Exelon, Constellation Complete Merger After FERC Approval

Exelon Corporation and Constellation Energy have completed their merger, effective today, in the wake of FERC's approval of the transaction on Friday.

The merged company is now one of the nation's largest competitive energy products and services suppliers by load (about 164 terawatt-hours per year) and customers (approximately 100,000 business and public sector and approximately 1 million residential). Exelon also owns approximately 35,000 megawatts of power generation, including more than 19,000 megawatts of nuclear power.

FERC approved the merger without any additional conditions other than those previously agreed to by the companies.

Among the mitigation measures, as previously reported, are the divestiture of 2,648 MW of generation (Brandon Shores, CP Crane, and HA Wagner) and Exelon's commitment to sell 500 MW of energy in the 5004/5005 submarket within PJM. As part of an agreement with the market monitor, Exelon will not sell the three divested plants to any of the following companies or any of their direct or indirect subsidiaries: American Electric Power Company; FirstEnergy Corp.; GenOn Energy, Inc.; Edison International; Dominion Resources, Inc.; Public Service Enterprise Group Incorporated; Calpine Corp.; and PPL Corporation.

Additionally, while the divestitures and the sales of energy are pending, Exelon agreed to bid energy, capacity, and ancillary service at cost-based rates. Applicants also commit to cost-based bidding restrictions in the EMAAC LDA capacity submarket.

In reviewing the merger, FERC examined the entire PJM market, as well as the AP South, 5004/5005, and PJM East submarkets as relevant geographic markets. "While AP South and 5004/5005 have not been previously recognized by the Commission as relevant geographic submarkets, the frequency of binding constraints on the relevant interfaces that create price separation within PJM lead us to conclude that those markets should be considered separate relevant submarkets within PJM for purposes of evaluating the Proposed Transaction," FERC said.

FERC did not consider Northern Illinois a separate relevant submarket. "There is no evidence in the record that there are frequently binding transmission constraints that create prices in Northern Illinois that diverge from prices in the rest of PJM," FERC said.