Exelon wins NRC backing for Constellation merger

Exelon (NYSE: EXC), which already has the nation’s largest nuclear energy fleet, is poised to grow even larger.

The U.S. Nuclear Regulatory Commission (NRC) on Feb. 16 approved the proposed merger between Exelon and Constellation Energy Group, (NYSE: CEG).

Constellation and Exelon requested NRC approval for the merger in May 2011. The New York Public Service Commission and the U.S. Department of Justice have approved the merger between Exelon and Baltimore-based Constellation. The deal has received conditional approval from the Maryland Public Service Commission. The deal must still be approved by the Federal Energy Regulatory Commission (FERC).

The merger would result in Exelon indirectly owning 50.01% of Constellation Energy Nuclear Group (CENG), which is jointly owned by CEG and EDF, Inc., a subsidiary of  Electricité de France SA.

 

The Constellation affiliate currently holds operating licenses for five nuclear power plants – Calvert Cliffs 1 and 2, Nine Mile Point 1 and 2, and R.E. Ginna – as well as independent spent fuel storage installations at Calvert Cliffs and Ginna. EDF will continue to own the remaining 49.99% of the facilities. Existing Exelon licenses will not be affected.

NRC rules essentially prohibit foreign companies from holding majority ownership in nuclear power plants.

The NRC’s approval includes the indirect transfer of operating licenses for five commercial nuclear power plants and two spent fuel storage installations. The indirect transfer of the licenses will not result in any physical changes to the facilities or any changes to the conduct of operations, NRC said.

Exelon Nuclear already represents about 20% of the U.S. nuclear industry power capacity, according to the company’s Web site. Exelon currently has 17 reactors located at 10 power plants in Illinois, Pennsylvania and New Jersey. The Constellation plants affected by the merger are located in Maryland and New York.

Exelon also has plans to divest some Constellation coal plants.

 

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.