Exelon, Pepco Holdings Will Merge

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Exelon Corporation and Pepco Holdings, Inc. have filed an application with the Federal Energy Regulatory Commission to combine their businesses.

The proposed transaction would bring together Exelon’s three electric and gas utilities – BGE, ComEd and PECO – and Pepco Holdings’ (PHI’s) three electric and gas utilities – Atlantic City Electric, Delmarva Power and Pepco – to create one large Mid-Atlantic electric and gas utility.

In a company news release, Exelon states the transaction does not raise any adverse competition issues, because PHI owns a minimal amount of electricity generation.  Exelon also said the transaction is in the public interest because it will have no adverse impact on rates and no impact on regulation by FERC or any state utility commission.

Because of the lack of competitive generation overlap, the companies have requested that FERC review the transaction and issue an order within 90 days.

Forbes.com reports the total value of the all-cash deal is $6.8 billion, and that regulators are likely to closely scrutinize the merger.

The companies also will make transaction-related filings with the District of Columbia Public Service Commission, the Delaware Public Service Commission, the Maryland Public Service Commission, the New Jersey Board of Public Utilities and the Virginia State Corporation Commission.  The transaction is also subject to the notification and reporting requirements under the Hart-Scott-Rodino Act and other customary closing conditions.  The transaction requires PHI stockholder approval, and the companies anticipate closing in the second or third quarter of 2014.

Exelon and Constellation state they employ 6,253 people at Philadelphia-based PECO and Exelon Utilities, at Kennett Square-based Exelon Generation and at 21 power plants in the state.

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Top image credit: kendoman26 via photopin cc

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