BGE’s parent company, Constellation Energy, has announced it will sell the company for $4.7 billion.

Aside from the fact that our area will lose one of its two Fortune 500 companies, why should you care?

First of all, it’s a clear indication that our area businesses are suffering in the slumping economy. Stocks on Wall Street have lost — get this — $1 trillion in value this week, according to a live report just aired on CNN.

You may remember a post here back on August 13. We reported then what came true now — Constellation was in danger of getting its bond rating downgraded even more, meaning they would have been forced to post some collateral that they didn’t even have.

It might actually be good news to us, in the end.

The reason for that is because Constellation sold out to Warren Buffett’s MidAmerican Energy Holdings, according to The Sun. MidAmerican is a massive energy company, specializing in energy production from all sorts of sources. They use natural gas, hydroelectricity, nuclear, coal, geothermal and wind. They have nearly 7 million electricity companies.

Remember all that you learned in school about “economies of scale,” or at least hopefully you vaguely remember it? Basically, the theory is that MidAmerican should be able to offer cheaper electricty as their number of customers (and power plants) increases. So will we actually see a rate reduction here in Maryland?

Probably not, especially because our electricity is deregulated. But, it might be an incentive to MidAmerican to pursue alternative sources of energy, perhaps with a little government incentive (if they have any money left from bailing out all these other companies), and offer them to customers in our state for cheaper rates.

As far as mergers go, MidAtlantic is a pretty good buyer. They say they will allow Constellation to run as a separate entity, but pool its resources with the rest of the company.

This, in the end, will probably be beneficial to everyone here in the state.

What do you think?

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