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BG&E Plans to Buy Pepco, Consolidate MD Utility Holdings

Two utility companies that serve a large segment of Maryland – Pepco and Baltimore Gas and Electric – would merge in a deal announced Wednesday.

Two utility companies that serve a large segment of Maryland – Pepco and Baltimore Gas and Electric – would merge in a deal announced Wednesday. File|Patch
Two utility companies that serve a large segment of Maryland – Pepco and Baltimore Gas and Electric – would merge in a deal announced Wednesday. File|Patch

Two utility companies that serve a large segment of Maryland – Pepco and Baltimore Gas and Electric – would merge in a deal announced Wednesday.

Pepco Holdings Inc. has agreed to be acquired by Chicago-based Exelon Corp., the owner of Baltimore Gas and Electric Co., in an all-cash deal valued at $6.8 billion, reports the Baltimore Business Journal.

The deal requires regulator and stockholder approval to create a utility with about 10 million customers. The purchase would boost Exelon's position in the mid-Atlantic, uniting its two area utilities – Baltimore-based BG&E and Philadelphia-based PECO – with Pepco Holdings’ electric and gas utilities – Atlantic City Electric, Delmarva Power and Pepco – to create the leading mid-Atlantic electric and gas utility, the Journal reports.

Exelon closed its deal to acquire Baltimore's Constellation Energy Group in 2012 for $7.9 billion. Constellation and BGE are now subsidiaries of Exelon. 

Under terms of the deal, Exelon will pay $27.25 per share for all outstanding stock in Washington, D.C.-based Pepco Holdings.

In 2011, elected officials and consumer advocates criticized Pepco, saying the company’s average customer in Maryland and DC suffers annual outages of more than 300 minutes, well over the national average.

A year later, Maryland representative from Montgomery and Prince George's county urged state regulators to take severe action against Pepco and Baltimore Gas and Electric following the June 29 storm and its elongated, widespread power outages.

Pepco asked the Maryland Public Service Commission in December 2013 for approval of a rate increase request of more than $43 million. In the most recent rate cases, the commission has found that Pepco had sought recovery of expenditures that were not proper and reduced their requests by more than 50 percent.

If granted, the request would increase the "average residential bill for its half-million customers in Montgomery and Prince George’s counties by $4.80 a month," The Washington Post reported.

Robert G. May 01, 2014 at 08:31 AM
Need to get the title straight. BG&E is not buying Pepco. The owner of BG&E, Exelon, is buying Pepco.
George Helm May 01, 2014 at 09:50 AM
I'm sure that will be good for competition but then again we do have the PSC which makes competition unnecessary!
PH May 01, 2014 at 08:42 PM
The PSC is worthless. Now BGE will be a TRUE monopoly. As always, we the consumers are screwed. Check out BGE's opt out fees for smart meters.
Matt Bechta May 02, 2014 at 05:35 AM
Not true. You are free to buy your power from any supplier at very competitive prices. You do not need to buy from a regulated utility such as BGE or PEPCO.
Point May 02, 2014 at 11:31 AM
Matt B is right. BGE is only the transmitter of the power or gas if your supplier(s) are other companies in Maryland. However, as a side comment, I would add that it is very hard to do or rather, it is very hard to research the other options. The state of Maryland makes it very hard to comparison shop electric or gas. Also, the difference between similar options (contract or no contract, source of power, etc.) is not as great. I had all wind for many years and paid about $17 more a year for it. (But for a few years, it was lower than BGE rate.) With the crazy prices this winter, my renewable electric company went under (it was small, local, and still pretty new - they did not have the flexibility on the open market yet). I was switched back to BGE (mostly coal and nukes). I tried to find another wind supplier but, it was confusing. I also learned that, ultimately, it might be just the same to buy carbon credits which is essentially what my old company did (swapping wind for coal and nuke to me - benefiting BGE or, whoever). Choosing a gas supplier is even more impossible to do. There is no way to find a supplier who does not do fracking either. There needs to be easier ways (an app!) for consumers of all types to research and compare electric and gas supplier options for states that have an open market. Price per unit, contract type, sustainability, how energy is generated are minimal things a consumer needs to compare when choosing energy suppliers.

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