Gain on U.S. Department of Energy Settlement

6 Months Ended

Jun. 30, 2011

Gain on U.S. Department of Energy Settlement

Gain on U.S. Department of Energy Settlement

Gain on U.S. Department of Energy Settlement

On June 30, 2011, CENG executed a settlement agreement with the United States Department of Energy (DOE) under which Constellation Energy will receive payment of $35.5 million related to costs incurred through October 31, 2008 to store spent nuclear fuel at the Calvert Cliffs nuclear power plant. The settlement also details a framework and procedure for recovery of damages incurred or to be incurred through the end of 2013. The agreement settles a lawsuit that sought to recover damages caused by the DOE's failure to comply with legal and contractual obligations to dispose of spent nuclear fuel at the Calvert Cliffs nuclear power plant. We discuss our lawsuit involving CENG's nuclear plants in more detail in our 2010 Annual Report on Form 10-K.

        As part of the 2009 agreement between Constellation Energy and EDF in which Constellation Energy sold a 49.99% interest in CENG to EDF, Constellation Energy retained the right to receive payments from any settlement with the DOE that related to periods prior to the formation of the joint venture on November 6, 2009. As such, Constellation Energy recognized a pre-tax gain in the second quarter of 2011 for $35.5 million and we expect to receive the funds in the third quarter of 2011.

        The lawsuits relating to the storage of spent nuclear fuel at the Ginna and Nine Mile Point nuclear power plants remain outstanding.