O'Malley said Thursday that the state remains "focused on the goal we have held throughout these proceedings: a thorough review of this proposed transaction by professional regulators to ensure that the transaction is consistent with the public interest and adequately protects ratepayers."

The O'Malley administration had laid out an extensive settlement proposal that could cost Constellation hundreds of millions of dollars, including one-time credits for residential customers equal to a roughly 10 percent reduction in their yearly bill and a pledge to contribute about $20 million a year to a program that helps low-income residents pay utility bills.

The governor's spokesman said Thursday that the state "hasn't left the table."

Constellation spokesman Rob Gould said the company has been willing to engage in "fruitful dialogue."

"Financial demands that would harm Constellation Energy, BGE and our customers would not be productive," he said.

The company reiterated Thursday that its proposed new reactor at Calvert Cliffs in Southern Maryland won't be built unless the EDF deal goes through, describing the two issues as "inseparable."

The legal wrangling is the most recent dispute between state officials and the company, whose relationship has been rocky for several years amid rising electricity rates. The tensions appeared to ease last year when the sides struck a $2 billion settlement that was approved by the General Assembly and included rebates, rate credits and other concessions.

Under that settlement, lawmakers raised the threshold that triggers regulatory review of transactions to those that involve at least one-fifth of the voting control or board seats at Constellation.

EDF owns a 9 percent stake in Constellation stock and would hold one of 13 seats on the board if the deal goes through.

Constellation has argued that state law does not allow the PSC to review the company's transaction with EDF, while the PSC came to the opposite conclusion because EDF would acquire Constellation assets, not voting interests. Therefore the "safe harbor" from regulatory scrutiny does not apply, the commission concluded.

"We continue to believe there is strong legal merit to our position that Maryland Public Service Commission approval of Constellation Energy's pending nuclear joint venture with EDF Group is not required as a matter of law," Constellation said in a statement.

"We are committed to ensuring Maryland officials honor the agreement they signed with our company just last year, which clearly permits a transaction of this kind without PSC pre-approval," Constellation added.

Berger's decision does not prevent Constellation from appealing once the PSC rules on the EDF deal.

The state attorney general's office, which had asked the court to dismiss Constellation's lawsuit, said it was pleased with the judge's decision.

Berger's order recognized that the PSC decision to investigate the EDF deal "is not a final order under the traditional understanding of finality and therefore is not subject to immediate judicial review," said Raquel M. Guillory, a spokeswoman for Maryland's attorney general.

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