US Utilities Exelon, Pepco Settle with Maryland Counties in Merger Review.
17 March 2015 - US-based utility operators Exelon Corp. (NYSE: EXC) and Pepco Holdings Inc. (NYSE: POM) have reached a settlement agreement with Montgomery and Prince George's counties in the proceeding before the Maryland Public Service Commission to review the companies' proposed merger, the companies said on Tuesday.
Under the merger, which was announced on 30 April 2014, Exelon will acquire Pepco for around USD 6.8bn in cash.
The two counties represent all of Pepco's Maryland customers and nearly three-fourths of Pepco Holdings total customers in Maryland.
According to the companies, the settlement, which is subject to the approval of the Commissioners of the PSC, was filed by Exelon and Pepco Holdings and signed by Montgomery County, Prince George's County, the National Consumer Law Center, National Housing Trust, Maryland Affordable Housing Coalition, the Housing Association of Nonprofit Developers and a consortium of nine recreational trail advocacy organizations led by the Mid-Atlantic Off-Road Enthusiasts.
The settlement includes commitments aimed at providing benefits to customers and the state through a combination of bill credits, funding for energy-efficiency programs and renewables investments, low-income customer assistance and other provisions, including:
A commitment to designate a portion of a proposed USD 94.4m customer investment fund to provide USD 36.8m in bill credits, or approximately USD 50 per Pepco and Delmarva Power customer in Maryland. The remainder -- USD 57.6m -- will go toward funding energy-efficiency programs designated by Montgomery County, Prince George's County and the PSC.
They would create a USD 50m "Green Sustainability Fund" to stimulate investment in solar, energy storage and other distributed generation throughout the PHI service territory.
The settlement also includes a commitment to accelerate Pepco and Delmarva Power's reliability improvements so that by 2018, develop 15mw of solar generation, and file a proposal with the PSC for public-purpose microgrid projects in Pepco service territory, including one project each in Prince George's County and Montgomery County.
There would also be a commitment for Pepco and Delmarva Power to request that the PSC initiate a "grid-of-the-future" proceeding to examine opportunities to transform the electric grid through smart grid technology, microgrids, renewable resources and distributed generation.
Exelon will provide up to USD 500,000 for the PSC to retain a consultant to study relevant issues and facilitate the proceeding.
The merger will bring together Exelon's three electric and gas utilities BGE, ComEd and PECO and Pepco Holdings' three electric and gas utilities ACE, Delmarva Power and Pepco to create the leading mid-Atlantic electric and gas utility.
Target: Pepco Holdings Inc
Buyer: Exelon Corp
Deal size in USD: 6.8bn
Type: Corporate Acquisition
Buyer advisor: , ,
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|Publication:||M & A Navigator|
|Date:||Mar 17, 2015|
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