French state-controlled power behemoth Electricite de France SA (EDF.FR) is considering dropping all plans for new nuclear capacities in Maryland, following a proposed settlement between the Maryland governor and EDF's U.S. partner, Constellation Energy (CEG), a person familiar with the matter said Thursday.

"EDF is being side-lined here, nuclear is not even mentioned and the group seriously mulls dropping any new projects to develop nuclear in the U.S.," said a person familiar with EDF's thinking.

Under an agreement announced Thursday by Maryland Governor Martin O'Malley, Exelon Corp. (EXC) and Constellation said they would spend more than $1 billion in Maryland on projects in the state to win approval for their $8 billion merger. O'Malley had previously opposed the Exelon-Constellation merger. The deal also has faced opposition from consumer groups and others.

The proposed settlement still requires approval by the Maryland Public Service Commission and other officials.

The comments on EDF's thinking follow previous requests from the French company to Maryland regulators to block the Exelon and Constellation merger. EDF has struggled with its nuclear efforts in Maryland despite earlier support from many Maryland officials, who saw the nuclear project as vital to economic development and jobs.

EDF scaled back its nuclear ambitions in the U.S. after shale gas emerged as a major competitor.

EDF bought half of Constellation's nuclear power business in 2008 for about $4.5 billion. In October 2010, EDF and Constellation ended a separate joint venture, called UniStar, to develop new U.S. nuclear power plants, after Constellation dropped out of an application for a federal loan guarantee for Calvert Cliffs 3, the partnership's first project. EDF retained the right to build that project and two additional U.S. projects in exchange for $250 million in cash and stock.

But EDF has not announced a new partner for the venture, raising doubts about its prospects.

- By Geraldine Amiel, Dow Jones Newswires, +33 1 40171767

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