Dive Brief:
- Exelon and Pepco Holdings have reached a settlement in Delaware that is expected to allow their proposed merger to move ahead.
- The settlement, which was reached with regulatory staff and consumer advocates in the state, still needs the official approval of the Delaware Public Service Commission.
- The agreement calls for millions of dollars in bill credits for customers of Delmarva Power and tighter standards for responding to power outages.
Dive Insight:
Though the deal still faces opposition in the District of Columbia and will need approval in Maryland, Exelon and Pepco say they have reached an agreement that should allow their merger to pass muster in Delaware.
“We are pleased to have reached this settlement agreement for our merger,” said Chris Crane, Exelon president and CEO. “Our combined company will bring significant value to Delaware and to Delmarva customers.”
The settlement agreement includes more than $51 million in direct benefits, including more than $49 million over 10 years in direct monthly rate credits for Delmarva electric and gas customers. In addition to the direct monthly rate credits, the companies said customers also will benefit from another $61.5 million in projected merger savings that will be reflected in rates during the next 10 years and beyond. The also deal calls for $2 million in funding by Exelon for energy efficiency programs for low income customers and specific provisions to improve implementation of Delaware’s energy efficiency efforts.
As part of the deal, the companies agreed to commit to a new minimum standard of reliability for customers by reducing the average duration of outages to 175 minutes or shorter by 2020, while at the same time substantially reducing capital spending. The current minimum standard for the average duration of an outage is 295 minutes.
The deal includes agreements with PSC staff, the Delaware Public Advocate, the Department of Natural Resources and Environmental Control, the Delaware Sustainable Energy Utility, the Mid-Atlantic Renewable Energy Coalition, and the Clean Air Council.
