By Baltimore Business Journal

A top adviser to EDF Group Inc. is recommending state energy regulators reject a proposed merger of Constellation Energy Group Inc. and Exelon Corp.

Jeffrey W. Johnson, a consultant to French utility EDF, said in testimony on behalf of EDF that the risks of the deal outweigh the benefits. For EDF, one of Constellationâ¿¿s largest shareholders, the main risk is a loss of autonomy for Constellation Energy Nuclear Group. That business is a joint venture between Baltimore-based Constellation (NYSE: CEG) and EDF, owning five nuclear reactors including two in Maryland.

Whether opposition from EDF could torpedo the deal will become more clear when the Maryland Public Service Commission begins its public review in hearings starting Oct. 31. Constellation is expected to respond to criticisms of the deal in regulatory filings Oct. 12.

EDF could also make its displeasure known in a shareholder vote to consider the deal. Constellation sent a proxy ballot to shareholders Oct. 12. The vote will be held at a Nov. 17 shareholdersâ¿¿ meeting in New York.

In his testimony, Johnson argues the $7.9 billion merger would create a conflict of interest for Chicago-based Exelon (NYSE: EXC) because the company already owns 17 nuclear reactors, about 20 percent of U.S. nuclear capacity. He expressed concern Exelon could ⿿discriminate against the CENG fleet in favor of its own ⿿ financially, operationally and otherwise ⿿ to the detriment of Maryland⿿s interests as well as those of EDF.⿝

Johnson also spoke of worries that the deal could mean a loss of jobs and tax base in Maryland, particularly through a diminished investment in nuclear reactors at Calvert Cliffs in Southern Maryland.

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