Shares of electric power companies Exelon Corp. (NYSE: EXC) and Pepco Holdings Inc. (NYSE: POM) were halted shortly before 1:00 p.m. ET on Monday. Trading resumed at 1:40 p.m. following an announcement from the two companies related to their proposed $6.8 billion merger.
The Federal Energy Regulatory Commission (FERC), and regulators in Delaware, Maryland, New Jersey and Virginia had already given the deal a green light in October, but the District of Columbia at first rejected the deal, although the District’s Public Service Commission presented a counter-proposal on February 26. That deal was rejected last week by the city’s mayor and the Office of the People’s Counsel.
Monday’s latest proposal from Exelon and Pepco offers three alternatives. Exelon CEO Chris Crane said:
We’re prepared to deliver the benefits of our original merger settlement or to accept all of the terms the Commission concluded would place the merger in the public interest. We have also offered a third option that aims to balance the alternate terms the Commission offered in its Feb. 26 order with the views of some of the settling parties on the issue of rate credits to residential customers.
The alternative proposal addresses the District’s concerns by reallocating a portion of the total customer benefits for a $45.6 million fund – $25.6 million would preserve the original merger settlement’s rate credits for residential customers, including low-income households, to offset rate increases through March 2019, and $20 million would be used at the Commission’s discretion.
The two companies have requested that the city’s Public Service Commission reach a decision on the new proposal by April 7.
Shares of Exelon traded up about 1.7% before the trading halt and traded up about 1.5% at $33.85 once trading resumed. The stock’s 52-week range is $25.09 to $34.98.
Pepco’s shares also traded up about 2.3%% at $24.95 once trading resumed, in a 52-week range of $21.61 to $27.34.
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