CHICAGO and WASHINGTON, D.C. - Exelon Corporation (NYSE: EXC) and Pepco Holdings Inc. (NYSE: POM) today announced that they have reached a settlement in the proceeding before the New Jersey Board of Public Utilities (BPU) to review the two companies' proposed merger, which was announced on April 30, 2014. The settlement, which is subject to the approval of the Commissioners of the BPU, was signed and filed by Exelon and Pepco Holdings, Atlantic City Electric (ACE), BPU staff and the Independent Energy Producers of New Jersey.
The merger will bring together Exelon's three electric and gas utilities - BGE, ComEd and PECO - and Pepco Holdings' three electric and gas utilities - ACE, Delmarva Power and Pepco - to create the leading mid-Atlantic electric and gas utility.
"We are pleased to have reached a settlement in New Jersey for our merger," said Chris Crane, Exelon president and CEO. "Our combined company will bring significant value to New Jersey and to ACE customers."
"This agreement is good for New Jersey," said Joseph M. Rigby, PHI chairman, president and CEO. "By joining the Exelon family of utilities, ACE will be able to deliver substantial benefits to its customers and communities."
The settlement includes many provisions that will ensure the merger benefits ACE customers and New Jersey, such as:
• A $62 million Customer Investment Fund to be used for direct rate credits to ACE customers within 60 days of merger closing;
• A program to provide $15 million in energy-efficiency savings to ACE customers over five years;
• Commitments to improve ACE's reliability performance to levels that exceed current BPU requirements for frequency and duration of outages, and to continued infrastructure investment;
• Commitments to hire 60 union employees and to protect compensation and benefits;
• Maintaining ACE's local operational headquarters in Mays Landing, N.J.;
• Providing an annual average of charitable contributions and local community support that is equal to ACE's 2013 level of at least $709,000 for 10 years after merger closing.
In addition to the New Jersey BPU, the merger requires approvals by the Delaware Public Service Commission, Public Service Commission of the District of Columbia and Maryland Public Service Commission. Following the expiration of the U.S. Department of Justice's review period on Dec. 22, 2014, the Hart-Scott-Rodino Act no longer precludes completion of the merger. Exelon and PHI will continue to work cooperatively with the DOJ until it advises them that it has concluded its evaluation of the merger.
The transaction was approved by the Federal Energy Regulatory Commission in November, the Virginia State Corporation Commission in October and PHI stockholders in September. The companies expect to complete the merger in the second or third quarter of 2015. For more information about the merger or to download the settlement agreement, visit www.phitomorrow.com.