8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  September 18, 2008

Commission File Number	Exact name of registrant as specified in its charter	IRS Employer Identification No.
1-12869	CONSTELLATION ENERGY GROUP, INC.	52-1964611
1-1910	BALTIMORE GAS AND ELECTRIC COMPANY	52-0280210

MARYLAND

(State of Incorporation of registrant)

100 CONSTELLATION WAY, BALTIMORE, MARYLAND	21202
(Address of principal executive offices)	(Zip Code)

410-470-2800

(Registrant’s telephone number, including area code)

NOT APPLICABLE

(Former name, former address

and former fiscal year, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

x  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Forward-Looking Statements and Additional Information

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements relating to the proposed transaction between Constellation Energy Group, Inc. and MidAmerican Energy Holdings Company and the expected timing and completion of the transaction. Words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “will,” “should,” “may,” and other similar expressions are intended to identify forward looking statements. Such statements are based upon the current beliefs and expectations of our management and involve a number of significant risks and uncertainties, many of which are difficult to predict and generally beyond the control of Constellation Energy and MidAmerican. Actual results may differ materially from the results anticipated in these forward-looking statements. The following factors, among others, could cause or contribute to such material differences: the ability to obtain the approval of the transaction by Constellation Energy’s shareholders; the ability to obtain governmental approvals of the transaction or to satisfy other conditions to the transaction on the terms and expected timeframe or at all; transaction costs; economic conditions; and the effects of disruption from the transaction making it more difficult to maintain relationships with employees, customers, other business partners or government entities. Additional factors that could cause Constellation Energy’s results to differ materially from those described in the forward-looking statements can be found in the periodic reports filed with the Securities and Exchange Commission and in the proxy statement Constellation Energy intends to file with the Securities and Exchange Commission and mail to its shareholders with respect to the proposed transaction, which are or will be available at the Securities and Exchange Commission’s Web site (http://www.sec.gov) at no charge.

This communication is being made in respect of the proposed merger transaction involving Constellation Energy and MidAmerican Energy Holdings Company. In connection with the proposed transaction, Constellation Energy will file with the Securities and Exchange Commission a proxy statement and will mail the proxy statement to its shareholders. Shareholders are encouraged to read the proxy statement regarding the proposed transaction when it becomes available because it will contain important information. Shareholders will be able to obtain a free copy of the proxy statement, as well as other filings made by Constellation Energy regarding Constellation Energy, MidAmerican Energy Holdings Company and the proposed transaction, without charge, at the Securities and Exchange Commission’s Internet site (http://www.sec.gov). These materials can also be obtained, when available, without charge, by directing a request to Constellation Energy, Shareholder Services, 100 Constellation Way, Baltimore, Maryland 21202.

Constellation Energy, MidAmerican Energy Holdings Company and their respective directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding Constellation Energy’s directors and executive officers is available in Constellation Energy’s Annual Report on Form 10-K for the year ended December 31, 2007 and Constellation Energy’s notice of annual meeting and proxy statement for its most recent annual meeting, which were filed with the Securities and Exchange Commission on February 27, 2008 and April 29, 2008, respectively. Other information regarding the participants in the solicitation and a description of their direct and indirect

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interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant materials to be filed with the Securities and Exchange Commission.

Item 8.01Other Events

On September 18, 2008, Constellation Energy Group, Inc. and MidAmerican Energy Holdings Company issued a joint press release announcing that the companies have reached a tentative agreement in which MidAmerican will acquire Constellation Energy. A copy of the joint press release is attached as Exhibit 99.1 to this report and is incorporated herein by reference. A copy of the non-binding letter agreement relating to the acquisition is attached as Exhibit 99.2 to this report and is incorporated herein by reference. In addition, Constellation Energy has distributed a communication to employees in connection with the acquisition announcement. A copy of this communication is attached as Exhibit 99.3 to this report and is incorporated herein by reference.

Item 9.01.Financial Statements and Exhibits

(d)Exhibits

Exhibit No.	Description
99.1	Joint Press Release, dated September 18, 2008.
99.2	Non-binding Letter Agreement dated September 17, 2008.
99.3	Communication to employees from Mayo A. Shattuck III, Chairman, President and Chief Executive Officer of Constellation Energy.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

		CONSTELLATION ENERGY GROUP, INC.
		(Registrant)
Date:	September 18, 2008			/s/ Charles A. Berardesco
				Charles A. Berardesco
				Vice President, Deputy General Counsel, Chief
				Compliance Officer and Corporate Secretary
			BALTIMORE GAS AND ELECTRIC COMPANY
			(Registrant)
Date:	September 18, 2008			/s/ Charles A. Berardesco
				Charles A. Berardesco
				Secretary

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Joint Press Release, dated September 18, 2008.
99.2	Non-binding Letter Agreement dated September 17, 2008.
99.3	Communication to employees from Mayo A. Shattuck III, Chairman, President and Chief Executive Officer of Constellation Energy.

