Exelon, Constellation settle with Justice Department
Posted: 1:31 pm Wed, December 21, 2011
Daily Record Legal Affairs Writer
Exelon Corp.’s proposed $7.9 billion acquisition of Constellation Energy Group got another keystone approval Wednesday in the form of a settlement with the Department of Justice over competition concerns.
The companies agreed to sell three electricity generating plants in Maryland. Chicago-based Exelon and Baltimore-based Constellation had already agreed to sell three plants as part of a settlement with the PJM Interconnection, which coordinates the movement of wholesale electricity in 13 states and the District of Columbia.
Exelon spokeswoman Judith Rader confirmed the settlement. Exelon had already agreed to the terms, divestiture of their Maryland power plants, as part of its acquisition proposal, she said.
The department made the announcement Wednesday shortly after it filed a lawsuit in U.S. District Court in Washington, alleging the deal would eliminate competition and lead to higher prices for consumers. The agreement must be approved a federal judge.
“Competition in wholesale electricity markets is vital to the economic well-being of consumers and businesses,” said Sharis Pozen, acting assistant attorney general for the antitrust division, in an e-mailed statement. “These divestitures will preserve that critical competition for the benefit of electricity customers throughout the mid-Atlantic.”
The Maryland Public Service Commission has pushed back the date for its decision to Feb. 17. The extension came after Gov. Martin O’Malley, his administration and the companies came to an agreement that called for Exelon to make concessions valued at more than $1 billion, up from a previous offer of $515 million. Exelon, which will be the surviving entity after the merger, agreed to develop or to help develop as much as 270 megawatts of new power-plant capacity in Maryland, 54 percent more than a Dec. 5 offer.
A rate credit to all BGE ratepayers of $100 was included in the deal, but was not doubled as recommended by the staff of the PSC.
Bloomberg contributed to this article.