By Tess Stynes
Exelon Corp. and Pepco Holdings Inc. agreed to more than double
the value of a fund to benefit customers in Maryland as the
Chicago-based power company seeks approval from the state
regulators for its planned $6.8 billion acquisition of Pepco.
Under the plan, Exelon raised the level of a Maryland customer
investment fund to $94.4 million from $40 million, which state
regulators could earmark for benefits such as rate credits, energy
efficiency or low-income customer assistance.
The plan also includes an increased commitment to reduce the
length and frequency of power outages in the state, as well as a
provision for noncompliance payments if the combined company misses
a reliability performance target in any of the years 2018 to 2020,
that could escalate to as much as $7.75 million.
Exelon made a commitment to achieve the performance improvements
within existing annual reliability-related budgets and would be
subject to penalties for exceeding capital-spending budget
levels.
The planned acquisition would boost Exelon's base by two million
accounts to 10 million in five states and Washington, D.C., as
electric utilities generally are attempting to adjust to lethargic
sales.
Exelon owns a large fleet of independent power plants and big
utilities that serve the Chicago, Philadelphia and Baltimore areas.
The Pepco acquisition would add utilities serving customers in
Maryland, Delaware, New Jersey and Washington, D.C., but no power
plants.
In addition to approval from Maryland regulators, the planned
acquisition requires approvals in the District of Columbia and
Delaware. The companies expect to complete the deal during the
third quarter.
Write to Tess Stynes at tess.stynes@wsj.com
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