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EX-99.1

Exhibit 99.1

Media Contacts:

MidAmerican Energy Holdings Company:

Sara J. Schillinger/Ann Thelen

515-242-4032/515-281-2785

Constellation Energy:

Robert L. Gould/Debra Larsson

410-470-7433

Investor Contacts (Constellation Energy):

Kevin Hadlock/Janet Mosher

410-470-3647

MidAmerican Energy Holdings Company Reaches Tentative

Agreement to Acquire Constellation Energy

DES MOINES, IOWA AND BALTIMORE – Sept. 18, 2008 – MidAmerican Energy Holdings Company and Constellation Energy (NYSE: CEG) today announced the companies have reached a tentative agreement in which MidAmerican will purchase all of the outstanding shares of Constellation Energy for a cash consideration of approximately $4.7 billion, or $26.50 per share.  The companies expect to enter into a definitive merger agreement by close of business, Sept 19.  Upon signing a definitive merger agreement, Constellation Energy will issue $1 billion of preferred equity yielding 8 percent to MidAmerican.

The tentative agreement, which has been unanimously approved by both companies’ Boards of Directors, is subject to further due diligence, as well as shareholder and customary federal, state and local regulatory approvals.  The transaction is expected to close within nine months.

“We strongly believe this transaction is in the best long-term interest of our investors, employees and the customers and communities we serve,” said Mayo A. Shattuck III, chairman, president and chief executive officer for Constellation Energy.  “The financial services sector and energy commodity markets have witnessed unprecedented volatility.  Backed by the significant industry expertise and financial

stability of MidAmerican and Berkshire Hathaway, Constellation Energy will build on its reputation as a first-choice energy solution provider for our many customers.”

“MidAmerican has been a wonderful steward of its energy assets and the acquisition of Constellation Energy, when completed, will prove beneficial to all constituents,” said Warren E. Buffett, chairman, Berkshire Hathaway.

“In Constellation Energy, we have a partner that brings a world-class organization of people and an industry-leading collection of energy assets,” said Gregory E. Abel, president and chief executive officer of MidAmerican Energy Holdings Company.  “MidAmerican is very comfortable with, and committed to, Constellation Energy’s current strategic plan. We intend, as with all of our investments, to allow Constellation Energy to operate autonomously as it pursues its long-term goals. Constellation Energy’s premier fleet of nuclear assets, and its UniStar joint venture with EDF, complements MidAmerican’s ongoing commitment to environmental initiatives, including investments in hydro, wind and geothermal energy.  Joining forces with Constellation Energy accelerates our strategic initiative to develop and build energy infrastructure assets in North America.”

Financial Advisors

Morgan Stanley and UBS Investment Bank are serving as financial advisors to Constellation Energy.

About Constellation Energy

Constellation Energy (http://www.constellation.com), a FORTUNE 125 company with 2007 revenues of $21 billion, is the nation’s largest competitive supplier of electricity to large commercial and industrial customers and the nation’s largest wholesale power seller. Constellation Energy also manages fuels and energy services on behalf of energy intensive industries and utilities. It owns a diversified fleet of 83 generating units located throughout the United States, totaling approximately 9,000 megawatts of generating capacity. The company delivers electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland.

About MidAmerican Energy Holdings

MidAmerican Energy Holdings Company, based in Des Moines, Iowa, is a global provider of energy services. Through its energy-related business platforms, MidAmerican provides electric and natural gas service to more than 6.9 million customers worldwide.

These business platforms are Pacific Power, Rocky Mountain Power and PacifiCorp Energy, which comprise PacifiCorp; MidAmerican Energy Company; CE Electric UK; Northern Natural Gas Company; Kern River Gas Transmission Company; and CalEnergy. Information about MidAmerican is available at www.midamerican.com.

Forward-Looking Statements and Additional Information

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements relating to the proposed transaction between Constellation Energy and MidAmerican Energy Holdings Company and the expected timing and completion of the transaction. Words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “will,” “should,” “may,” and other similar expressions are intended to identify forward looking statements. Such statements are based upon the current beliefs and expectations of our management and involve a number of significant risks and uncertainties, many of which are difficult to predict and generally beyond the control of Constellation Energy and MidAmerican. Actual results may differ materially from the results anticipated in these forward-looking statements. The following factors, among others, could cause or contribute to such material differences: the ability to obtain the approval of the transaction by Constellation Energy’s shareholders; the ability to obtain governmental approvals of the transaction or to satisfy other conditions to the transaction on the terms and expected timeframe or at all; transaction costs; economic conditions; and the effects of disruption from the transaction making it more difficult to maintain relationships with employees, customers, other business partners or government entities. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found in the 2007 Annual Report on Form 10-K for the year ended December 31, 2007 filed with the Securities and Exchange Commission and in the proxy statement Constellation Energy intends to file with the Securities and Exchange Commission and mail to its shareholders with respect to the proposed transaction, each of which are or will be available at the Securities and Exchange Commission’s Web site (http://www.sec.gov) at no charge.
 
