Chicago-based Exelon Corporation along with District of Columbia-based utility service provider, Pepco Holdings, Inc. are currently under going a process to merge. But, what does the $6.5 billion merger mean to customers?
According to Dave Velazquez, executive vice president and leader of the power delivery business at Pepco, absolutely nothing accept better reliability and a larger investment in the community.
“Nothing changes, but it gets better,” Velazquez told the AFRO during a meeting with AFRO Publisher John J. Oliver, Jr., President Benjamin Phillips and other paper executives. Also in attendance was Myra Oppel, regional communications vice president at Pepco Holdings, Melissa Sherrod, vice president of corporate affairs at Exelon and Valencia McClure, director of communications and corporate relations at BG&E, an Exelon subsidiary in central Maryland.
After the merger, Velazquez will become president and CEO of the Pepco Holdings’ utilities. Donna Cooper will also remain with Pepco as regional president.
A fact sheet on the merger said there would be no net involuntary merger-related job losses at Pepco and Delmarva Power for at least two years after the merger and Maryland’s economy would gain as many as 7,000 new jobs and up to $623 million in benefits.
Velazquez said the only thing changing is ownership with the merger, which is more of a cash transaction where Exelon is buying all of Pepco’s stock. “Bills will still have Pepco on them,” he said, noting that Exelon logo would be added at the bottom.
The combination of the companies will bring Exelon’s three top-performing electric and gas utilities together, including Baltimore Gas and Electric (BG&E) Company, Chicago-based Commonwealth Edison Company and Philadelphia-based PECO along with Pepco Holding’s electric and gas utilities – Atlantic City Electric, Delmarva Power and Pepco.
In order to complete the merger, the companies need approval from six regulatory agencies, including the Federal Energy Regulatory Commission, the Delaware Public Service Commission, the Public Service Commission of the District of Columbia, the New Jersey Board of Public Utilities, the Maryland Public Service Commission and the Virginia State Corporation Commission. Files for approval were submitted in August. The Virginia commission approved the merger in October. The full merger process is expected to take at least 12 months to complete, the executives said.
If all agencies approve the merger, Exelon will then become the largest utility in the mid-Atlantic, serving approximately 10 million customers, according to the Washington Business Journal. Exelon’s website said that it expects to complete the process in the second or third quarter of 2015.
The merger would also introduce a new tool to Pepco Holdings’ community outreach with a Customer Investment Fund. According to a benefit fact sheet, Exelon would provide an aggregate amount of $43 million for a Customer Investment Fund in Pepco Holdings’ service territory. Of that amount, $14 million would be available for the Customer Investment Fund in D.C., which would be based on the number of customers in the District. According to Exelon’s website, the fund would help support low-income customers and provide funding for bill credits, and energy efficiency measures.
Exelon executives conveyed that the company shares Pepco Holdings’ commitment to the local communities it serves. The company is committed to exceeding Pepco’s 2013 $1.6 million in charitable contributions and local community support. “It is part of our responsibility to make sure these communities are healthy,” Sherrod said.
According to Exelon’s fact sheet, the company is willing to face financial penalties if Pepco and Delmarva Power do not meet their planned reduction targets.