Two utility companies that serve a large segment of Maryland – Pepco and Baltimore Gas and Electric – would merge in a deal announced Wednesday.
Pepco Holdings Inc. has agreed to be acquired by Chicago-based Exelon Corp., the owner of Baltimore Gas and Electric Co., in an all-cash deal valued at $6.8 billion, reports the Baltimore Business Journal.
The deal requires regulator and stockholder approval to create a utility with about 10 million customers. The purchase would boost Exelon's position in the mid-Atlantic, uniting its two area utilities – Baltimore-based BG&E and Philadelphia-based PECO – with Pepco Holdings’ electric and gas utilities – Atlantic City Electric, Delmarva Power and Pepco – to create the leading mid-Atlantic electric and gas utility, the Journal reports.
Exelon closed its deal to acquire Baltimore's Constellation Energy Group in 2012 for $7.9 billion. Constellation and BGE are now subsidiaries of Exelon.
Under terms of the deal, Exelon will pay $27.25 per share for all outstanding stock in Washington, D.C.-based Pepco Holdings.
In 2011, elected officials and consumer advocates criticized Pepco, saying the company’s average customer in Maryland and DC suffers annual outages of more than 300 minutes, well over the national average.
A year later, Maryland representative from Montgomery and Prince George's county urged state regulators to take severe action against Pepco and Baltimore Gas and Electric following the June 29 storm and its elongated, widespread power outages.
Pepco asked the Maryland Public Service Commission in December 2013 for approval of a rate increase request of more than $43 million. In the most recent rate cases, the commission has found that Pepco had sought recovery of expenditures that were not proper and reduced their requests by more than 50 percent.