This communication is being made in respect of the proposed merger transaction involving Constellation Energy and MidAmerican Energy Holdings Company. In connection with the proposed transaction, Constellation Energy will file with the Securities and Exchange Commission a proxy statement and will mail the proxy statement to its shareholders. Shareholders are encouraged to read the proxy statement regarding the proposed transaction when it becomes available because it will contain important information. Shareholders will be able to obtain a free copy of the proxy statement, as well as other filings made by Constellation Energy regarding Constellation Energy, MidAmerican Energy Holdings Company and the proposed transaction, without charge, at the Securities and Exchange Commission’s Internet site (http://www.sec.gov). These materials can also be obtained, when available, without charge, by directing a request to Constellation Energy per the investor relations contact information below.

Constellation Energy, MidAmerican Energy Holdings Company and their respective

directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding Constellation Energy’s directors and executive officers is available in Constellation Energy’s notice of annual meeting and proxy statement for its most recent annual meeting and Constellation Energy’s  Annual Report on Form 10-K for the year ended December 31, 2007, which were filed with the Securities and Exchange Commission on February 27, 2008 and April 29, 2008, respectively. Other information regarding the participants in the solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant materials to be filed with the Securities and Exchange Commission.

EX-99.2

Exhibit 99.2

MidAmerican Energy Holdings Company

666 Grand Avenue, Suite 500

Des Moines, Iowa 50309

September 17, 2008

Mr. Mayo A. Shattuck III

Chairman, President and Chief Executive Officer

Constellation Energy Group, Inc.
750 E. Pratt Street

Baltimore, Maryland 21202

Dear Mayo:

This letter agreement sets forth the agreement among MidAmerican Energy Holdings Company or its affiliate (collectively, “Purchaser”), and Constellation Energy Group, Inc. (the “Company”), pursuant to which the parties will pursue a proposed transaction which includes the principal terms described in Exhibit A annexed hereto (the “Proposed Transaction”).

1.Publicity; Public Filings.  Purchaser and the Company will consult with each other before issuing, and provide each other the reasonable opportunity to review, comment upon and concur with, any press release or other public statements with respect to this letter agreement or the transactions contemplated hereby, and shall not issue any such press release or make any such public statement prior to such consultation, unless required by applicable law or the rules of a national securities exchange.  In the event that any party concludes that it is required by law or relevant stock exchange rules to make a public statement with respect to this letter agreement or the transactions contemplated herby or make any public filing with respect thereto, including any filing with the Securities and Exchange Commission, such party will immediately provide to the other parties hereto for review a copy of any such press release, statement or filing, and will not issue any such press release, or make any such public statement or filing, prior to such consultation and review, unless required by applicable law or the rules of a national securities exchange.

2.Definitive Agreement; Diligence Access.  (a)  Purchaser and the Company will immediately commence good faith negotiations with a view to agreeing upon a definitive merger agreement, definitive preferred stock investment agreement and articles supplementary and other definitive agreements relating to the Proposed Transaction and related transactions on a basis consistent with the terms and conditions set forth on Exhibit A and which are otherwise mutually acceptable to the parties in their respective sole discretion.  It is the parties intention to work expeditiously toward execution of a definitive merger agreement, the other definitive agreements and definitive ancillary documents as soon as reasonably possible, and in any event prior to 5:00 p.m.

(New York City time) on Friday, September 19, 2008.  Purchaser agrees that it will not require a financing condition in the definitive purchase agreement.

(b)  Commencing immediately, the Company will, and will cause their respective Representatives to, provide full and immediate access to their respective properties, assets, records and employees for the purposes of allowing Purchaser and its Representatives to conduct due diligence with respect to the business of the Company and the related transactions, but only to the extent that the Company may do so without violating applicable laws or violating any non-waivable obligations to third parties.  Purchaser’s investigation shall be conducted in a manner that minimizes interference with the operation of the business of the Company.

