FPL Group and Constellation Energy to Merge, Creating Nation's Largest Competitive Energy Supplier and Its Second-largest Electric Utility

FPL Group, Inc. (NYSE: FPL) and Constellation Energy (NYSE: CEG),two of the strongest, fastest-growing and most successful energycompanies in America, today announced that they have signed adefinitive agreement to create the nation's largest competitive energysupplier and its second-largest electric utility portfolio.

The transaction will create a company with a market capitalizationof approximately $28 billion (based on current market values),combined annual revenues of $27 billion, and $57 billion in totalassets. The combined company will be named Constellation Energy.

Under the definitive merger agreement, which was unanimouslyapproved by both companies' boards of directors, each common share ofConstellation Energy outstanding immediately prior to the merger willbe converted into 1.444 common shares of Constellation Energy at thetime of the merger, and each common share of FPL Group outstandingimmediately prior to the merger will be converted into one share ofConstellation Energy at the time of the merger. This represents apremium to Constellation Energy shareholders of approximately 15percent based on the exchange ratio calculated using the average ofthe 20-day closing prices for both companies ending December 13, 2005.Upon consummation of the merger, FPL Group shareholders will ownapproximately 60 percent, and Constellation Energy's shareholders willown approximately 40 percent of the combined company. Based on bothcompanies' previously communicated earnings expectations, thetransaction is expected to be accretive to both companies in the firstfull year of combined operations, excluding transaction andintegration costs and the positive effects of purchase accounting.

The combined company will maintain dual headquarters in JunoBeach, Fla., and Baltimore. It will have approximately 21,750employees and will serve more than 5.5 million electric customers inFlorida and Maryland and 625,000 gas customers in Maryland. Itscompetitive wholesale and retail businesses will serve thousands ofcommercial, industrial and utility customers, including 72 of theFORTUNE 100 companies. Its generation portfolio will be the nation'slargest, exceeding 45,000 megawatts of capacity. It will be thethird-largest nuclear plant operator in the United States, owning andoperating seven nuclear power stations with eleven units, includingFPL Group's pending acquisition of the Duane Arnold nuclear station.

Lewis Hay, III, currently chairman, president and chief executiveofficer of FPL Group, will become chief executive officer ofConstellation Energy. Mayo A. Shattuck III, currently chairman,president and chief executive officer of Constellation Energy, willbecome chairman of the board of Constellation Energy upon completionof the merger and will also head the combined company's competitiveenergy business. The Constellation Energy board will be composed of 15members, nine of whom will be named by FPL Group, and six of whom willbe named by Constellation Energy. Thirteen of the company's boardmembers will be non-executive directors.

"This historic transaction will create growth potential for thecombined enterprise that exceeds what our two companies could haveachieved separately," said Hay. "It brings together two strong,successful industry leaders with extensive and complementary assetsand skill sets, combining the best of the regulated utility andcompetitive energy sectors. This combination will create the premiercompetitive energy company with the critical mass and requisite skillsacross the competitive energy value chain. We also will have thesecond-largest and one of the fastest-growing electric utilitybusinesses in the nation. All of this will be supported by thestrongest balance sheet among our industry peers."

"The strategic combination of these two great companies will bringout the best in each, in ways that will drive major gains in growth,productivity and efficiency and build upon both companies' proventrack record of creating shareholder value," said Shattuck. "We willbuild scale in our generation fleet by more than doubling ourcompetitive generation assets and will leverage that increased scalewith our customer-facing businesses and world-class risk management.Most importantly, we are creating an enterprise extraordinarily wellpositioned to create shareholder value by seizing growth opportunitieswith our unique combination of people, assets, strategic vision andfinancial strength."

Two Proven Winners Become Stronger as a Team

Both FPL Group and Constellation Energy have delivered shareholdervalue outpacing both the Dow Jones Electric Index and the S&P 500since year-end 2001. FPL Group has provided total shareholder returnsof about 77 percent since year-end 2001, and Constellation Energy hasprovided total returns of more than 160 percent over the same period.

