Exelon Corp. and Pepco Holdings announced Monday the companies would accept the conditions imposed by Maryland regulators on their proposed merger.
The Maryland Public Service Commission approved the deal in a 3-2 vote Friday imposing 46 conditions including higher reliability standards and a $100 rate credit for Delmarva and Pepco residential customers, or twice what the companies originally offered. The PSC also ordered them to spend $43.2 million for energy-efficiency programs in Prince George's and Montgomery counties and in Delmarva's Maryland service area.
Exelon initially proposed a customer investment fund of $40 million for Maryland customers, then upped it to $94.4 million to sweeten the deal. Under the PSC order, the company would spend about $127 million on Maryland customers.
"After a thorough review of the order, we have concluded that it is constructive, but the conditions it imposes – including those to which the companies already committed in our settlement – will also be challenging," Exelon president and CEO Chris Crane said in a statement. "It poses some stringent conditions that will be difficult to fulfill, but all of us at Exelon accept the challenge and commit to proving ourselves in an expanded role in Maryland."
Maryland Attorney General Brian E. Frosh, who strongly opposed the merger on behalf of the Maryland Energy Administration, said he was "exploring all options" to protect the state's consumers after the decision.
Last April, Chicago-based Exelon proposed the $6.9 billion merger with Pepco Holdings, which owns three electric and gas utilities — Pepco, Atlantic City Electric and Delmarva Power. The merger needed approval by federal regulators, four states and the District of Columbia. After the approval by the Maryland PSC, the deal now hinges on decisions by regulators in Washington, D.C. and in Delaware, where the companies reached a settlement with stakeholders.