3.Exclusivity.  During the period commencing immediately on the date of execution of this letter agreement and ending on the earlier of the date of execution of a definitive merger agreement and 5:00 p.m. New York City time, September 19, 2008 (the “Exclusivity Period”), none of the Company or any of  its subsidiaries, affiliates, officers, directors, employees, attorneys, accountants, investment bankers and other agents or representatives (collectively, “Representatives”) will, directly or indirectly, solicit, encourage, cooperate with, approve or permit any offers, bids or indications of interest, or initiate or engage in negotiations with any person other than Purchaser, with respect to the business of the Company or any part thereof or any other transaction which would conflict with the intent of this letter agreement, including without limitation any (i) direct or indirect acquisition or purchase by any person or entity of more than 10% of the voting securities of, or equity interest in, the Company or any of its material subsidiaries or (ii) merger, consolidation or sale of all or substantially all of the assets of the Company, or any recapitalization, liquidation, dissolution or similar transaction involving the Company or any material subsidiary thereof (collectively, “Alternative Transactions”).  The Company and its Representatives shall immediately cease any ongoing discussions or negotiations with any third party with respect to any Alternative Transaction.  Except as permitted by Paragraph 2 of this letter agreement, none of the Company or its Representatives shall furnish, or authorize or permit any of their respective Representatives to furnish, any information concerning this letter agreement or the transactions contemplated hereby to any person or entity or any non-public information regarding the Company’s business or any part thereof to any person or entity.  In the event that any person or entity should seek to initiate negotiations relative to an Alternative Transaction or any other material transaction regarding the Company’s business or any part thereof, the Company shall immediately notify Purchaser of such contact and the material terms and conditions of any offer.

4.Fees and Expenses.  Subject to the prior receipt of the Board Approval (as defined below in Paragraph 5), by no later than 10:00 a.m. New York City time on September 18, 2008, the Purchaser shall have received from the Company the sum of $25,000,000, in cash by wire transfer of immediately available funds to the account designated in writing by the Purchaser to the Company, which payment shall be non-refundable under any and all circumstances.  In exchange, the Purchaser agrees that it will be responsible for its own costs and expenses in connection with this letter agreement and the drafting, negotiation and execution of the definitive agreements, including all fees and expenses of its attorneys, accountants, consultants, investment bankers, finders or brokers.

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5.Non-Binding Purchase and Sale Commitment; Termination.  The parties acknowledge and agree that they have not reached agreement upon, and this letter does not reflect, all matters upon which agreement must be reached in order for the proposed acquisition to be consummated.  Moreover, this letter agreement does not obligate either party to negotiate, execute or consummate a definitive merger agreement or other definitive agreements relating to the Proposed Transaction.  A binding commitment with respect to the Proposed Transaction (or any related transaction) will result only from the execution of a definitive merger agreement, a definitive preferred stock investment agreement and other ancillary definitive agreements with respect thereto, subject to such conditions as may be contained therein, and remains subject to the prior approval of the Company’s board of directors and the exercise by the board of its fiduciary obligations.  Nonetheless, Paragraphs 1, 2, 3 and 4 and this Paragraph 5 of this letter agreement are intended to constitute binding obligations of the parties hereto.  Except for Paragraph 4 and this Paragraph 5 of this letter agreement which shall survive, this letter agreement shall terminate (i) in the event the Board of Directors of the Company does not approve this letter agreement by 9:00 a.m. New York City time on September 18, 2008 (the “Board Approval”) or (ii) in the event the Board Approval is received, upon the expiration of the Exclusivity Period, unless such period is mutually extended by the parties hereto.  This letter agreement shall be governed by and construed in accordance with the laws of the state of New York applicable to agreements made and to be performed within such state.

[Signature Page Follows]

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Please confirm that you are in agreement with the foregoing by signing the enclosed copy of this letter agreement and returning it to the undersigned before 11:59 p.m., New York City time, September 17, 2008.

Very truly yours,
MIDAMERICAN ENERGY HOLDINGS COMPANY
By:	/s/ Gregory E. Abel
	Name:  Gregory E. Abel
	Title:  President and Chief Executive Officer

Accepted and Agreed as of September17, 2008:
CONSTELLATION ENERGY GROUP, INC.
By:	/s/ Mayo A. Shattuck III
	Name:  Mayo A. Shattuck III
	Title:  Chairman, President and Chief Executive Officer

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Exhibit A
Principal Transaction Terms

