LATE IN 2005, FPL GROUP AND CONSTELLATION ENERGY GROUP announced plans to merge, creating the United States' largest competitive energy supplier and its second-largest electric utility, pairing Florida Power & Light (FPL) and Baltimore Gas & Electric (BGE). The transaction will create a company with a market capitalization of approximately US$28 billion, combined annual revenues of $27 billion and $57 billion in assets.

The combined company will be named Constellation Energy and will maintain dual headquarters in Juno Beach, Florida, and Baltimore, Maryland. It will serve more than 5.5 million electric customers in Florida and Maryland, and its generation portfolio will exceed 45,000 MW of capacity.

Lewis Hay III, the current chairman, president and CEO of FPL Group, will become CEO of the new Constellation Energy. “This historic transaction will create growth potential for the combined enterprise that exceeds what our two companies could have achieved separately,” Hay said. “It brings together two strong, successful industry leaders with extensive and complementary assets and skill sets, combining the best of the regulated utility and competitive energy sectors.”

With this transaction, the two companies are building an entity that will be positioned for success in competitive energy markets. Constellation Energy is the established leader in wholesale and retail competitive power supply, serving a customer peak load of more than 35,000 MW. FPL Energy brings a renewable energy platform and a diversified, high-performing portfolio of nearly 12,500 MW of capacity that more than doubles Constellation Energy's equally diversified and high-performing fleet, which totals nearly 12,000 MW.

Constellation believes that pairing FPL and BGE will create a stronger and more diversified regulated utility business. This business will contribute approximately half of the combined company's earnings, providing a strong, balanced base on which to build.

The companies should receive regulatory approvals in 9 to 12 months and intend to seek shareholder approval in the second quarter of 2006.