Exelon Inches Closer to Completing Acquisition of Pepco
26 Febrero 2016 - 2:50PM
Noticias Dow Jones
Exelon Corp. moved closer Friday to completing a contested $6.8
billion acquisition of Pepco Holdings Inc. that would create one of
the largest electric utility holding companies in the U.S. But it
is still far from a done deal.
Utility regulators for the District of Columbia voted 2-1 on
Friday to reject a proposed settlement agreement offered by Exelon
and others as an alternative to the commission's outright rejection
of the transaction in August 2015.
But in another 2-1 vote, the commission then came back with an
amended version of the settlement agreement it said would be
acceptable, and gave the parties until March 11 to accept or reject
its conditions.
Share prices for Exelon and Pepco briefly dropped Friday morning
amid reports the deal was rejected before bouncing back in
afternoon trading.
Those who must now sign off on the amended settlement include
groups representing utility ratepayers, the D.C. government and
business interests including an association representing apartment
and office building owners.
Exelon previously garnered approvals from other regulators in
the area served by Pepco, including Delaware, Maryland, New Jersey
and Virginia, making D.C. the final hurdle.
Charlie Harak of the National Consumer Law Center, which
represents low-income ratepayers in the matter, said that "based on
a quick and limited review of the 270-page order, my instincts say
this is not a deal breaker for Exelon—but they will have to
say."
Exelon spokesman Paul Elsberg said that "once we have had a
chance to study the order and confer with the settling parties, we
will have more to say about what it means and our next steps."
Paul Patterson, a utilities analyst for Glenrock Associates in
New York, said that "it's more likely than not" that Exelon will go
along with the new terms.
The amended settlement agreement includes changes that appeared
designed to maintain a utility focus on energy efficiency and grid
modernization, two goals of the D.C. commission.
It also proposes to give the commission more control over
dollars contributed by Exelon to seal the deal, for example,
requiring escrow-account treatment for millions of dollars set
aside for the benefit of Pepco ratepayers, to prevent funds from
being raided by city officials.
When Pepco and Exelon first announced their merger agreement in
April 2014, Exelon faced criticism it was paying too much for
Pepco.
Chief Executive Chris Crane said it was an important transaction
because it would increase Exelon's rate-paying customers by two
million to a total of 10 million and substantially increase the
proportion of Exelon's earnings coming from stable, regulated
enterprises in D.C. and five states.
Exelon owns a large number of unregulated power plants—including
the nation's biggest fleet of nuclear reactors—and has been
battered by low power prices in deregulated energy markets.
The utility's record on acquisitions has been mixed. It failed
in efforts to acquire PSE&G of New Jersey, amid state
opposition, in 2005. But it succeeded in its 2011 acquisition of
Constellation Energy of Baltimore, adding Baltimore Gas and
Electric to its other utilities, Commonwealth Edison in Chicago and
PECO in Philadelphia.
If the Pepco deal closes, Exelon will add three utilities to its
stable: Atlantic City Light, Delmarva Power and Pepco or Potomac
Electric Power.
Write to Rebecca Smith at rebecca.smith@wsj.com
(END) Dow Jones Newswires
February 26, 2016 15:35 ET (20:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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