CONVERTIBLE PREFERRED STOCK:
Issuer:	Constellation Energy Group, Inc., a Maryland corporation (“CEG” or the “Company”)
Purchaser:	MidAmerican Energy Holdings Company (“Purchaser”)
Type of Security:	Series A Convertible Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”).
Securities to be Purchased:	Purchaser would invest an aggregate of $1 billion (the “Invested Amount”) in exchange for shares of Series A Preferred Stock at purchase price of $100,000 per share upon the execution of the definitive purchase agreement and the receipt of any required regulatory approvals.
Terms of Series A Preferred Stock:	Dividends 8% per annum payable in cash, cumulative and compounding quarterly, payable when and as authorized by the Board of Directors of the Company (the “Board of Directors”) and prior and in preference to any other series or class of stock of the Company; restriction on payment of dividends on capital stock in any year unless all dividends on the Series A Preferred Stock have been paid in full. Such dividends shall be payable on the date prior to the payment date of the Company’s regular quarterly dividend.
	Mandatory Conversion Upon the occurrence of a Conversion Date (as defined below), the Series A Preferred Stock shall automatically convert into: (i) a number of shares of the Company’s Common Stock equal to 19.9% of the Company’s outstanding Common Stock on the date the Series A Preferred Stock Purchase Agreement is executed and (ii) $1 billion aggregate principal amount of the Company’s 14% Senior Notes having the terms described below under “Terms of 14% Senior Notes”. “Conversion Date” shall mean the first to occur of: (i) the date that is 6 months following the Purchaser’s exercise of the Limited Due Diligence Termination Right (as defined below) if the Company has not redeemed the Series A Preferred Stock by such date, (ii) the date the Merger Agreement is terminated (other than upon exercise of the Limited Due Diligence Termination Right or due to a breach of the agreement by the Purchaser) and (iii) the drop dead date of the Merger Agreement,

including any extension thereof by the Company or the Purchaser.

Treatment of Dividends on Conversion

Upon conversion of the Series A Preferred Stock, any accrued but unpaid dividends thereon would be paid to the holder of the converted shares in cash.

Liquidation Preference

Upon the occurrence of a Liquidation Event (as hereinafter defined), the holders of Series A Preferred Stock would be entitled to receive, in preference to the holders of the Common Stock and the holders of any other capital stock of the Company, an amount in cash equal to the Invested Amount plus all accrued but unpaid dividends thereon (the “Liquidation Preference”).

“Liquidation Event” would mean, (i) any liquidation, dissolution or winding up of the Company or (ii) a consolidation, merger, reorganization or other form of acquisition of the Company (including through a stock purchase) or a sale of all or substantially all of its assets, except in cases where the stockholders of the Company immediately prior to such transaction own more than 50% of the voting stock of the Company or, if applicable, the resulting or surviving corporation, immediately following such transaction; provided, however, that the consummation of the transactions contemplated by the Merger Agreement shall not be deemed to constitute a Liquidation Event.

Redemption at Option of Holder

At any time on or after the second anniversary of the initial issuance date of the Series A Preferred Stock, the holders of the Series A Preferred Stock would be entitled to require the Company to redeem the Series A Preferred Stock at an aggregate redemption price equal to the Liquidation Preference of the Series A Preferred Stock.

Redemption at Option of the Company

During the 6 month period following Purchaser’s exercise of the Limited Due Diligence Termination Right, the Company shall have the right to redeem the Series A Preferred Stock at an aggregate redemption price equal to the Liquidation Preference of the Series A Preferred Stock.

Voting Rights

Except as set forth below, holders of Series A Preferred Stock would not be entitled to vote on any matters presented to the holders of Common Stock.

Without the approval of the holders of a majority of the outstanding shares of Series A Preferred Stock, the Company would not, and would not permit any subsidiary to: 1.in the case of the Company, alter or amend the preferences, privileges or rights of the Series A Preferred Stock or create any class of shares senior to or pari passu with the Series A Preferred Stock in any respect; 2.liquidate or dissolve or file a voluntary petition for bankruptcy or adopt any plan for any of the foregoing; 3.amend the Company’s or any subsidiary’s Charter or Bylaws or equivalent organizational documents; 4.increase the amount of the Company’s regular quarterly cash dividend, pay any special dividend or distribution or otherwise repurchase or redeem any equity securities, other than as required by the terms of equity securities outstanding on the date of issuance of the Series A Preferred Stock or in the case of the Company, authorize or issue any shares of capital having a right to dividends (other than Common Stock) or redemption; 5.permit the Company or any of its subsidiaries to incur any indebtedness for borrowed money, other than the incurrence by the Company of senior unsecured debt ranking pari passu with the Company’s existing senior unsecured debt in the ordinary course of business consistent with past practice and the Company’s current business plan and Baltimore Gas & Electric Company (“BGE”) may issue new debt consistent with both its past practices and regulatory approvals; 6.take any action that require common shareholder approval if the dividend has not been paid for two consecutive quarters, excluding the election of directors and the ratification of the Company’s independent auditors; or 7.other mutually agreed covenants. Adjustments The number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock shall be appropriately adjusted to give effect to any stock split, recapitalization, stock dividend or similar event.

