Washington, D.C. Mayor Muriel Bowser and representatives from Exelon (NYSE:EXC) and Pepco Holdings (NYSE:POM) announced late Oct. 6 that a negotiated settlement has been reached for the merger proposed by the two companies.
The agreement calls for the merged company to develop up to 10 MW of solar energy and four microgrids within the District of Columbia, Exelon Vice President of Corporate Affairs Melissa Sherrod said in a telephone news conference.
In addition, the merged company will also support the district’s sustainability goals in various ways, including the purchase of 100 MW of wind energy by Exelon, Sherrod said.
Exelon also agreed to work with Pepco to reduce both the frequency and duration of power outages within Washington, D.C. Pepco will face substantial financial penalties if fails to improve reliability, Sherrod said.
Various other parties signed onto the order. It includes more than 120 commitments, including many to assist low-income residents, said Pepco Region President Donna Cooper.
“The new agreement increases Exelon’s originally proposed investment in the District from $14 million to $78 million,” Mayor Bowser said in a news release. “The settlement will be put forth to the Public Service Commission for public review and comment,” according to a notice that Bowser’s office sent to the news media.
The Washington, D.C. PSC voted against the Exelon-Pepco merger application on Aug. 25. The commission said then that the companies had not persuaded the commission that the proposed merger, as submitted, was in the public interest.
Following the PSC vote, some industry analysts did predict that Exelon would probably enhance its purchase offer for Pepco in order to win over the commission. Virginia, Maryland and other entities had already approved the Exelon-Pepco merger.
Exelon first announced in late April 2014 that it had signed a definitive agreement to combine both companies in an all-cash transaction consideration of $27.25 per share.
The settlement agreement was filed with the PSC on Oct. 6. Exelon Senior Vice President and Deputy General Counsel Paul Bonney hopes that the PSC can issue final approval within three months.