Exelon - PEPCO Merger

Chicago-based Exelon has filed an application with the Maryland Public Service Commission for approval to acquire Pepco Holdings, the D.C.-based utility serving about 537,000 customers in Washington’s Maryland suburbs.  Pepco has more than 2 million customers in an arc stretching from Washington and its Maryland suburbs, east to the Delaware shore and north to New Jersey.

The all-cash deal, announced in April and valued at about $6.8 billion, will cement Exelon’s hold on the Mid-Atlantic power market by adding Atlantic City Electric, Delmarva Power and Pepco to the three utilities Exelon owns: BGE, ComEd and Peco.

 

The process, which follows similar filings in the District, New Jersey and Delaware, is expected to take between 12 and 15 months for approval in all jurisdictions.

To help smooth the approval process, Exelon has committed $50 million in charitable contributions over the next decade to communities served by Pepco.

Exelon also said it will provide $40 million for a “Customer Investment Fund,” which the Maryland PSC may use for customer benefits such as bill credits, low-income assistance and energy efficiency.

Exelon, which owns 23 nuclear power plants, is acquiring a gas and electric transmission company that is one-fifth its size. Pepco, having sold its power plants several years ago, buys its electricity from others.

The agreement comes three years after Exelon bought Baltimore-based Constellation Energy Group, parent of Baltimore Gas and Electric, for $7.9 billion in a deal that extended Exelon’s reach into 38 states and two Canadian provinces.  (Wash Post, 8/19/2014)