A MASSIVE, WORLD WAR I-era building in downtown Baltimore houses Constellation Power Source, an unregulated, wholly owned power-marketing subsidiary of Baltimore Gas and Electric Co. Upon introducing the new company in February, BG&E announced that Goldman Sachs would serve as "exclusive advisor" for the start-up.
Later, when asked to clarify the relationship between the two companies, Charles W. Shivery, chair, president and CEO of Constellation Power Source, acknowledged that, "We always get asked this question and it's covered by a whole set of confidentiality requirements."
Constellation Power Source he explained, has an "exclusive advisory and risk management relationship" with a Goldman Sachs subsidiary, Goldman Sachs Power. "The benefit we get is that Goldman Sachs Power has a lot of experience in trading commodities and they have a lot of experience in managing risk associated with trading those commodities. We have a lot of experience on the physical side of electricity1/4 What we've really done is melded the core competencies together1/4 into a company that brings together the best of those worlds."
Constellation Power began trading long-term electricity in May, when it received its wholesale power marketing license from the Federal Energy Regulatory Commission. CPS is just getting into the hourly and daily markets, Shivery explains, during a tour of the company's temporary electricity trading floor. (A move to permanent quarters in the Inner Harbor area is set for January.)