Caspian Energy Journal Caspian European Club
Thursday, 22 October 2015 16:30

Exelon-Pepco merger could create largest U.S. electric utility

The proposed merger of Exelon Corporation and Pepco Holdings Inc. would, if approved, create the largest electric utility holding company in the United States as measured by number of customers. The combined 8.5 million customers served by the new Exelon would surpass the number of customers served by the next-largest utility holding company, Duke Energy, which merged with Progress Energy in 2012, Caspian Energy News ( reports with reference to the press service of the U.S. Energy Information Administration (EIA).

Currently, Exelon services 6.7 million customers through three electric utility subsidiaries. Pepco Holdings currently serves 1.9 million customers. Exelon proposed purchasing Pepco Holdings for $6.8 billion in April 2014. Exelon cited cost reductions available through increased scale and the two companies “geographic proximity and similar utility business models as the primary reasons for the merger. Many U.S. investor-owned utilities (IOUs) have consolidated in recent years, often under the umbrella of a corporate holding company structure.

The proposed merger between Exelon and Pepco Holdings has been approved by the Federal Energy Regulatory Commission and the public utility commissions in Maryland, New Jersey, Delaware, and Virginia.

The Public Service Commission in the District of Columbia initially rejected the merger on August 25, 2015. However, the mayor of the District of Columbia reached a settlement agreement with the two companies in late September that alters the merger terms to address many of the objections cited by the commission. Commission approval is still required before the merger can be completed. In an October 16 filing with the commission, Exelon and Pepco submitted a revised schedule that would conclude all hearings, replies, and briefs by December 23, likely pushing the commission's decision into early 2016.

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