Editors’ Note

In 2001, Mayo Shattuck was appointed President and Chief Executive Officer of Constellation Energy Group, Inc., and he was elected as Chairman in 2002. Before coming to Constellation Energy, Shattuck was the Chairman of Deutsche Bank Alex. Brown and previously served as Deutsche Bank’s Global Head of Investment Banking and Global Head of Private Banking. He serves on the boards of the Edison Electric Institute, the Institute of Nuclear Power Operations, and the Nuclear Energy Institute. In addition, Shattuck is a member of the board of trustees of Johns Hopkins Medicine, Chairman of the Board of Visitors of the University of Maryland, Baltimore County, and a board member of the Walters Art Museum. A graduate of Williams College, he received his MBA from the Stanford University Graduate School of Business, where he graduated as an Arjay Miller Scholar. He also received an honorary Doctor of Public Service degree from the University of Maryland, Baltimore County.

Company Brief

Based in Baltimore, Constellation Energy (www.constellation.com) is a leading supplier of electricity and natural gas, and is the largest wholesale power provider in North America. Its subsidiaries include Baltimore Gas and Electric, Constellation Energy Commodities Group, Constellation Energy Nuclear Group, Constellation Power Generation, Constellation Energy Projects & Services Group, Constellation NewEnergy, and Fellon-McCord & Associates. Constellation Energy employs more than 10,000 people, and its customers include more than two-thirds of the Fortune 100.

Are you happy with the growth that you’ve achieved for the brand? As you look a few years out, do you see trends for continued strong results?

We’re very happy with the progress that we have made. When I first got here, we went through a period when we were righting the ship, because we were in markets that were in deep disarray. There were reasonable threats and risks to the business that needed to be fixed. The interesting thing about those years is that we were able to use the disarray to transform the business significantly so that, today, we’re a national company. We’re diversified, we’re stable, and we’ve grown substantially from $4 billion in revenue to $21 billion, which provides the company with a lot more strategic flexibility. So the past six years have put us in a position where we have opportunities that are more diversified and national.

People, by nature, can be averse to change. Was it challenging to get your employees to understand the transition the company needed to go through?

Yes, it was challenging, for two reasons. One reason is that we had a few bad breaks in 2001, and we were near insolvency. There was a turnaround aspect to it that had several imperatives, which included fixing the balance sheet and staving off a potentially bad scenario. The other side of it was that we were a company that was coming out of a highly regulated environment into one that was highly competitive. So the transition that we needed to make, with employees becoming more commercial and competitive, was an enormous cultural transformation. But it was also a very exciting one, because people came to understand that they were being liberated to pursue business in a more normal course as we entered businesses that were naturally competitive and in different markets.

Do you feel an effective public-private dialogue has occurred around key issues and legislation affecting the energy industry?

Politicians, academics, and the private sector have all been involved in this debate, and I think progress has been made. But I think that we can do a lot more. When the landscape changes for us and others in the industry, the changes are often very dramatic and long-term in nature. We’re going to have to keep forging partnerships and cooperation around long-term solutions. As a company, we have to balance the important societal needs that we address with access to capital that will enable us to meet those needs. The best example for us is that we are one of the larger nuclear operators, and it’s our responsibility to do whatever we can to sponsor the development of new nuclear power plants in the United States. Since a plant has not been built in 30 years, the industry is suffering from huge deficiencies in the supply chain and talent management arenas. If we don’t do our part in restoring that value chain and restoring the ability to build a new nuclear plant, this nation will suffer dramatically 30 years from now, when it has no large sources of base-load power.

The public still seems to fear nuclear power plants, even though there are so many safety systems built around them. How challenging is it to get people to understand the need for nuclear power?

The public perception has actually changed. In all the polling, the favorable impressions of nuclear power and nuclear safety have really skyrocketed, particularly in places where there are nuclear plants. Having said that, this is still a difficult political issue that tends to revolve around two primary issues: One is nuclear proliferation, and the other is the storage of spent fuel. There are concerns about making sure that those issues are addressed. But we have a lot of advocates out there, and I think from a political standpoint, people are getting closer to understanding the imperative for nuclear power to be a part of our future. A lot of progress has been made in the past couple of years, and the Energy Policy Act of 2005, climate change, and energy independence are fueling a lot of interest in nuclear power now. People don’t want to be dependent on oil and gas imports. They don’t want to be dependent on unstable political regimes. They don’t want to be dependent on fuels that have a big carbon footprint. So nuclear is the obvious answer.

Is there a good understanding of the true quality of life and opportunities for business in Baltimore?

We’ve made progress, but haven’t gotten to where we need to be. However, I think that awareness is very high, and that the drive and persistence required to solve those problems is very much alive in the hearts and minds of our politicians and public leaders.