The Exelon–Constellation Merger: "Hyperbole" or Fact?

Last fall I testified in the merger proceeding before the Maryland Commission (the testimony was on behalf of the State of Maryland).  Summarizing about 40 pages of analysis, I commented that the merger would attach Baltimore Gas & Electric (Constellation's utility subsidiary) to "a corporate positioning trajectory that is unknown, unbounded by Maryland's public interest and largely outside the Commission's control, permanently."  One of the Applicants' witnesses objected to this statement as "hyperbole," "designed to shock the Commission."

Sometimes the truth is so stark it seems like hyperbole.  To see the transaction described factually, in the "raw" as this witness put it, unadorned by non-factual, unprovable adjectives and adverbs -- perhaps that is "shocking."  But a textual analysis of each of my phrases shows that the "hyperbole" charge fails:

"Corporate" describes the legal form of a business in which the owners cannot be sued directly.  See Black's Law Dictionary.

"Positioning" is a term commonly used by corporate planners to describe what they do to succeed in the market.  See, e.g., A. Ries and J. Trout, Positioning:  The Battle for Your Mind.

"Trajectory" is a "path, progression or line of development."  Merriam-Webster, http://www.merriam-webster.com/dictionary/trajectory

"Unknown" is factually true because the Applicants had told the Commission nothing specific about what businesses the merged entity would start, acquire, or expand.

"Unbounded by Maryland's public interest" was factual because the Applicants opposed a merger condition under which the Commission would apply its public interest standard to Exelon's future activities.  Exelon insisted that all holding company activities outside Maryland were beyond the Maryland Commission's jurisdiction, and in testimony opposed all conditions to remedy that situation.

"Largely outside the Commission's control" was factual because the only controls remaining for the Commission (given the previous point) were (a) penalizing BGE for poor performance -- an action with real limits because penalties can weaken a utility's ability to serve; and (b) revoking BGE's right to serve (a very blunt tool almost never used by commissions).

"Permanently" was likely factual because the Applicants had proposed no termination date for their proposed coupling; although a more accurate substitute for "permanently" would be "until Exelon decides, using powers it has but would deny to the Commission, to shed BGE or one or more other affiliates."

Instead of the "hyperbole" of the phrase "a corporate positioning trajectory that is unknown, unbounded by Maryland's public interest and largely outside the Commission’s control, permanently," I could have said this:

“The merger will attach BGE to "a plan, progression or line of development, conceived by an entity whose owners cannot be sued, whose purpose is to succeed in markets other than the market which BGE is statutorily obligated to serve, under conditions which the Applicants have declined to describe to the Commission, under conditions in which the Commission has no power to prevent affiliate actions which might harm BGE, unless and until Exelon decides, using powers it has but would deny to the Commission, to shed BGE or one or more other affiliates."

I find my original phrase more succinct and less dramatic, but both are factual.  The witness never identified an inaccuracy.

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The Applicants ultimately agreed to a version of a condition proposed in my testimony.  The condition preserves the Commission’s ability to require the merged entity to spin off BG&E should the Commission find that its relationship to this unbounded business arrangement becomes detrimental to BGE’s customers.

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