Exelon threatens to walk from Pepco deal if DC doesn't move quickly

Dive Brief:

Exelon Corp. is threatening to walk away from its proposed $6.8 billion merger with Pepco Holdings if regulators in the District of Columbia do not approve the deal within five months.
Crain's Chicago Business reports that Exelon CEO Chris Crane believes the company's employees and shareholders have waited long enough, and said two years was the company's threshold for uncertainty on the deal.
The timing for a decision could become more apparent tomorrow, when the D.C. Public Service Commission sets the hearing schedule on Exelon's revised offer.

Dive Insight:

It's been a long road for the proposed Exelon-Pepco merger. The two companies have approvals from Maryland, New Jersey, Virginia and Delaware, and recently struck a deal with District of Columbia Mayor Muriel Bowser to push the acquisition through. But despite the work and progress, Exelon leadership has indicated it could still walk away from the deal if it is not completed in the next five months.

“We’ve been at this a long time,” Exelon CEO Crane said in an interview last week at Bloomberg's New York offices. “At that point, it will be almost two years. If we can’t get it done in that time, it’s unfair to the shareholders and the employees of the companies.”

The District of Columbia rejected the deal in August, but the company and city officials have since worked to reach an agreement. That deal includes a commitment to purchase more wind and solar power, a one-time credit to District ratepayers and a $25 million fund to offset future residential rate increases.

The D.C. Public Service Commission is expected to set the hearing schedule on the revised proposal tomorrow, Crain's Chicago Business reports. CEO Crane acknowledged "we should have put on a better case,” but said the company is confident the revised proposal will get the commission's approval.

The delay is reportedly costing Exelon $10 million each month in interest, on bonds issued to finance the deal.

Opponents of the deal are also stepping up their efforts to defeat the merger on appeal. Over the weekend, two neighborhood elected officials penned an op-ed in the Washington Post, arguing that the settlement deal is still not reason enough to support the merger.

Correction: An earlier version of this post identified the authors of the op-ed as local D.C. lawmakers. It is more accurate to refer to them as neighborhood elected officials.