Exelon Corp. and Pepco Holdings Inc. filed an application seeking approval of their proposed merger with the Maryland Public Service Commission. The companies announced their proposed merger on April 30.
The combination of the companies will 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 a single mid-Atlantic electric and gas utility.
The Maryland filing describes Exelon’s commitment to significantly improve reliability, maintain charitable contributions at higher than 2013 levels for at least 10 years following closing of the merger and provide immediate economic benefits to Pepco and Delmarva Power customers in Maryland.
Pepco serves about 537,000 customers in Montgomery and Prince George’s counties; and Delmarva Power serves about 231,000 customers on Maryland’s Eastern Shore. Submission of the filings initiates the regulatory approval process in Maryland.
Joseph M. Rigby, PHI chairman, president and CEO, said the two companies share a culture of customer service and will benefit from sharing best practices across all utilities.
These proposed merger commitments are anticipated to result in substantial economic benefits for Maryland customers and communities, as detailed in an economic modeling analysis included in the merger approval filings.
Combined with reliability improvement projects already announced by PHI and underway, the merger commitments are expected to produce about 6,300 to 7,000 jobs and result in $542 million to $623 million in economic benefits to the Maryland economy. These results are anticipated to be achieved within six years after the merger closes.
Exelon also proposes measures to effectively insulate the PHI utilities from potential financial risks of other Exelon businesses; these measures are described in detail in the filing.
The companies have already made transaction-related filings with the Federal Energy Regulatory Commission, the Virginia State Corporation Commission, the Delaware Public Service Commission, the Public Service Commission of the District of Columbia and the New Jersey Board of Public Utilities. 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 the approval of the stockholders of PHI, which is scheduled to take place on Sept. 23, 2014. The companies anticipate completing the merger in the second or third quarter of 2015.