Exelon, Constellation strengthen merger commitments

Source: Exelon Corporation

Exelon Corporation (NYSE: EXC) and Constellation Energy Group (NYSE:CEG) have filed a brief with the Maryland Public Service Commission (PSC) that increases the companies’ commitments related to the proposed merger, which is currently under review by the PSC, and offers an enhanced package of benefits, totaling a more than $445 million investment in Maryland, projected to create more than 2,400 jobs in the state. 

“We listened carefully to questions posed by the Commissioners and input from interested parties, and we responded by enhancing the already robust package of benefits that the merger will provide to Maryland,” said Exelon President and COO Christopher M. Crane. “We think we have brought forth a good package that will benefit BGE customers, result in a stronger, better-protected BGE, and provide an infusion of thousands of jobs and hundreds of millions of dollars into the Maryland economy.” 

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In today’s filing, Exelon and Constellation committed to: 

• Build 175 megawatts (MW) of new generation in Maryland, including 55 MW of wind or solar capacity, which would increase the state’s total renewable capacity by more than 30 percent. The new generation projects will be built within the state, for a total projected investment of between $220-280 million. 

• Construct—not renovate—a brand-new Constellation headquarters building in Baltimore, adding more than 1,100 jobs into Maryland’s economy through direct, indirect and induced effects, for a total projected investment of $95-120 million. 

• Allowing BGE to retain its capital in lieu of paying dividends to Exelon through 2014 to ensure BGE can continue to support its significant level of investment in key customer and reliability-related initiatives. 

• Ensuring a majority of BGE’s board of directors reside or have a principal place of business in Maryland. 

• Enhancing ring-fencing by adding to what is already the gold standard in the industry as well as increased corporate governance measures. 

The investment of more than $445 million in Maryland as a result of the merger also consists of the previously announced $112 million from a $100 one-time rate credit for BGE residential customers; $15 million for the Maryland PSC to use directly for the benefit of BGE customers; and $4 million to support the EmPower Maryland Energy Efficiency Act. 

In addition, the companies have committed to maintain charitable giving at an average level of $7 million per year for at least 10 years, for a total of $70 million. 

In addition to the companies’ merger filing with the PSC, Exelon and Constellation made other regulatory filings in support of their proposed merger. On Aug. 3, the Public Utility Commission of Texas approved the merger. Other regulatory approvals required include the Federal Energy Regulatory Commission, the Nuclear Regulatory Commission, the New York State Public Service Commission and the Department of Justice. Shareholders of both companies overwhelmingly approved the transaction on Nov. 17. Pending all required approvals, Exelon and Constellation expect to complete their merger in early 2012.

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