Exelon, Pepco File For Merger With Maryland Regulators

Flickr photo by Bill in DCExelon and Pepco Holdings say the proposed merger of the two giant power companies will bring about 7,000 new jobs, $600 million of economic benefits and much fewer power outages in Maryland.

Chicago-based Exelon and Pepco Holdings Inc. filed for approval of the merger on Tuesday with the Maryland Public Service Commission, one of a host of state and federal agencies that must approve the move.

Upon the announcement of the $6.8 billion sale of Pepco Holdings Inc. to Exelon in April, some local officials expressed optimism that Montgomery County would be able to get more stringent standards for power reliability from Pepco, the D.C.-based subsidiary of Pepco Holdings that has long been criticized for poor service.

While announcing its filing for approval in Maryland, Pepco and Exelon promised a long list of benefits to customers that would come about as a result of the merger.

One of those was titled “Enhanced Customer Service and Reliability Committment,” in which Exelon said the merger would mean cutting the frequency of power outages in Maryland by 38 percent and cutting the average outage duration by 43 percent by the 2018-2020 period.

In its approval filing, Exelon offered to be subject to financial penalties if Pepco or Delmarva Power don’t meet those goals.

If the merger is approved, Pepco will retain its headquarters in D.C. Exelon has also proposed giving $40 million to the Maryland PSC that “can be used as the PSC deems appropriate for customer benefits, such as bill credits, assistance for low-income customers and energy-efficiency measures.”

Exelon has also promised $50 million over 10 years for charitable donations in the communities that Pepco Holdings Inc. serves. The company’s 2013 charitable giving amount came in at $623,000.

The merger will eventually mean the elimination of some jobs, though Exelon said it’s committed to “no net involuntary merger-related job losses of Pepco and Delmarva Power utility employees for at least two years after the merger, and to honor all collective bargaining agreements.”

Pepco Holding Inc. shareholders will meet to approve the merger on Sept. 23. The companies anticipate completing the merger in the second or third quarter of 2015. No rate increases are scheduled as a result of the merger.

PDF: Exelon-prepared FAQ On Pepco Merger

Flickr photo by Bill in DC

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