1004440--2/26/2010--BALTIMORE_GAS_&_ELECTRIC

related topics

{cost, contract, operation}

{operation, natural, condition}

{cost, regulation, environmental}

{capital, credit, financial}

{loss, insurance, financial}

{competitive, industry, competition}

{acquisition, growth, future}

{system, service, information}

{gas, price, oil}

{financial, litigation, operation}

{customer, product, revenue}

{condition, economic, financial}

{cost, operation, labor}

Economic conditions and instability in the financial markets could negatively impact our business. Our generation investment plans may not achieve the desired financial results. Changes in the prices of commodities, initial margin requirements, collateral posting asymmetries and types of collateral impact our liquidity requirements. Our merchant energy business may incur substantial costs and liabilities and be exposed to price volatility and counterparty performance risk as a result of its participation in the wholesale energy markets. Reduced liquidity in the markets in which we operate could impair our ability to appropriately manage the risks of our operations. We often rely on single suppliers and at times on single customers, exposing us to significant financial risks if either should fail to perform their obligations. We may not fully hedge our generation assets, customer supply activities, or other market positions against changes in commodity prices, and our hedging procedures may not work as planned. The use of derivative and nonderivative contracts in the normal course of business could result in financial losses that negatively impact our financial results. Inaccurate assumptions and estimates in the models we use could adversely impact our financial results. Poor market performance will affect our pension plan investments, which may adversely affect our liquidity and financial results. The operation of power generation facilities involves significant risks that could adversely affect our financial results. Our generation business may incur substantial costs and liabilities due to our ownership interest in nuclear generating facilities. We are subject to numerous environmental laws and regulations that require capital expenditures, increase our cost of operations and may expose us to environmental liabilities. We, and BGE in particular, are subject to extensive local, state and federal regulation that could affect our operations and costs. We operate in deregulated segments of the electric and gas industries created by federal and state restructuring initiatives. If competitive restructuring of the electric or gas industries is reversed, discontinued, restricted, or delayed, our business prospects and financial results could be materially adversely affected. Our financial results may be harmed if transportation and transmission availability is limited or unreliable. BGE's electric and gas infrastructure is subject to operational failure and may require significant expenditures to maintain. Our merchant energy business has contractual obligations to certain customers to provide full requirements service, which makes it difficult to predict and plan for load requirements and may result in reduced revenues and increased operating costs to our business. Our financial results may fluctuate on a seasonal and quarterly basis or as a result of severe weather. A failure in our operational systems or infrastructure, or those of third parties, may adversely affect our financial results. Our ability to successfully identify, complete and integrate acquisitions is subject to significant risks, including the effect of increased competition. War and threats of terrorism and catastrophic events that could result from terrorism may impact our results of operations in unpredictable ways. A downgrade in our credit ratings could negatively affect our ability to access capital and/or operate our wholesale and retail competitive supply businesses. We are subject to employee workforce factors that could affect our businesses and financial results. The sale of non-nuclear generation plants pursuant to the put arrangement with EDF may have an adverse effect on our financial results. Our ability to develop new nuclear generation could have an effect on our business and financial results.

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1004440--2/26/2010--BALTIMORE_GAS_&_ELECTRIC_CO