Illinois AG Asks Feds to Probe Exelon-Constellation Power Merger

Nov. 2 (Bloomberg) — Illinois Attorney General Lisa Madigan asked the U.S. Federal Energy Regulatory Commission to examine how Exelon Corp.’s $7.98 billion takeover of Constellation Energy Group Inc. might affect the state’s power markets.

Madigan asked the agency to reject an agreement between Exelon and the PJM Interconnection LLC, the largest U.S. power market overseeing electricity flow across a region that covers all or parts of 13 states and the District of Columbia.

In a filing late yesterday, Madigan called on the federal energy commission, which regulates transmission and the wholesale electricity market, to order hearings into the merger’s impact on Northern Illinois, Chicago-based Exelon’s home territory.

The deal also has drawn fire in Maryland, where attorneys for the state have been grilling executives of Exelon and Baltimore-based Constellation in hearings before public regulators this week.

While the company is still reviewing Madigan’s filing, “we firmly believe that we have satisfied the commission’s market- concentration tests and fully mitigated any market-power concerns,” Exelon spokesman Paul Elsberg said in a telephone interview yesterday.

Madigan is among the first to question whether the merger might impair competition in Illinois, where Constellation sells electricity to consumers on the retail market but doesn’t own power plants.

‘Not Surprising’

“Given the adversarial role that the attorney general has traditionally played in Illinois with respect to utilities, it’s not surprising to see her office take a position” on the merger, said Paul Patterson, a New York City-based analyst with Glenrock Associates, in a telephone interview yesterday.

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