Exelon-Pepco merger worth $6.8B takes one big step forward

A settlement with the New Jersey Board of Public Utilities Wednesday brought Exelon Corp.'s (EXC) proposed merger with Pepco Holdings Inc. (POM) one step closer to fruition.

In April, Exelon agreed to buy Pepco for $6.8 billion in an all-cash transaction. The merger would create the largest electric and gas utility in the Mid-Atlantic region, bringing together Exelon's PECO, BGE and ComEd and Pepco's Atlantic City Electric (ANTEH), Delmarva Power and Pepco.

The New Jersey settlement's provisions include:

• A $62 million "customer investment fund" for rate credits to Atlantic City Electric customers.
• A program to give $15 million in energy-efficiency savings to Atlantic City Electric customers.
• Commitments to improve Atlantic City Electric's reliability performance to levels exceeding current New Jersey Board of Public Utilities requirements.
• Commitments to hire 60 union employees and to protect compensation and benefits.
• Maintaining Atlantic City Electric's local operational headquarters in Mays Landing, N.J.

Other commitments relate to maintaining low-income assistance, charitable contributions and community initiatives and more. Read the settlement here.

The settlement was approved by Exelon, Pepco, Atlantic City Electric, New Jersey Board of Public Utilities, and the Independent Energy Producers of New Jersey.

The deal is still subject to approval from New Jersey Board of Public Utilities commissioners, Delaware Public Service Commission, Public Service Commission of the District of Columbia and Maryland Public Service Commission. It's already been approved by the Federal Energy Regulatory Commission in November, the Virginia State Corporation Commission in October and PHI stockholders in September. The companies expect the merger to be completed in the second or third quarter of this year.

Source: Philadelphia Business Journal