The management teams of each company have distinguished themselvesas visionary industry leaders, simultaneously driving both innovationand cost-saving efficiencies. For example, FPL Group is the leader inwind power, and it operates one of the most cost-efficient electricutilities in the nation that also ranks high in service reliability.Constellation Energy's risk management, commodity and retail expertiseas well as its generation platform have helped to propel and redefinethe competitive power sector, and its regulated utility, Baltimore Gasand Electric Company (BGE), is also in the top decile in costefficiency.

Extending the lead in competitive energy markets

With this transaction, the two companies are building an entitythat will be uniquely positioned for success in competitive energymarkets. Constellation Energy is the established leader in wholesaleand retail competitive power supply, serving a combined customer peakload of more than 35,000 megawatts. FPL Energy brings anindustry-leading and rapidly growing renewable energy platform and adiversified, high-performing portfolio of nearly 12,500 megawatts ofcapacity that more than doubles Constellation Energy's equallydiversified and high-performing generation fleet, which totals nearly12,000 megawatts.

The combination creates a more balanced footprint in majorcompetitive regions - particularly in New England and Texas, where FPLEnergy's competitive generation assets will be leveraged byConstellation Energy's current position as the leading supplier ofenergy in competitive regions across North America. This presents animportant competitive advantage. It is expected that by more closelymatching its power sales with the output of its own larger power plantfleet, essentially creating a "virtual utility," the combined companycan lower operating costs and be even more successful in growingearnings.

Further planned additions to the combined company's 3,200-megawattwind energy portfolio, coupled with the ability to market associatedrenewable energy credits and green tags effectively through thecompetitive retail business, will also drive revenue growth.

The nation's premier regulated utility business

While most of the value created by the transaction is expected tocome from the combination of the companies' competitive energybusinesses, customers and shareholders are expected to benefit fromthe alliance of two top utilities.

Pairing Florida Power & Light and BGE will create a stronger andmore diversified regulated utility business. This business willcontribute approximately half of the combined company's earnings,providing a strong, balanced base on which to build.

Florida Power & Light serves one of the fastest-growing areas inthe nation. It is one of the most cost-efficient utilities in thecountry, also ranking high in service reliability. BGE, the nation'soldest utility, also has a strong reputation and customer servicetrack record. The two utilities will continue to operateindependently, and each will retain its respective company name.

By capitalizing on the scale of the two operations and leveragingbest practices of both companies, Florida Power & Light and BGE willhave added opportunity to better serve customers and assist each otherin the event of natural disasters. In addition, Florida Power & Lightcan tap into Constellation Energy's coal technology and experience asit evaluates alternatives to meet the rapidly rising demand in Floridaand the need to further diversity its fuel mix.

A more diverse and balanced fuel mix

The combination of the two generation fleets will result in a morebalanced fuel mix and a broader geographic territory, thus improvingload-serving capabilities. FPL Group's fuel mix, which is primarilyoil and natural gas (73 percent), nuclear (13 percent) and wind (10percent), complements Constellation Energy's fuel mix, which isprimarily oil and natural gas (41 percent), nuclear (32 percent) andcoal (23 percent). Combining their respective fleets is expected toreduce fuel risk exposure and increase purchasing power. FPL Groupcurrently is one of the largest consumers of natural gas in the UnitedStates, a position that can be leveraged by the combined company as itbuilds upon Constellation Energy's efforts to expand in the naturalgas sector.

Enhanced nuclear expertise

Each company has established itself as a leading nuclear operatorand combining the fleets offers significant potential for increasedsavings and efficiencies. FPL Group operates five nuclear power unitsin Florida and New Hampshire and expects to soon complete theacquisition of a majority ownership of the Duane Arnold nuclear powerunit in Iowa. Constellation Energy operates five nuclear power unitsin Maryland and New York. Both companies have a stated growth andconsolidation strategy in the nuclear arena. Reflecting that strategy,five of the seven nuclear units sold in the United States since 2001were acquired by FPL Group or Constellation Energy. The combinednuclear fleet brings an increased depth of resources and talent andprovides a larger foundation to pursue continued nuclear consolidationand potentially develop a new nuclear program, as market conditionswarrant.

