POM Pepco Holdings,

Exelon Corp. and Pepco Holdings Inc. proposed alternatives to District of Columbia utilities regulators that restores some planned benefits for residential customers as the power companies try to complete their contested $6.8 billion deal.

Exelon previously received approvals from other regulators in the area served by Pepco, leaving D.C. as the final hurdle.

In a news release on Monday, Exelon and Pepco said one option includes an effort to balance the alternate terms offered last month by the Public Service Commission of the District of Columbia with the objections raised by some settling parties regarding rate credits for residential customers.

The companies said their alternative proposal includes $25.6 million to offset any rate increases after the deal closes for residential customers, including low-income households, through March 2019. An additional $20 million would be available for use at the D.C. Public Service Commission's discretion to benefit residential and commercial customers, to provide additional low-income customer assistance or for grid modernization.

"We're prepared to deliver the benefits of our original merger settlement or to accept all of the terms the commission concluded would place the merger in the public interest," Exelon Chief Executive Chris Crane said in prepared remarks.

Exelon and Pepco asked the commission for a decision by April 7. The two companies announced the deal in April 2014.

Shares of Exelon rose 1.6% to $33.90 in afternoon trading in New York, and Pepco gained 1.3% to $24.74.

Utility regulators for the District of Columbia voted 2-1 late last month to reject a proposed settlement 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 returned with an amended version of the settlement it said would be acceptable, and gave the parties until March 11 to accept or reject its conditions.

Last week, the Office of the People's Counsel for the District of Columbia, a group representing ratepayers, rejected the Public Service Commission's revisions to the Pepco-Exelon settlement agreement. The group said the commission's revisions eliminated a principal benefit of the merger for consumers by removing the guarantee of no rate increases through March 2019.

Those who must 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.

Other areas that already have approved the deal include Delaware, Maryland, New Jersey and Virginia.

Write to Tess Stynes at tess.stynes@wsj.com

(END) Dow Jones Newswires

March 07, 2016 14:35 ET (19:35 GMT)

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