FirstEnergy Corp. (FE) and Allegheny Energy, Inc. (AYE) filed an application with the Maryland Public Service Commission for approval of their proposed merger.
The application outlines the companies’ commitments to support jobs, customers, communities and retail competition in Maryland. If approved, the merger would:
Establish a regional headquarters of Potomac Edison (currently an Allegheny Energy subsidiary) as part of a larger FirstEnergy family of operating companies. Located within Potomac Edison’s Maryland service area, this local headquarters would provide customers with local management focused on their needs and with the authority to make decisions.
Create a financially stronger utility that provides reliable and quality service to its customers.
Support retail competition in Maryland through FirstEnergy’s competitive subsidiary, FirstEnergy Solutions, with a commitment to market to residential customers in the Potomac Edison service territory and other parts of the state.
Provide direct rate credits to Potomac Edison’s Maryland residential customers. In addition to the benefits customers would realize over time through merger synergies, Potomac Edison’s residential electric utility distribution customers would receive immediate rate benefits totaling $2.5 million over two years.
The merger is expected to close in the first half of 2011, subject to customary closing conditions, including shareholder and regulatory approvals, as outlined in the Registration Statement on Form S-4 that was filed with the Securities and Exchange Commission in March. The merger is expected to create a combined company with a more diversified energy delivery business and stronger generation portfolio, which would enhance customer service, reliability and operational flexibility.
The companies previously filed applications with the Federal Energy Regulatory Commission, the Pennsylvania Public Utility Commission and the Public Service Commission of West Virginia. They also plan to file for state regulatory approval in Virginia in the near future.