The combination also provides added opportunity to realize costsynergies through a fleet management approach.

Environmental and community benefits

Both companies are leading utilities with a track record of highreliability, award-winning customer service and environmentalstewardship. FPL Group was the highest-ranked U.S. utility in a WorldWildlife Fund report that analyzed 72 of the world's leading powercompanies on current use of available technologies to reduce carbondioxide emissions. By adding cleaner and more efficient generatingsources over the past several years, FPL Group's emissions rates ofsulfur dioxide, nitrogen oxide and carbon dioxide have continued todecline - solidifying its position as one of the cleanest electricgenerating companies in the nation.

Constellation Energy has also won numerous environmental awardsand since 1999 has invested approximately $250 million in Maryland onemissions-reducing equipment and upgrades. Constellation Energyindicated earlier this year that it expects to spend $500 million to$600 million on additional air pollution emission controls in Marylandthrough the end of the decade, which will result in significantreductions in emissions of sulfur dioxide, nitrogen oxides andmercury.

Each company has committed to maintain co-headquarters in JunoBeach, where the company's fossil and renewable generation operationswill be based, and in Baltimore, where the company's competitiveenergy businesses will be located. The two utilities will continue tobe headquartered in their respective cities. Shattuck and Hay havecommitted to continue the strong corporate citizenship activities andphilanthropic contributions in the communities their companies serveat levels equal to or greater than they have in the past.

Significant Synergies

The merger offers both strategic and financial advantages inserving the energy marketplace. The combination is expected togenerate at least $200 million to $250 million pre-tax of annualsynergies available to shareholders before integration-related costsby the end of the third post-merger year. The majority of thesesynergies are expected to come from the company's deregulatedoperations. These synergies are expected to result from consolidationof non-regulated business unit operations, sharing of best practices,improved procurement strategies, and consolidation of systems andsupport activities.

Continued financial strength and discipline

Both management teams understand the importance of a strongbalance sheet as a competitive priority in a rapidly changingindustry. Both teams have strong track records of supporting theirbusiness strategies with adequate capitalization and being disciplinedin their financing of new activities. Based on their own analyses,both companies believe that Constellation Energy and its subsidiarieswill have strong investment grade ratings following the closing ofthis transaction. Both teams are committed to maintaining a strongcredit rating.

Dividend

It is anticipated that the new company's dividend will be the sameas that of FPL Group immediately prior to completion of the merger.

Approvals and Timing

The merger is conditioned upon approval by the shareholders ofboth companies, expiration or early termination of the applicableHart-Scott-Rodino waiting period, and the approval of various stateand federal regulatory authorities, including the Maryland PublicService Commission, the Federal Energy Regulatory Commission (FERC),and the Nuclear Regulatory Commission (NRC). The merger agreementcontains other customary closing conditions. The companies aretargeting the receipt of all necessary regulatory approvals in 9 to 12months and they currently intend to seek shareholder approval in thesecond quarter of 2006.

Advisors

Merrill Lynch is serving as financial advisor to FPL Group, andMorgan Stanley is serving as financial advisor to ConstellationEnergy. Cravath, Swaine & Moore LLP is serving as transaction counselto FPL Group, and Kirkland & Ellis LLP is serving as transaction andregulatory counsel to Constellation Energy. Skadden, Arps, Slate,Meagher & Flom LLP is serving as regulatory counsel to FPL Group.Lehman Brothers has provided a fairness opinion to FPL Group's boardof directors and Goldman Sachs has provided a fairness opinion toConstellation Energy's board of directors.

