Chicago-based Exelon Corporation on Tuesday formally filed an application with the Maryland Public Service Commission for approval to acquire Pepco Holdings, the District-based utility serving around 537,000 customers in Washington’s Maryland suburbs.
The all-cash deal announced in April, valued at around $6.8 billion, will cement Chicago-based Exelon’s hold on the Mid-Atlantic power market by adding Atlantic City Electric, Delmarva Power and Pepco to the three utilities Exelon already owns: Baltimore Gas and Electric, Commonwealth Edison and Peco Energy.
The process, which follows similar filings in the District, New Jersey and Delaware, is expected to take 12 to 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 add 6,300 to 7,000 new jobs in the region. Most of those jobs, according to the proposal, will not be direct hires by Exelon but are estimated to be ancillary jobs by businesses affected 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 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, no longer generates its own electricity and instead buys it from others. But the utility, 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.