Constellation Energy (CEG) is located in Baltimore. Their divisions include merchant energy and as of May 3, 1999,
Baltimore Gas & Energy (BGE). Transforming (CEG) into the holding company for BGE and its affiliates and strengthened their ability to compete with energy companies across the nation.
The Group is now in a great position for its sector. It is a solid regional utility company in the Mid-Atlantic region and seem to have a highly valuable base-load power plant portfolio in PJM.
PJM handles the buying, selling and delivery of wholesale electricity through the Energy Market. In its role as a market operator, PJM balances the needs of suppliers, wholesale customers and other market participants and monitors market activities to ensure open, fair and equitable access to energy.
Most of
(CEG) earnings come from competitive markets. The firm's low-cost nuclear and coal base-load facilities are concentrated in the desirable PJM power markets. The huge run up in U.S. gas and power prices has benefited these units substantially, and the company is ready to extend these benefits as its legacy fixed-price contracts roll off.
On 12/19/05
(CEG) announced they signed a definitive agreement with Florida Power & Light (FPL) which if approved will create the nation’s largest competitive energy supplier. The merger could create an energy company with a market capitalization of approximately $28 billion (based on current market values), with a combined annual revenues of $27 billion, and $57 billion in total assets.
A merger with (FPL) could help
(CEG)'s growth while lowering its risk profile. If approved, this merger would create a premier East Coast utility with two big benefits: First, it solves the problem of
(CEG)'sincreasingly unbalanced risk profile by adding (FPL's) regulated utility earnings to the mix, lowering merchant generation's contribution to earnings. It also creates new opportunities for
(CEG) trading group by allowing it to use (FPL's) merchant portfolio as a platform to work around.
(CEG) financial health looks good. The company has used strong free cash flow to reduce its debt to 43% of total capital at the end of 2005. This merger with (FPL) could only improve
(CEG) financial position.
They closed the market on Tuesday, April 4th @ $55.23. That is $7.37 or 11% off their 52 week high of $62.60 on 10/04/05. Their 52 week low was $49.58 on 3/29/05.
Investing in energy companies can be risky but
Constellation might be one to look at. Can
(CEG) control their “energy” and make you a profit?