Information Rights:

At any time that the Company is not required to file periodic reports with the SEC, the Company would be required to provide the

	Purchaser the following information: 1.consolidated unaudited monthly financial statements prepared in accordance with US GAAP (including an income statement, balance sheet, and cash flow statement, with comparisons to budget and prior year) within 30 days of month-end, consolidated unaudited quarterly financial statements prepared in accordance with US GAAP (including an income statement, balance sheet, and cash flow statement, with comparisons to budget and prior year) within 30 days of quarter-end, and annual consolidated audited financial statements within 90 days of fiscal year-end (certified by a “Big 4” accounting firm); 2.customary notices of material events (e.g., litigation, etc.); and 3.such other information and access as the Investors may reasonably request.
Registration Rights:	At the expense of the Company, the Purchaser would have the following demand and piggyback registration rights as to the Series A Preferred Stock (and the securities issuable upon conversion thereof): up to two (2) demand rights, unlimited S-3 registrations; and unlimited piggyback rights; standard underwriting control arrangements and lockup. Contemporaneously with the issuance of the Common Stock upon conversion of the Series A Preferred Stock, the Company shall file and as promptly as practicable thereafter have declared effective, a resale registration statement on Form S-3 (or any successor form).
Board of Directors; Board Observer:	For so long as the Purchaser or its affiliates owns at least 33.3% of the shares of Series A Preferred Stock originally issued to it or 50% of the shares of Common Stock issued to Purchaser or its affiliates upon conversion of the Series A Preferred Stock, the Purchaser shall have the right to nominate to the Board of Directors one individual to the Board of Directors. The size of the board will be increased as necessary to provide for the foregoing board seat, and the individual designated by the Purchaser will be appointed to the Board of Directors to occupy such seat. So long as the Purchaser is entitled to nominate one member to the Board of Directors, such nominee would have the right to be a member of each committee of the Board of Directors established from time to time, subject to the terms of applicable law. The Board of Directors shall take all necessary actions to cause the Purchaser nominee to be appointed to the Board of Directors. If the Purchaser chooses not to exercise its right to nominate a member to the Board of Directors, the Purchaser shall have the right to designate one person as an observer, which person would have

	the right to attend and participate in all meetings of, and receive all material distributed to, the Board of Directors, subject to customary exceptions. Observer rights extend to committees.
Closing Conditions:	The purchase of the Series A Preferred Stock would be subject to customary conditions to closing, including negotiation, execution and delivery of definitive agreements setting forth the foregoing terms and containing customary representations, warranties, covenants and conditions, including the receipt of any required governmental consents and approvals, the waiver by each executive officer of the right to receive replacements options pursuant to such executive officer’s severance agreements upon the consummation of the Merger and the execution of the Merger Agreement by each of the parties thereto.
Transferability:	The Series A Preferred Stock (and Common Stock and 14% Senior Notes issued upon conversion thereof) shall be freely transferable, subject to compliance with applicable securities laws.
Terms of the 14% Senior Notes	Issuer The 14% Senior Notes shall be issued by the Company. Guarantors The 14% Senior Notes shall be guaranteed by the Company’s subsidiaries, other than BGE. Interest Rate The principal amount of the 14% Senior Notes shall accrue interest at an annual rate of 14%. During the continuance of an Event of Default, interest shall accrue at a rate 3% greater than otherwise applicable. Interest shall be payable monthly in cash. Maturity Date The 14% Senior Notes shall mature and be due and payable in full on the first anniversary of the original issuance date of the notes. Ranking The 14% Senior Notes shall rank pari passu with the senior most unsecured debt of the Company. Covenants The 14% Senior Notes will include negative covenants restricting the Company from incurring senior or pari passu debt and the Company’s subsidiaries from incurring any debt, or the Company or its subsidiaries from making restricted payments, engaging in

	fundamental changes (i.e., mergers, sales of assets, etc.) and other customary restrictions; provided, however, that the Company may refinance debt maturing within 6 months and the Company’s subsidiaries may refinance existing debt, in each case, in principal amounts and at rankings not to exceed the existing principal amount or rankings of the debt refinanced and Baltimore Gas & Electric Company may issue new debt consistent with both its past practices and regulatory approvals. The 14% Senior Notes will include customary affirmative covenants like information covenants. Events of Default Customary events of default including a cross default on debt of the Company and its subsidiaries. Change of Control Offer Upon a change of control (other than resulting from the Merger (as defined below)), the Company shall be required to offer to purchase the Notes at 101% of the outstanding aggregate principal amount thereof plus any unaccrued but unpaid interest thereon. Expenses and Indemnification Customary provisions providing for reimbursement of expenses and indemnification of the Holder. Governing Law and Jurisdiction New York law and New York courts
MERGER AGREEMENT
Structure:	A wholly owned subsidiary of Purchaser shall merge with and into the Company with the Company as the surviving corporation (the “Merger”).
Merger Consideration:	$26.50 per share of Common Stock. All outstanding preferred stock of the Company, other than the Series A Preferred Stock, shall be redeemed upon the closing of the Merger.
Representations and Warranties:	The Merger Agreement will contain representations and warranties reasonably acceptable to Purchaser.
Closing Conditions:	The Merger Agreement will contain customary closing conditions reasonably acceptable to Purchaser. The Merger will not be subject to a financing condition. Closing conditions will include (i) the senior unsecured debt of the Company must be rated investment grade with no less than a stable outlook by Moody’s, S&P and

