The Delaware Public Service Commission (PSC) on June 2 approved the merger of Exelon Corp. (NYSE: EXC) and Pepco Holdings (NYSE: POM) upon the terms set forth in the parties’ application, as amended by a settlement agreement filed with the PSC on April 7.
This action follows the Commission’s deliberations on May 19, when the commission voted to approve the settlement agreement. The June 2 order approves the merger and authorizes its consummation. A further order with the PSC’s specific grounds for approval will follow at a later date. The companies announced their proposed merger in April 2014.
The “Amended Settlement Agreement” was filed by Exelon, Pepco Holdings and Delmarva Power on April 7 and signed by PSC Staff, the Delaware Public Advocate, the Department of Natural Resources and Environmental Control (DNREC), the Delaware Sustainable Energy Utility, the Mid-Atlantic Renewable Energy Coalition and the Clean Air Council. The terms provide more than $42 million in direct benefits, deliver significant economic benefits to Delaware and Delmarva Power customers, promote energy efficiency, increase reliability, support workforce development and promote the public interest.
The merger will bring together Exelon’s three electric and gas utilities – Baltimore Gas & Electric, Commonwealth Edison and PECO Energy – and Pepco Holdings’ (PHI) three electric and gas utilities – Atlantic City Electric, Delmarva Power and Pepco – to create the leading mid-Atlantic electric and gas utility.
The merger still requires approval by the Public Service Commission of the District of Columbia, Exelon and Pepco Holdings noted in a June 2 statement.
The transaction was approved by the Maryland Public Service Commission in May, the New Jersey Board of Public Utilities in February, the Federal Energy Regulatory Commission in November 2014, the Virginia State Corporation Commission in October 2014 and the PHI stockholders in September 2014. In addition, with the expiration of the U.S. Department of Justice’s review period in December 2014, the Hart-Scott-Rodino Act no longer precludes completion of the merger. The companies expect to complete the merger in the second or third quarter of 2015.
Exelon is the nation’s leading competitive energy provider, with 2014 revenues of approximately $27.4 billion. Headquartered in Chicago, Exelon does business in 48 states, the District of Columbia and Canada. Exelon is one of the largest competitive U.S. power generators, with approximately 32,000 megawatts of owned capacity comprising one of the nation’s cleanest and lowest-cost power generation fleets.
Pepco Holdings is one of the largest energy delivery companies in the Mid-Atlantic region, serving about 2 million customers in Delaware, the District of Columbia, Maryland and New Jersey. PHI subsidiaries Pepco, Delmarva Power and Atlantic City Electric provide regulated electricity service; Delmarva Power also provides natural gas service. PHI also provides energy efficiency and renewable energy services through Pepco Energy Services.