF to purchase half of Constellation's nuclear power business. The commission claimed that the $4.5 billion deal could result in "substantial influence" over the regulated utility Baltimore Gas and Electric (BGE), which Constellation owns.
Within one hour of the ruling, Constellation filed a lawsuit, saying that the commission's approval was not necessary and would constitute a breach of an agreement stipulated in state law.
The state fired back, claiming that Constellation cannot appeal a decision by the commission while the deal is still being decided.
Assistant Attorney General William Brockman said in the notice that Constellation's request amounted to "piecemeal litigation," and that the court could not interfere while negotiations were ongoing. "Until those proceedings are concluded and a final order is issued, however, the court lacks jurisdiction over the ongoing administrative proceedings," he said.
Deputy Attorney General John B. Howard Jr. said that the lawsuit was off base. "There is no merit to what they are arguing," he said.
Gov. Martin O'Malley, visibly irritated at a press conference, said he would like to see Constellation give numerous givebacks to BGE customers, including a 10 percent rebate on annual electricity bills and contribute $20 million a year to a program that helps low-income residents pay their utility bills.
"We will spare no expense at retaining experts to defend the public's interest," Mr. O'Malley said. "We will not take it on faith or handshake that this is in the public interest when the public has been so poorly treated by Constellation Energy."
Mr. O'Malley, a Democrat, also accused Constellation of making money at the expense of ratepayers. "They are standing for one thing and one thing only: the profit motive," he said.
Constellation spokesman Rob Gould said that he found Mr. O'Malley's accusation "puzzling," because he and the commission regulate the final rate of return for ratepayers.
"The idea that Constellation is somehow making money off the backs of BGE ratepayers is absurd," Mr. Gould said.
According to a $2 billion settlement reached by state officials and Constellation and approved by the General Assembly last year, the state agreed to give up regulatory obligations over any deal involving the transfer of up to 20 percent of the company's stock. Constellation says that the deal would give EDF control over about 9 percent of its stock.
Mr. Gould warned that if the transaction is compromised by regulators, it could jeopardize other BGE projects that are related to the EDF deal, including the construction of a nuclear power plant at Calvert Cliffs.
"We believe that this investment needs to get done, and it's the BGE customer and the state of Maryland that will lose if this investment does not take place," he said.