	Fitch, (ii) that as of the closing date the Purchaser would not be entitled to exercise the Limited Due Diligence Termination Right (assuming such right was exercisable as of the closing date, the determination period runs from the June 30, 2008 to the closing date and that an adverse net economic change in excess of $400 million shall be deemed to be material for purposes of the closing condition) and (iii) the absence of a material adverse effect.
Regulatory Approvals:	The Company and the Purchaser will agree to cooperate to obtain all required regulatory approvals; provided, however, that in no event shall the Purchaser or Company agree to, without the prior written consent of the other party (which consent may be withheld in such party’s sole discretion), (i) capital expenditures, (ii) rate reductions or (iii) actions otherwise, individually or in aggregate, having an adverse effect on either the Purchaser or the Company, in each case in excess of an amount deemed acceptable to the Purchaser in its reasonable discretion.
Non-Solicitation; Special Meeting	From and after the date of the Merger Agreement, the Company shall be bound by a non-solicitation/no shop clause reasonably acceptable to Purchaser. Therefore, if the Company receives an unsolicited bona-fide acquisition proposal (to be defined in the Merger Agreement) prior to obtaining stockholder approval for the Merger, which constitutes a Superior Proposal (to be defined in the Merger Agreement), the Company may engage in discussions with and share information with the proposing party. The Company shall promptly notify the Purchaser of the material terms of any such proposal (including the identity of the party making the proposal) and keep the Purchaser informed on a current basis as to any significant changes or developments with respect to any proposal or other written or oral inquiries. The Company may not terminate the Merger Agreement in order to accept a Superior Proposal prior to the holding of the stockholder meeting to approve the Merger and the other transactions contemplated by the Merger Agreement. Following a stockholder vote rejecting the Merger and assuming stockholder approval of the Merger has not been obtained, the Company may terminate the Merger Agreement in order to accept a Superior Proposal, but only if (i) the Company nor its representatives have breached the non-solicitation covenants, (ii) the Company has provided the Purchaser with 5-business days advance notice in writing of its intent to do so and such Superior Proposal remains a Superior Proposal at the end of such 5-business day period and (iii) the Company has paid the Termination Fee to the Purchaser. The Company shall be required to call and hold a Special Stockholders Meeting as promptly as practicable following the execution of the Merger Agreement for the purposes of obtaining

	stockholder approval of the Merger and the other transactions contemplated by the Merger Agreement. The Company shall file the preliminary proxy statement relating to the Special Stockholders Meeting as promptly as practicable (but in any event within 30 days) following the execution of the Merger Agreement.
Covenants:	The Company will agree to operating covenants during the pendency of the Merger Agreement reasonably acceptable to Purchaser, including a restriction on the payment of dividends and a prohibition on the issuance of capital stock.
D&O Indemnification; Insurance:	The Purchaser will agree to continue the indemnification and exculpation provisions currently contained in the Company’s articles of incorporation or bylaws and shall agree to continue the current D&O policy for the benefit of the Company’s officers and directors for a period of 6 years following the closing of the Merger; provided, however, that the Purchaser shall not be required to pay premiums in excess of 150% of the current premiums paid by the Company.
Termination Fee:	In consideration for the purchase of the Series A Preferred Stock and the execution of the Merger Agreement, in the event the Merger Agreement is terminated for any reason, including without limitation, upon a withdrawal of the Board’s recommendation of the transactions contemplated by the Merger Agreement, the occurrence of the drop dead date, a termination to accept a Superior Proposal, a breach of the Merger Agreement by the Company or otherwise, other than upon exercise of the Limited Due Diligence Termination Right or due to a breach of the agreement by the Purchaser, the Company shall pay a termination fee of $175 million to the Purchaser contemporaneously with the termination of the Merger Agreement.
Limited Due Diligence Termination Right:	For a period of 14 days following the later of the execution of the Merger Agreement and the date the Company and the Purchaser agree that the Purchaser and its representatives have been given full access to the Company’s books and records relating to the retail and wholesale businesses, trading records and appropriate personnel, the Purchaser shall have the right to terminate the Merger Agreement if the Purchaser determines, in its sole discretion, that since June 30, 2008 either the retail and/or wholesale businesses or assets have materially deteriorated. The parties agree that an adverse change in the net economic value of such businesses or assets in excess of $200 million shall be deemed to be material for purposes of the Limited Due Diligence Termination Right.
Non-Survival:	The representations and warranties shall not survive the closing of the Merger.