Investment Community Meeting and Webcast

Constellation Energy and FPL Group will hold an investmentcommunity meeting at the Waldorf-Astoria Hotel, 301 Park Avenue, NewYork, NY, in the Starlight Roof Ballroom, 18th Floor, today, December19, beginning at 9:00 AM EST. For those unable to participate inperson, the meeting will also be webcast; it can be accessed throughthe FPL Group-Constellation Energy merger website atwww.newenergyleader.com. A limited number of phone lines have alsobeen reserved for members of the investment community; the dial-innumber for the call will be (888) 802-8577 (domestic) or (973)935-2981 (international). Participants should reference passcode6849782.

A telephonic replay of the meeting will be available untilJanuary, 13, 2006. The replay numbers are (877) 519-4471 (domestic)and (973) 341-3080 (international). The passcode is 6849782.

Telephonic Media Press Conference

In addition, a telephonic media press conference will be heldtoday at 11:00 AM EST; members of the media are invited to participateby dialing 800-322-0079 (domestic) or 973-935-2100 (international) andreference passcode 6849831.

Note to Broadcast Media

Video footage of the two CEOs discussing the transaction, as wellas B-Roll on the two companies will be available today at thefollowing times and satellite coordinates. The details for thedownlink are as follows:
FEED DATE: MONDAY, DECEMBER 19, 2005
FEED TIME: 7:30-7:45 AM ET (DEDICATED)
COORDINATES: C BAND: AMC 3(C)/TRANSPONDER 3/AUDIO 6.2 & 6.8
DL: 3760 (H)

RE-FEED DATE: MONDAY, DECEMBER 19, 2005
RE-FEED TIME: 10:00- 10:30 AM ET (FED IN ROTATION)
COORDINATES: C BAND: IA (formerly Telstar) 5(C)/TRANSPONDER
19/AUDIO 6.2 & 6.8
DL: 4080 (V)

RE-FEED DATE: MONDAY, DECEMBER 19, 2005
RE-FEED TIME: 1:30-2:00 PM ET (FED IN ROTATION)
COORDINATES: C BAND: IA (formerly Telstar) 5 (C)/TRANSPONDER
19/AUDIO 6.2 & 6.8
DL: 4080 (V)

Corporate Profiles

Constellation Energy (http://www.constellation.com), a FORTUNE 200company based in Baltimore, is the nation's largest competitivesupplier of electricity to large commercial and industrial customersand the nation's largest wholesale power seller. Constellation Energyalso manages fuels and energy services on behalf of energy-intensiveindustries and utilities. It owns a diversified fleet of more than 100generating units located throughout the United States, totalingapproximately 12,000 megawatts of generating capacity. The companydelivers electricity and natural gas through the Baltimore Gas andElectric Company (BGE), its regulated utility in Central Maryland. Forthe trailing 12-months as of Sept. 30, 2005, the combined revenues ofthe integrated energy company totaled $15.2 billion.

FPL Group, with revenues for the trailing 12-months as of Sept.30, 2005 of more than $11 billion, is nationally known as a highquality, efficient, and customer-driven organization focused onenergy-related products and services. With a growing presence in 26states, it is widely recognized as one of the country's premier powercompanies. Its principal subsidiary, Florida Power & Light Company,serves 4.3 million customer accounts in Florida. FPL Energy, LLC, anFPL Group wholesale electricity generating subsidiary, is a leader inproducing electricity from clean and renewable fuels. Additionalinformation is available on the Internet at www.FPLGroup.com,www.FPL.com and www.FPLEnergy.com.

Additional Information

This communication is not a solicitation of a proxy from anysecurity holder of FPL Group Inc. or Constellation Energy.Constellation Energy intends to file with the Securities and ExchangeCommission a registration statement that will include the joint proxystatement/prospectus of Constellation Energy and FPL Group and otherrelevant documents to be mailed to security holders in connection withthe proposed transaction. WE URGE INVESTORS TO READ THE JOINT PROXYSTATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOMEAVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT FPLGROUP, INC. CONSTELLATION ENERGY AND THE PROPOSED TRANSACTION. Adefinitive proxy statement will be sent to security holders of FPLGroup and Constellation Energy seeking approval of the proposedtransaction. Investors and security holders will be able to obtainthese materials (when they are available) and other documents filedwith the SEC free of charge at the SEC's website, www.sec.gov. Inaddition, a copy of the joint proxy statement/prospectus (when itbecomes available) may be obtained free of charge from FPL Group (700Universe Blvd., Juno Beach, FL 33158, Attention Investor Relations),or from Constellation Energy, Shareholder Services, 750 East PrattSt., Baltimore, Md. 21202.

