Chicago-based Exelon on Tuesday filed an application with the Maryland Public Service Commission for approval to acquire Pepco Holdings, the D.C.-based utility serving about 537,000 customers in Washington’s Maryland suburbs.
The all-cash deal, announced in April and valued at about $6.8 billion, will cement Exelon’s hold on the Mid-Atlantic power market by adding Atlantic City Electric, Delmarva Power and Pepco to the three utilities Exelon owns: BGE, ComEd and Peco.
The process, which follows similar filings in the District, New Jersey and Delaware, is expected to take between 12 and 15 months for approval in all jurisdictions.
“The filing we are making today describes in detail how our proposed merger will benefit Maryland’s economy and the customers served by Pepco and Delmarva Power,” Exelon President Chris Crane said in a statement. “The commitments we are making will deliver immediate economic benefits to customers and Maryland, and will ensure that Pepco and Delmarva Power continue their long history of investing in their communities.”
To help smooth the approval process, Exelon has committed $50 million in charitable contributions over the next decade to communities served by Pepco.
The application also cited an economic impact statement estimating that the acquisition will create between 6,300 and 7,000 jobs in the region. Most of those jobs, according to the proposal, are estimated to be ancillary ones created by businesses impacted by the acquisition.
Exelon also said it will provide $40 million for a “Customer Investment Fund,” which the Maryland PSC may use for customer benefits such as bill credits, low-income assistance and energy efficiency.
Exelon, which owns 23 nuclear power plants, is acquiring a gas and electric transmission company that is one-fifth its size. Pepco, having sold its power plants several years ago, buys its electricity from others. But Pepco, which traces its history to a streetcar company from the late 19th century, has more than 2 million customers in an arc stretching from Washington and its Maryland suburbs, east to the Delaware shore and north to New Jersey.
The agreement comes three years after Exelon bought Baltimore-based Constellation Energy Group, parent of Baltimore Gas and Electric, for $7.9 billion in a deal that extended Exelon’s reach into 38 states and two Canadian provinces.
Capital Business is The Post’s weekly publication focusing on the region’s business community. For more Washington business news, go to www.capbiz.biz.
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