Remedies:	The Purchaser shall be entitled to seek specific performance of the Company’s obligations under the agreement. The Company’s sole and exclusive recourse against the Purchaser and its affiliates shall be limited to a right to offset against any obligations under the Series A Preferred Stock or the securities issuable upon conversion thereof.
Drop Dead Date	9 months following the execution of the Merger Agreement, which date may be extended by the Purchaser or the Company for up to 3 months.
Governing Law for Merger	Maryland

EX-99.3

Exhibit 99.3

Dear Colleagues,

For the past 72 hours, our management team, in consultation with our Board of Directors and our outside advisors, has been engaged in a nearly around-the-clock search to identify the best approaches for guiding our company through the unprecedented and treacherous turmoil on Wall Street and in the financial credit markets. This morning, I can announce that we’re pursuing a path that I strongly believe holds great long-term promise for our employees, our customers and all of the many stakeholders we serve.

Our Board of Directors this morning approved the tentative sale of Constellation Energy to MidAmerican Energy Holdings Company, a subsidiary of Berkshire Hathaway, one of the most respected companies in America.  Under terms of the agreement, MidAmerican would acquire 100 percent of Constellation Energy’s shares for $26.50 per share.  The purchase price is far below what we could have expected in a stable market environment.  But the past two months have been anything but stable, and we had to move quickly and definitively to preserve shareholder value in this new and unpredictable market reality. We believe that operating under MidAmerican in the Berkshire Hathaway family of companies holds considerable long-term growth potential.

The name may be new to many of you but MidAmerican is an exceptional company, experienced and knowledgeable in global energy markets.  Let me provide a brief overview. Based in Des Moines, Iowa, MidAmerican operates seven energy subsidiaries across the United States and United Kingdom.  Like Constellation Energy, MidAmerican is an experienced utility operator, with its MidAmerican Energy Company subsidiary serving customers in Iowa, Illinois, Nebraska and South Dakota; Pacific Power serving customers in Oregon, Washington and California, and Rocky Mountain Power serving customers in Wyoming, Utah and Idaho.  Overall, the company owns a diverse generation asset base, including nuclear, wind, coal and natural gas, and serves 6.9 million gas and electric customers.  It has approximately 17,200 employees; annual operating revenues are approximately $12.4 billion.

Like all of the many companies in the Berkshire Hathaway family, MidAmerican has a unique and highly successful management philosophy and culture.  They invest in quality companies with quality assets and quality employee talent.  Their commitment to the companies they acquire is that they will put them in a position to grow and thrive over the long-term.  When I shared with Greg Abel, MidAmerican’s president and CEO, that our company has a 200-year history, he responded by saying, “And they’ll have another 200 years.”

The tentative agreement was reached last night and it’s our expectation that due diligence will be completed in the next two days. The goal is to sign the final agreement by close of business, Sept. 19.  The acquisition is contingent upon a number of regulatory approvals, including FERC, NRC and Maryland regulators.  We’ll be working toward a close in approximately nine months.  MidAmerican is familiar with the Maryland marketplace and shares our commitment to working with Maryland authorities to invest in

infrastructure in the state and ensure service reliability.  We believe our state leaders will be very impressed with MidAmerican’s history and track record and its commitment to renewable energy solutions.

I recognize and fully appreciate that events have unfolded very rapidly this week, and that the news I’m sharing today may be both surprising and unsettling for many of you.  At this stage, there are many unanswered questions and we will be working to bring clarity to these over the coming weeks. I can only emphasize that MidAmerican is investing in Constellation Energy for the long run.  It is a privately held company, and is not entering this arrangement with a promise to shareholders to reduce employees or slash costs.  It has established a track record of allowing successful enterprises to operate autonomously.  Like our company, it focuses on results and rewards those who achieve their business plans.  They want to keep our company in the MidAmerican family and they want it to excel.  It’s a good fit from a business perspective, and I believe it will be a good fit from a people perspective.

In the next few days, we’ll be focused on finalizing the terms of the transaction.  Our goal is to have more detailed discussions with all stakeholders, including investors and employees, next week. I very much look forward to introducing Greg and his leadership team to the Constellation Energy team.

I’ll close by saying that the events which led to this transaction were breathtaking.  When the financial markets began to show real distress this summer with the demise of financial giants such as Bear Stearns and Lehman Brothers, and more recently, Fannie Mae, Freddie Mac and AIG, the state of the credit markets challenged all participants. Venerable institutions have collapsed within days. Although we are an energy company, which participates in commodity markets, the contagion was inescapable. We were forced, almost overnight, to reorient our priorities and strategic objectives.  This decision meets our goal of preserving shareholder value and has the potential to secure a strong future for our company and our people.  Berkshire Hathaway and MidAmerican have great reputations … I believe we’re landing in a good place.

Thanks for your continued support, understanding and, as always, exceptional work and results.  I promise to keep you as informed as I possibly can.

Mayo