Dive Brief:
- New Jersey regulators have signed off on the merger of Exelon Corp. and Pepco Holdings, bringing the combination of six electric and gas utilities another step closer to completion.
- The approval hinged on a settlement between the two companies, staff of the Board of Public Utilities, and the Independent Energy Producers of New Jersey that included, among other provisions for $15 million in efficiency savings to Atlantic City Electric (ACE).
- The settlement also calls for a $62 million customer investment fund to be used for direct rate credits to ACE customers within 60 days of merger closing.
Dive Insight:
Exelon and Pepco are closing in on the approvals needed for their merger, and now just require approvals in Delaware, Maryland and the District of Columbia. Federal regulators have already approved the deal, along with state regulators in Virginia and now New Jersey.
The deal will combine Exelon’s three electric and gas utilities – BGE, ComEd and PECO – and Pepco's three – ACE, Delmarva Power and Pepco.
“We are excited that the commissioners have approved our merger,” said Chris Crane, Exelon president and CEO. “We are appreciative of the time and dedication of the BPU staff and other stakeholders who worked collaboratively with us throughout this process to deliver a robust package of benefits for New Jersey.”
The approval, which hinged on a settlement reached last month, calls for ccommitment to improve ACE’s reliability performance to levels that exceed current BPU requirements for frequency and duration of outages, and continued infrastructure investment. The utility also committed to hire 60 union employees and to protect compensation and benefits for current employees.
The deal also maintains ACE’s local operational headquarters in Mays Landing, N.J.
Approval by New Jersey officials, while necessary, was not the biggest stumbling block for the acquisition that would create the nation's largest utility. As Utility Dive has reported, the merger faces significant public opposition in D.C. and Maryland. A poll of District residents released earlier this week found 6% support the merger, while most are unsure. Exelon says the poll was flawed.