This communication shall not constitute an offer to sell or thesolicitation of an offer to buy any securities, nor shall there by anysale of securities in any jurisdiction in which such offer,solicitation or sale would be unlawful prior to registration orqualification under the securities laws of any such jurisdiction. Nooffering of securities shall be made except by means of a prospectusmeeting the requirements of Section 10 of the Securities Act of 1933,as amended.

FPL Group, Constellation Energy and their respective directors andexecutive officers of FPL Group and Constellation Energy and otherpersons may be deemed to be participants in the solicitation ofproxies in respect of the proposed transaction. Information regardingFPL Group's directors and executive officers is available in its proxystatement filed with the SEC by FPL Group on April 5, 2005, andinformation regarding Constellation Energy's directors and executiveofficers is available in its proxy statement filed with the SEC byConstellation Energy on April 13, 2005. Information regarding J. BrianFerguson, a director of FPL Group elected since the date of the filingof the 2005 definitive proxy statement, can be found in the Company'sfiling on Form 10-Q dated August 4, 2005. Other information regardingthe participants in the proxy solicitation and a description of theirdirect and indirect interests, by security holdings or otherwise, willbe contained in the joint proxy statement/prospectus and otherrelevant materials to be filed with the SEC when they becomeavailable.

This document includes "forward-looking statements" within themeaning of the Private Securities Litigation Reform Act of 1995. Theseforward-looking statements include, for example, statements regardingbenefits of the proposed merger, the likelihood and timing of closingof the proposed merger, integration plans and expected synergies,anticipated future financial and operating performance and results,including estimates for growth. Any statements that express, orinvolve discussions as to, expectations, beliefs, plans, objectives,assumptions or future events or performance (often, but not always,through the use of words or phrases such as "will likely result", "areexpected to", "will continue", "is anticipated", "believe", "could","estimated", "may", "plan", "potential", "projection", "target","outlook") are not statement of historical facts and may beforward-looking. There are a number of risks and uncertainties thatcould cause actual results to differ materially from theforward-looking statements made herein. These risks and uncertaintiesinclude, for example, the ability to obtain governmental approvals ofthe transaction on the proposed terms and schedule; the failure of FPLGroup or Constellation Energy stockholders to approve the transaction;the risk that the businesses will not be integrated successfully orthat anticipated synergies will not be achieved or will take longer toachieve than expected; disruption from the transaction making it moredifficult to maintain relationships with customers, employees,suppliers or governmental entities; unexpected transaction costs orliabilities; economic conditions; and other specific factors discussedin documents filed with the Securities and Exchange Commission by bothFPL Group and Constellation Energy. These risks, as well as otherrisks associated with the merger, will be more fully discussed in thejoint proxy statement/prospectus that will be included in theRegistration Statement on Form S-4 that Constellation Energy will filewith the SEC in connection with the proposed merger. Additionalfactors that may affect the future results of FPL Group orConstellation Energy are set forth in their respective filings withthe SEC. Investors and security holders may obtain free copies ofthese documents at the SEC's web site at www.sec.gov. In addition,investors and security holders may obtain free copies of the documentsfiled with the SEC by FPL Group at www.fplgroup.com/investor.Investors and security holders may obtain free copies of the documentsfiled by Constellation Energy at www.constellation.com/investors.Readers are cautioned not to place undue reliance on theseforward-looking statements, which speak only as of the date of thisdocument. Neither FPL Group nor Constellation Energy undertakes anyobligation to update its forward-looking statements to reflect eventsor circumstances after the date of this document.